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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From Xero to mining investing - a leap of faith?

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In 2010, I recommended a stock listed on the NZ Stock Exchange called Xero Ltd (NZE:XRO). The NZX is a very small market so I'm not inclined to trade it. I do however like to assist people to trade markets. I wish I could say that I have a wide following of people for these recommendations, but sadly I think that's unlikely. There are two reasons:
1. Its a small market
2. People are cynical about anyone making claims
3. People are cynical about any 'conflict of interest', whether actual or implied.

For the record - I do have a conflict of interest. I am asking for a payment of $70 for a book on 'Global Mining Investing', which was in its first edition about 460 pages long. Its an eBook I am currently updating. Normally, I don't trade stocks like Xero, however it was a 'stand-out' buy at the time, and whilst I was not willing to set up an account, I obviously stand by the recommendation. I would however note that, the stock is now a technical sell. Being still a growth company, it probably has more upside, but I would argue that it also has a lot of downside in the short term. We originally recommended the stock around $1.60 (see Google Finance in 2010), and its now $28.61, at this date.

It is going to be rare that any person investing in a company like Xero will get a chance. Any IT company like Xero in future seeking to raise money will be compared to Xero, so professional insiders will get the opportunity, so they will not be listed until those 'insiders' want to take their profits from an illiquid market. Expect the founder of Xero to be backing these new market entrant companies. Investors like to go to executive billionaires like him because they want the 'investor profile' that these people bring. Its a sad reality of the capitalist system. Success sells to success and the little guy becomes cynical and marginalised. This not need be the case. The mining industry is a great industry for making money, and they need the money. There are plenty of small companies, and metal prices are volatile. We don't just tell you which stocks to buy, we help you identify them. We can hold your hand through your investment journey on Facebook and my personal page (because I love what I do - as a mining analyst), and we'll even appraise the companies readers like so that ever 'learned' investor improves their skills. Learning how to make money builds commercial acumen, and that means NZ has more business-savvy people to advance this country.

Global Mining Investing - table of contents

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Debate between Wanganui councillors - James Penn and Michael Laws

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Last night the people of Wanganui were treated to some rare entertainment – a match between ‘David and Goliath’. Ok, better still, David’s son and Goliath. Interestingly, recently Malcolm Gladwell has given new meaning to the tale of ‘David and Goliath’, and this tale is analogous in some respects. The combatants are candidates in the running for Wanganui District Council. James Penn, is a local 19yo graduate of Wanganui High School, and a NZ Debating Champion, who is a 1st year university student in Auckland, studying law and commerce. Michael Laws is a sitting councillor of Wanganui, a former mayor of the city, and a former National Party MP.
It was a match between ‘the old guard’ and ‘a young buck’. There were several interesting issues about this contest:
1. The disparity in values – It struck me as a contest between an old conservative and a young libertarian; though based on Penn’s policy, arguably a conservative with a preference for smaller government  (utilitarianist). Penn looked professional throughout the debate; his open-mindedness plausibly a redeeming appendage to his youthful ignorance.
2. The disparity in debating styles – Penn is strictly correct whilst Laws is intimidating and plays dirty, at times losing credibility and respect with the audience. His attacks were often straw arguments or red herrings, and on one occasion he conflated his discredited argument with Penn's rebuttal. So much for intellectual honesty. He'd on occasion had to temper his outrageousness.
3. The value proposition offered by both candidates – Old people are important because of their historical knowledge; but youth brings new ideas and methods. There is a role for both.

James Penn is a star pupil, so despite his tender years, you’d expect some ‘fight, both in terms of factual content and ‘worldly experience’. James is not without worldly experience. He comes from an upwardly mobile family, has travelled extensively, and lived abroad (UK). More poignant is the following. Ignorance or the lack of experience (as you’d expect in an 19yo) is not necessarily a bad thing. Earlier in the week I was talking to a sitting councilor Rangi Wills. A knowledgeable man whom we could all learn a lot from. You want that type of knowledge on council. The problem I have, conveyed by both Rangi Wills and Michael Laws, is their ‘presumption of knowledge’, whereas a ‘young buck’ like James is less likely to presume facts and arguments. Particularly a star pupil like James, who is less likely to defer to other people’s views. He is more likely to go off and research topics. You can make much of his need to focus on studies, particularly since law is an area of study that requires a great deal of reading. Unless he can make case studies of Wanganui, I wonder if he will be able to serve Wanganui effectively, particularly given the 'role' I see him filling. He will need reading in order to develop 'arguments' against the old guard. One of the reasons why star pupils are stars is because most people don’t develop aptitude in critical thinking. In many schools, its only taught to the best students, if at all. James would have developed these skills as a debater in school. It was evident last night against a formidable and intimidating opponent.
In the case of Rangi Wills early in the week, my topic was ‘waterworks’. I’d read in the Wanganui Chronicle that there was a requirement to spend $40 million-odd on flood mitigation to protect housing/urban areas in Wanganui East. I emailed my solution to Rangi over a year ago. I never got a reply. He said he gets 90 emails a day. I can’t believe its rate payers, so he must have an active social life, or perhaps he is a busy career man. In any respect, he wasn’t addressing my concerns. In our conversation, he played down my suggestion, arguing that there would be a lot of public opposition to a dam on the Upper Wanganui River, and that the area had been investigated in the 1970s, and the area found to be ‘geologically unsuited’ for a hydro storage. Currently there is an oversupply of electricity in NZ thanks to the imminent closure of the Rio Tinto smelter (which I actually foresaw), however irrespective of the market context, a producing/profitable asset is better than simply a flood mitigation scheme that 'protects' what already exists. You could argue a flood would only 'immerse' houses, and not write them off. I'm not in a position to know. They are issues that should be addressed. The fact is that new engineering solutions are being developed all of the time; and we need young people who are prepared to find them. Maybe its not an issue for a 'young prospective lawyer' so much as a 'young engineer'.

Now, this is the useful technical knowledge that you want on council. Local governments need good technical knowledge. It does not have to come from the inside; however outside consultants also have a tendency to offer 'safe' proven solutions. There needs to be a tender and project team to entertain alternative solutions. A mayor hydro scheme might actually win private-national government support; particularly if such a scheme could function as a load balancing reserve like the Snowy River Scheme in Australia. But I’d also be interested in knowing if any technological innovations have occurred in the last 30 years to challenge this ‘accepted wisdom’ because most things are ‘bad ideas’ until a new engineer comes along and proves otherwise.
In this particular debate, Michael Laws, older and more experienced, was telling James Penn that ‘innovation funds always fail’. A woman from the audience cited ‘her evidence’ that micro-finance worked in Africa. I too know that micro-finance has worked very well in third world countries. No idea should be dismissed out of hand, however it must be acknowledged that the context is different. Third world communities are 'low-skill' countries that can afford to work with low-cost capital. They struggle to buy a sewing machine. This is not the nature of the Western 'capital hurdle'. The greater concern is that Western kids, and rural kids particularly, are not as 'commercially astute' or savvy as they need to be. Financial literacy is at a low point. Its not just about 'backing winners'; its about ensuring that your 'youth capital' has the right values to actually want to succeed. As Michael indicated, its little point helping youths if they are inevitably going to leave, and they should leave. I went to Japan and the Philippines, and now in my 40s, I'm in Wanganui as Michael said.

The problem with old people is that they are accustomed to being right; that they can struggle with the possibility that they are wrong. They are always armed with more factual evidence to convince themselves that they are right. Pretty soon they are only reading materials that actually supports their view, if they read at all. Sometimes they'll read contrary views and find some rationalisation to reject it. Michael was adamant that ‘innovation funds never work’. The reality is that ‘government funded custodial funds’ usually do fail, and there is good reasons for this to be the case. The point being that Michael Laws never saw the ‘black swan’ to know that not all swans are white. This is not a justification for James Penn's innovation fund; its reason to look at its merits. This is where youth and critical thinking are useful. Now, you might question whether James is too young. Well, there is another issue and that is context. We live in an internet world now. There is so much knowledge online these days, that youths are exposed to such a diaspora of information, that they are far more knowledgeable than these old folk when they were of equivalent age. More importantly, they are more adept at researching in the modern era. James brings that dynamism as well as critical thinking to the table. He will however have his limits however because he is barely out of school. Don't expect him to be a Fullbright Scholar from the get-go; but does he offer something on Wanganui Council...I think so.

Not everything went well for both candidates. Both candidates failed to pick up on a flaws in their ‘economic policy’. Wanganui Council is struggling with high debt levels. The response of both candidates conveyed some ignorance of finance. Laws wants to ‘peg rates to inflation’ whilst Penn wants to index them to ‘inflation plus’. Penn did qualify that by saying that he would use more discretion. The reality however is that it should only be about ‘cost vs benefit’ to rate payers; most particularly when debt is so cheap. If you are going to use debt, now is the time. You would think debt is therefore an opportunity. The problem is that councils are 'democracies' and democracies are majoritive rather than rational, and the clowns are usually in the majority. We need more critical thinkers like James Penn, Michael Laws and Rory Smith, and fewer populists like Phillipa Baker-Hogan and Hamish McDouall.
You can argue that there is an assessment about ‘which ratepayers’ given some level of cross-subsidisation across the electorate, but inflation is not a good barometer, and it should never have been flagged as a benchmark of suffering because ‘inflation’ is not a benchmark of purchasing power. This is mythology. There is no correlation between inflation and cost of living. Consider:
1. Monetary policy changes need not pass through to ‘cost of living’ inflation; but rather through to ‘asset inflation’. Clearly people on a pension are most vulnerable to the latter; and that people in Wanganui are less exposed to ‘asset inflation’ because of depopulation.
2. There is an over-supply of labour and competition from Asian labour markets, so there is no growth in ‘unskilled’ wage costs. People living on benefits and pensions are therefore vulnerable; so that is probably a starting point for rates. Maybe the selling argument for Wanganui is a 'rates regime that is indexed to the pension', as opposed to inflation. Would that not give certainty to a lot of rate payers and lifetime pension collectors. Of course, these are not high-income recipients, but at least it would fill vacant housing stock and get the construction industry going.
So both candidates did poorly on this issue; and both candidates failed to address the ‘elephant in the room’, which is the poor perception of Wanganui – thanks to crime. Unless any candidate is prepared to address the social issues in the town, then people are simply going to avoid Wanganui. Laws unfortunately has a track record in this arena as former mayor. More problematic perhaps is the fact that he ‘still has a voice’. In fairness to Michael, he is a very articulate and good critical thinker; the problem is that he is not ‘self-critical’. His deference to his own ego is immeasurable. This is a problem for Wanganui because ‘as a leader in the community’ he becomes a ‘significant danger’ for the following reasons:
1. Andrew Wilson was not a threat to Wanganui. Media coverage had ‘exposed it’. Laws took the issue national, and made Wanganui a ‘pedophile haven’ when in a broader ‘weighted’ perspective, we ought to realize that 75-85% of pedophilia occurs within the family.
2. Laws, and others like Hamish McDouall, our local Labour Party candidate gave this a profile it did not need, in order to fight ‘a not-in-my-backyard’ (NIMBY) campaign. They were even prepared to take it to the High Court. This is one way council mayors and councillors have been wasting rate payer money. In James hands, Wilson would have been probably treated as any other paedophile….given that they are all around us. Laws created a false stereotype…but it gets worse.
3. Laws was engaging, along with other councillors, and they should all be identified by the Wanganui Chronicle, in fear-mongering for populist reasons. Philippa Hogan-Baker is out doing the same over illegal highs. Laws actually was critical of Hogan-Baker, and rightly so, but again, he simply lacks the ‘self-critical’ quality that has him ‘pinned as an autocrat’, yet he stands ready to identify Penn as so. Pot...Kettle from Laws. The problem with Laws fear-mongering is that people in the streets of Wanganui are now vulnerable to accusations of incest simply by talking to a child or walking along the street. He has created that much fear. Laws has precipitated a witch-hunt. I know of one case; it would be interesting to know from police if there had been an escalation in ‘reported incests’ since this issue became a national scandal. Awareness is great - but let it be cased on facts and understanding; not fear and loathing.

In terms of debating skills, James Penn was far more dignified and respectful to his counter-party, but Laws was able to land some ‘illegal punches’ so to speak, as well as some 'solid blows'. James did allow Laws to lampoon him on seemingly a simple issue of ‘h’ in Wanganui. He should have more strongly argued that Laws made the ‘h issue’ a national issue by holding a referendum on it. Moreover Penn allowed Laws to attack him as ‘undemocratic’ because he would not have funded the referendum on the ‘h word’. He needed to reiterate that it was a small issue that needed a decision from the council, not populist mandates from  a costly referendum. People don't know what they want until they are educated. Michael Laws rendered a 'straw argument', that its democracy or not. Not that simple Michael; its a question of the 'type' of people participation. So Michael peddling false dichotomies.

Laws did convey a better awareness of the dynamics which shape Wanganui. He correctly realizes, as in other rural cities worldwide, that youth tends to leave for the big cities, and likewise it can be argued that most immigrants tend to prefer cities for the greater support for their respective cultures. Laws therefore wants to target former residents when they have children. Which poses the question – why is he making Wanganui about Wilson? He might well argue that Wilson has a threat to that image. I would argue he blew the issue out of perspective. We are surrounded by paedophiles. Risk is managed; not avoided. Laws created unrealistic fears; precipitated scaremongering (along with other councillors) and failed to even observe the evidence related to paedophilia. He ditched the ‘selling point’ he had identified for Wanganui for populism. He was however right on another issue. Wanganui cannot match the cities for night-life; but by the same terms, Wanganui could do a lot better to cater for youths. Maybe it only requires an inter-city bus at opportune times. i.e. What if drunkards could be taken off the road at night by being given a ‘low-cost bus service’ to and from Palmerston, and vice versa, so that folk here would have a ‘cheap’ means of taking in other restaurants and pubs, and Palmerston can do vice versa. Even if it was a ‘pre-booked’ opportunity offered infrequently. This would partially see more people spending money in other cities, but at least it would mean ‘intra-regional’ opportunity and dynamism, and it might serve to keep people in the community. Maybe it might see people living in Wanganui, but working in Palmerston North. Likewise people in Palmerston North might welcome a trip to Wanganui and its beach. Such a means might even be a means of increasingly services from their respective airports. A one-hour bus to Wanganui airport for a flight to Auckland, or a one-hour bus to Palmerston North for a flight to Christchurch. It might be the better alternative to a poor transfer in Wellington en-route to Christchurch or Sydney for business people who these days don't need to live in these high-cost cities. These are the type of ‘flexible’ work-arounds that allow business and their families to locate in Wanganui. Being from Sydney myself, it is a very hard commute to East Coast Australia. If there were more flexible arrangements for business and regular commuters, Wanganui would attract more people. We already have pretty seemless arrangements to Australia, so better connections might be a precursor to more Australians, and for 'Big Oil' seeking oil & gas offshore NZ, better flight connectivity might actually pip Wanganui over New Plymouth as a regional office serving these offshore fields, given that Wanganui is closer to the centre of government.

I’d love to see James Penn on the council. More concerning however is that he is only one voice. We need 6 other James Penn’s, well perhaps somewhat older, in order to ensure a ‘reflective’ critical perspective of city issues. One of the huge problems for cities in NZ is keeping skilled persons, and Wanganui is more vulnerable than most communities because its small and depopulating.

You can view the entertaining debate at Wanganui Online.

Michael Laws for mayor?
One of the pressing issues with respect to Laws is the fact that he is also one of 3 candidates looking to become mayor. The problem is that he simply lacks credibility for a number of reasons – least of all his track record on mayoral issues. He has supplanted the prospect of a healthy image for Wanganui with a deference for his own ‘pseudo-ego’. On the issue of gang patches and Stuart Murray Wilson, he placed the image of Wanganui in the media for all the wrong reasons. Now, in fairness to him, Wanganui has social issues, but he made no progress resolving those. The greater issue is that no leader is making a difference on this issue. They simply don’t because there is little insight on this issue, inside and even outside the community. Wanganui needs to find its own innovative solutions. Laws acknowledges ‘the lack of leadership in social services’, but he did not deliver as councillor or mayor in this respect. Frankly, the city is without a capable leader, so I'd argue that it needs 'by default' Annette Main with a more capable CEO who can actually tackle those issues. Clearly that is not a person to be elected; its an appointment.
The other problem with Laws as leader is that he is simply an egomaniac who needs to be the centre of attention. Humorous until you receive your rates bill and wonder where does it go. He is a capable contributor as a councillor, but he’s utterly destructive as a community spokesperson. Even his role as a radio host is ominous. For this reason, I’d prefer to see Annette Main as mayor and both Michael Laws and James Penn as councillors. I think there are other capable people as councillors, but I’d like to see Penn elected most particularly for what he can become as a ‘future mayor’? He might instead be a future MP for Wanganui in a few years when Chester Burrows retires. Who knows.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Finally media awareness of Auckland volcanic threat

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This is the third time we have written about the threat posed by a volcanic eruption in the Auckland Volcanic Field, that underpins much of Auckland City, New Zealand. We first wrote about it in March 2013, then again in April 2013, and again in this article. Finally, today, the NZ Herald has decided to write about the issue, which is critical, not just to alert people, but for government to actually take steps to avert castastrophe. What people need to consider is:
1. There is no reason not to expect another eruption. They have been so periodic that it gives high causal justification to expect another at some point.
2. Volcanic eruptions when they underlie or adjoin a city pose a huge disruptive force; far more catastrophic than earthquakes.

The reason why this is so is because:
1. The sonic blast from the volcano is going to shower the city, or parts of the city with rock debris, killing people, destroying a lot of popular. The impact would be akin to an earthquake. Less damage to the structural integrity of buildings, but more damage to their cladding/facade.
2. The volcaniclastic material and dust will blanket the city. The implication is that it will be a huge disruption to the city. Compared to an earthquake, where the people can get on with their lives within a week, i.e. Businesses can keep going, if they are psychologically prepared, and where there is relatively less disruption to transport, and only 'certain zones' are affected. Widespread dust will stop everything. Its akin to a snow storm; and even if you move the dust, it will wash back with rain. It will be redistributed by train. In contrast, an earthquake spreads no debris, aside from liquefaction (sand) along fault lines, and often it does not even rupture land/highways, so its simply undermining buildings/foundations in certain zones. It was rather unlucky that the central CBD of Christchurch was even hit. The other issue was the 'shallowness' and 'intensity' of the quake, and the fact that Christchurch was not designed for such events. i.e. It had many relict 'brittle' structures. In contrast, Japanese earthquakes are 80-100km deep, the earth 'rolls' and buildings sway accordingly.

Now, the good news is that it might not be central to Auckland, but rather on the fringes, so having less effect, and possibly not blocking major transport corridors. It might be a relatively small eruption with insubstantial dust. The win has a good chance of carrying the dust out to see, and strong wins will serve to disperse the dust further afield...though for a major eruption, that could actually be a problem. A greater problem is perhaps that there is no precedent for this event. It has no modern comparison. It will be not as severe as the Pompeii (Italy 11th Century?) or the Mt Pinotubo eruption in 1984 (with its 11 feet of ash). These are different styles of eruption. So, we are really in the dark as to the precise nature, however much can be garnered from exposed ash deposits. After all, that's how they are able to calculate the historical significance of these fields. NZ is one of the few countries to build a city on a volcanic field. I'm not aware of any other, aside from Iceland, where the entire island is a volcano. Even then, its not so much an explosive style of eruptive volcano, but generally a non-viscosity, fission-style type of eruption.

Now, in commercial terms, you generally build infrastructure with a 20-40 year life. So it might make sense to build a city on a volcanic field. Sadly, that concession only works if the eruption is after your 40 year project life. You might otherwise feel a bit jaded if you did not take a threat to your property seriously if you'd just made improvements to your property and then an eruption occurred weeks or a year later...even 5 years. The reality however that, its not so much a problem of infrastructure loss as:
1. Looting and vandalism in the wake of it, as you flee for safety
2. Destruction of gardens, external façade, windows
3. Damage to internal windows. Recognise that there will probably not be materials to board up your house windows, if that will even make a difference. It will depend on the size of the blast and your proximity to an unknown centre within the field, or close to it.

It becomes apparent that Auckland will be disrupted for several months. Food will need to be flown in until arteries are cleared. Rain will play havoc with that. It will be a different, even unique type of emergency.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Just one of the many great companies I have identified over the years - Xero Ltd (NZE:XRO)

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In Jan 2010 I recommended a NZ stock called Xero. Based on the Google Finance chart it was $1.64. Anyway, 3.5 years later its $17.64 and worth $2 billion dollars, and its NZ's largest listed company apparently...that's hard to believe. Normally its hard to find such stocks in a small market like NZ.
Anyway I wanted to convey the appeal of managing your own money, and dumping the 'dumbed down' investor belief that you should passively outsource your money to some fund manager who takes you for a commission. Here is the recommendation. There are few sectors which offer that scale of profits. Mining is one of them; online services is another, but that is generally a sector that does not need money. Mining needs money, and it pays nicely. Now is good timing for gold, and a good time to prepare for industrial minerals. Companies like MLX are good examples of the types of company, but you wait for the right time for these companies. Let me explain how to do it - start with Global Mining Investing.
At the time I was less than enthusiastic about NZ Windfarms (NZE:NWF), but thought that they might be worth a punt at 22c. Today they are 7.5c, though if I invested, I am sure I would have long abandoned that one. The reasons it was not a good option:
1. It was investing - always a less scalable option given the high capital cost
2. It had a major strategic partner who as a controlling shareholder could probably care less about capital optimisation
3. It was competing with China
4. Lack of local subsidies for wind
5. The problem with Resource Management Consent - I believe matters are improving in this respect
6. Not much growth in electricity demand - but then incremental capacity additions are well-suited to wind
7. The fact that grid stabilisation is currently not well-suited to a strong reliance on wind, particularly with the under-capitalised NZ grid, though I suspect that problem has since tipped in the other direction.

The reasons to like it were:
1. Prospects for technological innovation
2. Strong local support for wind
3. Appealing local market conditions for wind
4. The possibility of new wind subsidies

I note that Oceana Gold might be a stock to look at because its high cost, so has leverage to gold price incease, but I doubt it has a good resource base to interest me..so I'll steer away from it. I'll stick to the deeper 'Australian' fish bowl.

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Profit from mining with Global Mining Investing eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

New Economics Party - a new hope for NZ?

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New Zealand has the makings of a new political party. Well, its early days for this one because it seems to have no substantive backers. Its called the 'New Economics Party' but my evaluation will demonstrate that its not 'new' just 'ignorance of economics', and that's far from new. The problem with any new political party, or  group with such ambitions is that they inevitably convey a lack of understanding of economics and psychology.
Their idea is to tax 'resources' rather than 'production'. This is a rather silly idea because any tax on resources is passed through to work, so is there any distinction? A resource is nothing without preparation or reticulation/distribution, so its a moot point. Someone has to pay, and its not the resource. So 'resource rent' is not a magical escape from the cost of supporting a welfare state, if that is implied.

There is actually some value in this thinking, though I cannot sanction a collectivist notion like 'the Earth (or resources) are for sharing'. This is not substantive enough as an intellectual foundation, however I would argue or support the notion that people did not 'make' or create' resources. They were already there. So what are we to make of resources which are there, but someone makes them marketable. There is some value in their 'potential' value. The question is:
1. Should private persons be allowed to develop them at zero cost. This is not reasonable because resource assessment and exploitation entails impositions on competing land uses. Do people have a right to expect no impedence from competing land users. i.e. Does your lifestyle property have a right not to expect explosive vibration from a nearby development, even if its not on your land? Clearly, resource development is inextricably linked to other issues.
2. Should private persons be able to develop them after related costs. This makes the most sense simply because it recognises the value created by individuals who didn't create the value, say gold mineral, but they did identify it, spend money appraising it, carrying the risk of plant, capital and labour in order to extract it. The argument is that they are making 'super profits', but those profits arose only because of the boom-bust economy created by governments. A private 'unfettered' market would be more predictable, and more boring. Spculators love contemporary market uncertainty because they manage it full time. Fund managers love uncertainty too because they get to manage the funds of apprehensive salarymen. They get to buy out cheap those small resource companies small investors are scared to invest in.
3. Should a 'middle-man' government to able to act as a custodian and tax those resources or any resulting income for the benefit of others. The implication is that these resources are a 'public good' and that the government can impose high royalties upon these resources so that the miner only extracts a 'nominal' return. The implication of this would be that the governments of the world would effectively be planning resource development and production, and inevitably prices. Might the world benefit from resource planning? No question. Its in fact already there, though it could be argued that the information distribution is less than 'fair'. That is another question, insofar as markets need to appraise market information. What is the public's right to know? What is the implication of not knowing. Risk = ignorance. The implication of not knowing is higher cost of capital. This is not good for resource developers, and thus the justification why resource developers have a vested 'common' interest in disclosure. The flipside is that they might perceive themselves to have a vested interest in misleading information, i.e. Not disclosing or minimalising information about a project. This however does require an act of faith by the investor, and this should not be accepted even if corporate custodians are considered 'trustees', their interests are split between corporation and shareholders. Remember that they are employed by the corporation, which is considered a 'separate entity'. Individual shareholders are therefore collectivised in their interests. You might wonder about how to balance new versus existing shareholders.

The rationale for this 'new economics' is the cliche of resource overuse, resource depletion and climate change. This is reactionary populism. i.e. Politics chasing 'pseudo-science'. Resource depletion is nonsense; long ago discounted. There is no shortage of resources; their presence is essentially infinite. The rhetoric is that there is a fixed quantity of metal in the universe. The stupidity of this argument is that:
1. There is not a fixed number of humans
2. Its an incredibly large universe
3. Our per capita resource use is actually falling in the West whilst rates are still high in the third world, and their population growth rates are rapidly falling. The concerns of today will be the opposite in 30 years time. Then we will be complaining about lack of consumption. i.e. We might be compelled to stimulate people to consume. In fact I doubt this will be the case because I think we will have shifted to a new philosophical system.

This party suggests we need multiple currencies; but in fact this is precisely what we have. There is nothing wrong with that; the problem is that they are supported by the arbitrary power of the government to tax.

"Equality, according to research, makes everyone happier"

This is absolute nonsense for two reasons. The concept of happiness is a rather 'arbitrary' measure of well-being simply because it relies on people's honesty in being able to appraise their happiness. I'd argue that people are surprisingly successful in their capacity to delude themselves into thinking they are happy. I would challenge you to ask people 'who say they are happy' to actually tell you why. I think you might find it enlightening. Its often a wish rather than the true state of their apprehensions about their lives, and their suspicions and disdain of others. The other problem is the contemporary measure of 'equality'. This conception is very often a false dichotomy.

Inequality is actually a non-issue. People don't need to be concerned about 'inequality'; they need to be concerned about 'rights', and basic needs. The richest people are found in 'prosperous' societies; so what threat do they pose. They don't unless given an extortionary sanction by governments. So government is the threat. Money can be used for good or bad; its government which has a monopoly over the legitimatised use of force. The other issue is sustainability living to avoid destitution, and that generally requires some survival strategy and provisions for mishap. It does not require a great deal of wealth, simply a house and farm plot and a basic insurance scheme. We live in a world where people's living standards depend on other's capacity to avoid extortive taxation. This can only justify spurning civil society. They have been disincentivised to produce.

The notion of a state state economy is a nonsensical conception for a number of reasons:
1. There is no justification for renouncing success or security
2. Provisions for security are founded on 'forward-looking' provisions, not avoidance strategies
3.

This political party posits as some defence against 'dog-eat-dog' capitalism, but is precisely the implication of its incoherent values. It simply assumes too much.

Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
Profit from mining with Global Mining Investing eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com