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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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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John Key The Moderate - what does it mean?

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John Key clearly considers himself a moderate. What does that mean?

Prime Minister John Key addressed the issue of the Waitangi Treaty at his annual Waitangi Day address, as is customary. Just as customary is to say nothing substantive, and to engage in rhetoric which contributes nothing to the issue. Now, the prospects of a settlement of Waitangi issues, some settlement of grievances, is considered extreme by Key. He sees himself in the ‘moderate’ of course, and anyone seeking resolution as ‘extreme’. After all, John Key is hardly moving the debate towards anything. I’m an Aussie…I have nothing to gain from this issue. Do I want to see Maori recognised as ‘first occupants’ and worthy of sovereignty? No, that ship has sailed. Perhaps its easier for Key to dismiss the issue if he can erect a ‘straw argument’ like that and dismiss all people who feel a sense of dismay at where the Waitangi settlement is ‘not’ going.
Key speaks of ‘public goodwill’ as if that is a meaningful conception in the context. Either a resolution achieves one of two things:
1. It achieves the interpreted objectives of the Waitangi Treaty
2. It achieves something better
I would argue that the framework and values of the Waitangi Treaty are illegitimate and irrelevant; not because the treaty was not signed by most of the tribes, nor by the British Crown, but because its values are not fixing with justice. This is an opportunity to achieve something more than the treaty sought. At the time of the Treaty, the British people were subjugated to the collective notion of ‘empire’, and that concept ought to be equally as abhorrent to Pakehe as Maori.
Key is making the same old tired claims of old, hoping that the issue will die. It will die by this method; but is that a desirable outcome. Key would sooner quash the aspirations of people, rather than contend with them.

‘People are not reasonable’ he might argue; or that ‘you will never please everyone’. 

But I see no great effort by any government since the Treaty was raised to address the issues. Instead, governments are only too pleased to outsource the task to the courts.
He talks of participation but offers no avenue for achieving it. No government does. It is a common attribute of all representative democracies to malign minorities. For his government that is an easier task than most considering:
1. He confronts a useless opposition
2. He need only offer token concessions to vote as a ‘extortion bloc’
3. He faces no Senate
4. The two major parties developed a Bill of Rights to create the illusion of protection; despite it making little meaningful difference to the nation’s people. Ask yourself – did it make a difference to your life? Did it address issues raised by the Treaty of Waitangi? No, it was not designed to solve problems. It was framed to avoid them. This was actually the original motive of the Treaty of Waitangi in the first place. The British government wanted to avoid conflict. It used the idea of a treaty to invoke a sense of purpose and goodwill with Maori. The Maori simply assumed it existed by matter of intent. They did not know that an unsigned document is useless. Of course, given that the British drafted it, it carries some significance….at least it terms of terms of reference.
John Key asserted that “the Treaty settlements process had given iwi the resources needed to run their own affairs, create jobs and care for their people”.
Really; was the treaty just about money and subsidised jobs? Well, it might well be about that for people who see no other motivation in life but to provide for family and do something constructive. But why can’t it be about more than that? Why can’t it be about things not even raised by the original agreement? For instance:
1. Why can’t it be about the inappropriateness of tribal leaders committing their people to a contract, regardless of whether it was in their interests or not
2. Why can’t it be about the illegitimacy of a contract with a party who does not have the legal efficacy to appreciate the merits of the contract
3. Why can’t it be a question of whether the state has the capacity to impose its will on anyone

All these value judgements are assumed. None of these moral imperatives have been proven. They are accepted because they serve the status quo, and keep people working towards goals subscribed by others. So what does that mean:
1. Working for the government – retaining only a minority stake in one’s efforts
2. Losing choices – because any other ‘non-conformist’ route is punished by lack of tax concessions, damaging your credit ranking, diminishing your right to travel to foreign countries, being denied access to certain services.

John Keys says “settlements largely relied on public good will and acknowledgement that the grievances were genuine”.

Unfortunately they are not so important to be a matter of priority after 140 years.
He argues that the “actions of "permanently aggrieved" protestors, including those at Waitangi, would endanger the public consensus there was over the issue of settling legitimate grievances”.
What a farcically meaningless comment to make. The entire purpose of a parliament is to countenance points of conflict. No, sorry, modern democracy or at least ‘conservatism’ entails avoiding those morally questionable issues that you cannot resolve. It therefore has to be about concrete, self-event things like money. Well, they are not self-evident, but both sides of government seem able to handle those. You might wonder how without conceptual frame of reference. But in their case, it’s all about extortion or ‘political pull’, and their capacity to make it happen.

“Public good will should not be taken for granted. It needs to be treated with respect. It is short-sighted and counter-productive of activists to use tactics and language which have the effect of eroding public support for initiatives aimed at turning around the very situation that the activists are complaining about”.

If you think about it…that is actually a nice, drawn-out way of saying, as Hitler did:

“You are nothing, your nation is everything”.

Hitler had no time to waste on fluff. The modern political party lives on fluff. Whilst they fluff around, they must be making money. Why would you want to preside over government without making money? Where is the sense of pride in being ineffectual? There must be something in it…certainly no self-respect. These issues have been kicking around for 140 years. We are about to have a court case – waste of money – as Maori question whether they have a legal claim to the water in the Mighty River Corporation privatisation. It’s a joke. Is it extreme to raise that as an issue. Well, the Supreme Court did not seem to dismiss the issue out of hand. If one wants to examine the track record of John Key, the National Party, Labour Party or indeed the entire parliament, ask yourself what effort their government took to seek peace in countries taking protection of rights…and yet in the name of liberty or democracy, they are entering Iraq. It must surely be about money/oil? Why nothing about:
1. East Timor
2. PNG
3. Solomon Islands
4. Fiji
5. Muslims of Mindanao
6. Australian aborigines

Even in this last case, long considered ‘extremists’, the Moros of Mindanao in the Philippines are finally getting some justice. No thanks to Western adherents to high standards of conduct. This is despite NZ having very little trade with the Philippines.
I’m no ‘wet-nosed’ liberal. I just think governments ought to be motivated by something more than rhetoric to keep their jobs, to lock in some mindless state of subservient harmony. I think Western governments are transfixed on Japan as a model of how to achieve a ‘compliant society’. In Japan, people don’t question government. The two major parties do as they please. Celebrities tie themselves to governments, and in the end they are seduced by it.

“Turning around the current waste of human potential would do more for Maori and for New Zealand than probably any other single change”.

This is undoubtedly the case; but first John Key has to identify the nature of the ‘waste’…why the human potential of Maori has been diminished. I can identify several reasons:
1. Catch-up: Maoris started behind – they were handicapped from a time going back 130 years.
2. Legacy: They were left with an entrenched legacy of ‘Maoridom’ which rested on the premise that they were disempowered, marginalised victims, that any rhetoric of justice was not real; it was just for show. They were not given or confronted with the values which made Pakehe successful and Maori unsuccessful. Those issues were avoided because they feel compelled to leave in place the notion of a collective Maori identity, which has greatly diminished the lives of all indigenous persons around the world. It was about ‘achieving compliance’ in the short term. The implication however has meant 140 years of unresolved contention. This government, like the others, will not resolve it.

“He spoke approvingly of a United Maori Mission boarding hostel for 50 boys within the Auckland Grammar zone, saying it gave those boys a chance for a good education”.

This is not a basis for prosperity among Maori; its an elitist argument which says:
1. These Pakehe wannabes are your custodians because they are educated and think like us ‘white folk’
2. These people are successful because they are very smart, and probably wealthier, and from a good family, so there is no reason you can’t succeed like them.

“It is one of the reasons why we have a positive and forward-looking relationship between iwi and Crown. I have no doubt that we New Zealanders are better off because of it”.

No John, you don’t have a relationship with Maori. You have a relationship with the only people your governments sanction to represent Maori. You decided by forming a coalition with the Maori Party that these people are worthy of being in a coalition. You went out of your way to strike that deal, as king maker, because it suits your agenda. Most Maori don’t subscribe to your distorted world view because you have popularised these people. No doubt your ‘Auckland Grammar boarders’ will be targeted by your party as you attempt to brand your party as the part for the people. You are only so long as you dumb people down and remain dumbfounded by execution paralysis.

Quotes from NZ Herald, 6th Feb 2013.

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Report card for National Party

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Ok, here is my report card for NZ's National Party....I got a bit bored going through this list....but it gives them something to start on.

See this policy list from the National Party - reading this I am inclined to think that there is a lot being done. What is wrong with it? Firstly I am inclined to say that the National Party is not doing a very good job at getting its message out to the public. This is a document that needs to be dispersed. But it really is so anti-intellectual in the realm of welfare policy, education. It simply resorts to paying off the Maoris; as if that will advance welfare. There are huge opportunity costs by not acting.

1. Future fund – good stuff

2. Road development – why does the govt need to develop ‘new’ roads; or is this merely ‘justified’ maintenance.

3. Road arteries – why does the country need to invest in new arterial roads when oil prices are high and the population is static. Is there any return on this investment?

4. Regional road infrastructure – probably justified

5. Regional rail infrastructure – probably justified

6. Regional infrastructure – probably justified

7. Regional rail infrastructure – justified in the context of higher oil prices

8. Auckland rail infrastructure – justified in the context of growing population and higher oil prices

9. Inter-island terminal – they are studying the value of a terminal at Clifford Bay. This would avoid the mountains around Blenheim and Kaikoura. Container terminal on the south island might make sense, but is this a govt project? And its already fairly close to Christchurch. The market appeal could only be for local trade? Why not a connection to Australia?

10. Broadband – worthy spending

11. Rural broadband – not a priority beyond the major towns; at least not off main trunk lines and towns under 40,000.

12. Digital switchover – fine

13. Network for learning – fine

14. National grid – fine, the network is not terribly stable, so needs upgrading, though they need to fix the pricing model for electricity.

15. Home insulation – sensible intent, the problem is the subsidy just forces up the installers fee. I would also add that it contradicts global warming. Insulate houses and people start heating homes, stop wearing woolen garments. i.e. they buy cheaper Chinese cotton, stop buying expensive NZ wool.

16. Upgrade state housing – better still fix the economy so they can buy the home, and given them incentives to do so.

17. Health expenditure – There is an expectation of the latest medical technology; this requires more spending in this area. Popular policy; but priority beyond immediate maintenance? Maybe it makes more sense to send people over to Australia? I wonder if shared infrastructure with Australia is a better model?

18. Schools upgrade – Probably justified, but the problem is that the biggest issue is school ‘content’ not infrastructure. Kids don’t learn to think at school. So this is a very anti-intellectual policy…typical of a pragmatic govt.

19. Earthquake Recovery – Fair enough

20. Sports stadium – not sure why this is policy. Popular…but it doesn’t make money.

21. Resource consents – this is very important policy – reasonable expectations

22. RMA streamlining – this is very important policy – reasonable expectations

23. RMA council punitive fines – this means the rate payer pays right? Well, I guess they get the investment, and can spurn council?

24. RMA streamlining – fine

25. Natural hazards – RMA consideration of natural hazards. Really? This is new?

26. Fresh water policy – fine, but is it a priority?

27. Simpler plans – sometimes simple is not the issue.

28. Trial employment – I don’t agree..employers will just pay staff to leave earlier, so its just a cost. You can’t legislate common sense.

29. Personal grievance reform – This is probably the way to deal with last issue. Not compulsory labour costs

30. Holiday Reform – This is ok

31. Hobbit law – yep, keep the film industry happy

32. Youth wage – yep, kids need every opportunity to save money to leave the country.

33. Collective bargaining – End collective bargaining, its extortion; though you do have to offer people a union-based channel to take grievances to some objective employment court; or ‘grievance’ system (see #29)

34. Constructive dismissal – this ought to be part of #29.

35. Flexible worker terms – I understand worker needs for fixed roster, as well as corporate desirability for flexibility. i.e. Is this so hard?

36. Ban of lights & thermal power – There is no need for a ban on thermal power plant, as no one is going to build one now. Light bulbs issue; non issue.

37. State assets – selling power stations is not going to make them more competitive; in fact, you can expect greater extortion, as is happening by most of the larger businesses because there is no population growth, and inadequate regulation.

38. Utility competition – Making it easier for consumers to shift utility does not address the costs built into the system; that’s economic rationalism, but it does serve govts with an eye on asset sales.

39. Hedge market – sensible

40. Consumer compensation – sensible

41. Less regulation – cut bureaucracy but don’t abandon regulation

42. ACC funding – yep, needs to be sustainably

43. ACC ratings – yep

44. Employee levies – yep

45. Employer levies – yep

46. ACC choice – Any sign its over-priced? It might add to cost

47. ACC choice – Any sign its over-priced? It might add to cost

48. Mobile telecom termination – fine, but what about data??

49. Telco competition – fine

50. Productivity Commission – so late? Should have been done 2 decades ago…assuming that anyone will listen to it.

51. Mining & energy safety – good idea – 2 decades too late! Oh that’s right, Labour ditched it in 1993.

52. Fishing regulation – fine

53. Fast track building consents – good stuff

54. DIY reform – good stuff

55. Leaky homes – Drop this as installers just take the subsidy.

56. Building sector accountability – fine, but what about the extortion in hardware sector.

57. Financial sector reform of regulation – yeh, good one….you will never do it really. Or you will do it, then in 5-10 years you will undo it.

58. Financial service regulation – training is not the issue; ethics and responsibility are the issues, but you’ve spurned education, so toss that idea.

59. Kiwisaver investor – fine

60. Regulation of securities - fine

……

83. Water storage – yep, don’t build levy banks in Wanganui, build a river diversion scheme and generate more power.

84. Petroleum exploration – great stuff! You are listening to me. Personally, I’d be spending $100mil, not $40mil.

85. Environmental regulation – fine

86. Petroleum permits – fine, but retain a good state royalty; don’t give away all the ‘resource’ as you will end up with immensely rich people who did not earn it (all), and then the ghost of Helen Clark or Gillard (or you) will expropriate it.

103. Convention Centre – don’t use gambling to finance a convention centre. How silly is that. If it does not stand up on its merits, then don’t finance by appealing to ‘vices’. This is silly policy.

104. Air transport – What about air transport to Australia – open it up guys! I want to fly Wanganui to Newcastle or Byron Bay, not to Sydney.

This leaves me wondering what is missing – I would add the following:

1. Improve biosecurity – NZ food output is important, and so is Australia’s, so less please them to get greater access to the Australian market place.

2. Adopt ANZAC liberalization – open up deregulation of pan-Australian flights

3. Sell Air New Zealand – the enterprise is well-run, it will never be worth more than in a few years when the market recovers.

4. Adult education – What about intellectual literary and parenting literacy??

5. Local government reform - I don't see this on the list, but I understand some constraints are being placed on local govt...Good stuff.

6. Gas industry

Now, if we were going to be entirely honest, the National Party would also say that:

121. Prison construction - they are building more prisons because the economy is going to the dogs.

122. Taxation - they are building a $1 billion super computer to tax people better. i.e. More more pernicious form of enslavement because they don't know how to encourage people 'voluntarily', they feel compelled to tell us how its done.

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

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

Dialogue with Don Brash over central bank accountability

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This is a Facebook conversation I had with Don Brash, former Governor or the Reserve Bank of NZ, and former leader of the National Party on the current economic crisis.

Andrew Sheldon talks to Don Brash

Don, do you accept (or better still, have evidence to suggest) that governments (say the US or UK) are too cozy with bankers. When you look at how the US has bailed out the banks rather than plausibly supporting the creditors, might this point to an underhanded relationship between the two...for mutual (dubious, unenlightened) self-interest. And should not have the National Party have anticipated this crisis a decade ago...I know I did with a great many others. Why did NZ, Aust, Canada central bank governors allow it to go on... Perhaps you only want to speak for yourself? But perhaps you could also speak generally.

ADDENDUM: My criticism of US government fiscal and monetary policy extends back to 2000, however I only started blogging in 2005 – and continued my criticism.

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Like · · October 11 at 2:46pm ·

Don Brash

Andrew, no, actually I don't think the US and UK governments have had too close a relationship with the banks. The reality is that the banks are at the very heart of the financial system - both the credit system and the payments system. The governments of the US and the UK (and of course of many other countries also) realised that the collapse of their banks would have had an impact on their whole economies which would have been utterly disastrous, so they bailed them out. Should they have regulated them more tightly to avoid the banks getting into trouble? Don't get me started! I blame the collapse of the banks in PART on the policies of some of the governments, in part on the greed and stupidity of some of the banks involved, and in part on the very tight system of regulation which actually led many people to assume taht the banks were effectively government guaranteed.

You ask why did NZ, Australian, and Canadian central bank governors "allow it to go on". I'm not sure I understand your question. The banks in those three countries are among the most robust in the world.

October 11 at 8:58pm · Like

Andrew Sheldon

By the last part of the question, I meant in terms of weighing into US, EU, Japanese govt policy decisions, an independent central bank believing that the substantive financial markets which underpin their demand have a substantive interest in 'sustained growth'. The policies of these govts have undermined global growth...that affects every economy. Say for NZ, does not the central bank have a mandate to preserve growth, thus weigh into international markets which affect their outlook?

October 11 at 9:05pm · Like

Andrew Sheldon I appreciate our banks are fine...more concerned with the broader economy, and the unsustainable interest rates which lured in home buyers, causing injury....not to mention the effects in equities.

October 11 at 9:06pm · Like

Andrew Sheldon We might reasonably expect the IMF to be independent...but sadly their role seems to be compromised by their need for OECD country funding

October 11 at 9:08pm · Like

Andrew Sheldon IMF says very little whilst 9 of 24(?) OECD countries have debts over 100% of GDP.

October 11 at 9:08pm · Like

Don Brash Not really fair Andrew. I've read plenty of IMF Papers which are highly critical of the enormous debts of many OECD countries.

October 11 at 9:19pm · Like

ADDENDUM: So does this reflect on the media’s lack of interest in bad news? Why might that be the case? It was very years ago to find a journalist offering critical views on the economic outlook. One of the few was Max Walsh, Editor-in-Chief of The Bulletin (Australia). Is the editorial content of the media skewed towards good economic news…even though there was a lot of critical economic analysis around from 2005-2008 outside of the mainstream media.

Andrew Sheldon

True, sovereignty lies with national govt...so what about central bank governors...what stops them from being more critical of foreign central banks and govts? They are independent from govt supposedly, so no embarrassment...just political integrity issue. i.e. Would Simon Power get a job with Westpac if he had an unfavourable Commerce Dept policy towards the banks....well, I know the answer because bank fees are a form of extortion...the basis of a class action in Australia as we speak.

October 11 at 9:46pm · Like

Don Brash Andrew, you are certainly right that central bank governors are reluctant to criticise other central bank governors. But who would you like Alan Bollard to criticise at the moment if you had your way?

October 14 at 9:20am · Like

Andrew Sheldon Ben Bernacke, ECB gov, all govts for adopting regulation which distorts rather than protects; for sanctioning extortion or 'numbers' rather rationality as the basis of political discourse.

October 14 at 9:49am · Like

Don Brash

Not sure that I understand your argument Andrew. To the extent that central banks are preoccupied with maintaining the value (purchasing power) of their own currency, I would have thought that most developed country central banks are doing OK at the moment (as measured by inflation, which is the only basis for assessing whether purchasing power is being maintained).

I share your concern that banking regulation may have actually contributed to some of the banking system problems, but central banks are certainly not the only ones (or even the main ones) to blame for the problems in the banking sector. In the US, for example, a lot of banking system problems stem from political pressures since at least the early nineties for banks to make loans to uncreditworthy, and marginally creditworthy, borrowers.

October 15 at 7:32am · Like

ADDENDUM 1: Actually, governments have a monopoly over the initiation of force. It was the Clinton administration who deregulated the banks in the USA; thus we ought to blame there for facilitating the actions of banks, which was largely acting ‘legally’ despite a few exceptions.

ADDENDUM 2: Actually, governments should be preserving a stable or fixed amount of currency relative to growth so that purchasing power actually increases. i.e. The amount of their wealth increases whilst the value of goods remains stable. We currently have ‘flat’ or ‘non-trending’ asset prices, no income growth, and rising product prices. i.e. We have inflation, i.e. Erosion of the real value of goods. It will not readily show up because govt masks the impact of the more volatile factors, i.e. rent, fuel, food,; arguing that they are too volatile to measure. True, but in the long run, they should not be ignored.

How can you be sure of that? How do you measure economic activity efficiently?

Andrew Sheldon

If central banks were duly concerned with preserving - or better still increasing purchasing power (as we live to progress I believe) - they would take measures which achieved maximum, but sustainable growth. Notwithstanding the fact they are confined to monetary policy, as an independent agency, there is no reason they cannot have an opinion on fiscal policy, and offer another element of accountability. Rather than debase their currencies, the US central bank lowered rates to extraordinarily low levels, govts like Aust subsidised great, Fannie Mae was instructed to offer the poor loans, creating a great deal of debt, and only in the last 3 years have we seen debasement of debt with quantitative easing...but there is more to come...causing more inflation. It’s about pushing the trauma into the future. If govt would only stop distorting the economy, each would be able to achieve growth of 8-12%...not the 1-3% we are accustomed to. The idea that we can only grow at these miniscule rates is because of govt...look at the Maritime Transport Act..calls to update it in 1998...its now 2011. It will happen now immediately after the election. Meantime priority 'distractions' for govt - aside from earthquake - rugby, seabed issue. One gets the notion, govt is about putting out fires, placing defensive.

October 15 at 8:13am · Like

Andrew Sheldon

Ultimately, I blame govt for being politicians rather than statesmen. They live within the system, lacking the ideas to change it. The problem is not the central banks per se its the govt which sanctions everything they do...its the idea that people really have any influence; that we have participation, choice?? We don't. We have a pretence of choice. We have a pretense of rationality within parliamentary debate...when really its a 'numbers' extortion game legitimatised by 'participation'. Tell me what participation I had in any piece of legislation. If I make a submission, what option do I have to hear criticism of my submission? None. How am I to know if it’s been read? Can't. There is a short range agenda to stay in power which means 'slow change' rather than selling ideas because our elected MPs have not developed a coherent philosophy before entering politics. I'd actually say you are better than most. But when or if you get substantive influence, you will become inaccessible, and centralised govt and universal suffrage will ensure you are motivated by the wrong priorities. You will become like the NP and Labour - 'constrained' by the system. Banks are custodians...they are not acting in accordance with their fiduciary duties; though you are right, govt requires no compliance from them. Another problem is the unconditional expropriation of wealth by taxation. Unless a voter has the right to renounce their sanction of govt by withholding tax, they are slaves. Representative democracy is slavery; we need a meritocracy where reason is the standard of value.

October 15 at 8:24am · Like

Don Brash

Andrew, I'm afraid I don't have time (and I'm not even in Parliament yet!) to reply to all your arguments. But let me just, in defence of my fellow central bankers, say that central bankers should not be increasing the purchasing power of their currencies (that would mean steadily average falling prices, or deflation). If money is to be used as a store of value, and as a measuring rod, it is important that it neither decreases in value (as with inflation) or increases in value (as with deflation). Most central bankers acknowledge that the only way in which they can help economic growth is by keeping the value of money stable, so that consumers and producers can use the price mechanism to inform their decisions. You obviously fear that successive rounds of quantitative easing will cause inflation. Yes, it may do, but it certainly hasn't done yet, and I strongly expect those central banks which have undertaken quantitative easing to reverse that process at the first sign of inflation.

ADDENDUM: Whose fault is that Don. You joined the ACT Party just 2 months ago, and his is the only opportunity I get to talk to you, and when the questions turn a little hairy, you evade them. That is govt; you don’t need to be a parliamentarian…you think like one merely as a candidate. You are over-qualified…that is the problem.

October 15 at 2:14pm · Like

Andrew Sheldon

Don, there is nothing inherently bad about increasing purchasing power; that is wealth creation. Yes, you can match the growth in money supply to productivity to stabilise prices, but that is not what the Fed Reserve has been doing. It has been stimulating debt levels with unsustainable low rates of interest....now there is a great deal of defaults, so debasement or recapitalisation is necessary to avoid default of that debts, say in USA, EU, etc. Mass transfer of wealth (via extortion). The poor suffer the most. Measures of inflation are entirely selective and arbitrary...just look at MS growth over productivity or economic growth.....to that you say, QE 'might cause inflation'? Ask yourself why QE is necessary at all? Why did asset prices rise so high? And how inflation is avoidable? Inflation will inevitably cause debt defaults among those not propped up. You seem to think there is no causal relationship between MS and productive capacity? It is true strong wealth creation in China and the developing world is offsetting OECD antics...but the relative distribution of capacity is going to create a productivity gap.

October 15 at 4:10pm · Like

Andrew Sheldon Don, the evidence does seem to suggest inflation ahead...this at a time of subdued confidence. Read this inflation news from the UK, and I've seen similar from Australia....

ADDENDUM: Don seems to have stopped talking to me; so because he is focused on getting higher profile attention, I thought I’d bring this to the attention of the media, because they love a controversy.

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