Saturday, February 28, 2009

Regulatory reform with eucalyptus

At present sellers of whiteware are required to display prominently (read ruin the look of the appliance) a “sticker” showing estimated energy and water consumption of the machine and a declaration about whether some person believes these levels to be efficient or otherwise. This piece of “disclosure” is mandatory.

As with most things you have to force people to do  by regulation, not all consumers want this regulatory enlightenment forming part of the decor of their kitchen on a perpetual basis. Removing it is something else – though the vendors handily advise buying, for a modest sum, yet another product which may remove the sticker and it’s glue. The vendor is of course not allowed to provide removable stickers because they might be – well, removed.

Soak a small cloth in eucalyptus oil, rub thoroughly over offending stickers and allow to soak in. Wipe of with cloth. Minor assistance with blunt knife may be necessary to commence requisite peeling of sticker.

Ensure windows are open lest eucalyptus smell causes breach in  drug ingestion regulations.

If in doubt ensure a counsellor is present during operation.

Friday, February 27, 2009

Will brains survive?

The currently popular question "will capitalism survive"  is starting to seriously annoy me. It seems to me that a necessary and sufficient condition for capitalism not to survive is for people to stop trading - utterly and completely. If that was to happen then opportunity cost would have been banished.... that requires that resources of all types everywhere for all times become infinite - so it is clearly nonsense.

I suppose capitalism no longer exists for the dinosaur due to the fact that there are no dinosaurs - at least of the reptilian variety. For the rest - its just arguments about a matter of degree..... this University Bookshelf approach where wise men look along the shelf, select a work by a favoured for the moment philosopher and drag it down as an instantly implementable template for society was - I thought - left in the lecture hall of some 101 class.

Evidently not…

Thursday, February 26, 2009

“Cute” statements hide "must accept" truth

Show host Mark Sainsbury delighted tonight in repeatedly asking (re the potential loss of jobs at a lower North Island clothing factory via loss of an NZ Army contract the day before the “Job Summit”) “What’s the point of a job summit when we can’t save a few jobs making things for our own army?”

Good point? Doubt it….  one thing we should hope the Job Summit hammers into people’s heads is that if there are to be “new jobs” it is essential to see that we will also lose “old jobs”. Painful and difficult but crucially true. A redistribution of resources to create the new profitability and productivity which will generate new jobs inevitably comes at the loss of some existing jobs.

The trick of course is to create more “new” than we lose “old”.

The other challenge is to make the transition as painless as possible through effective social policy which creates incentives not dependency.

Ironically, Sainsbury finished his show with a success story – of a young aspirant getting a job offer in the service industry – in Wendy’s fast food restaurant . The guy jumped at the opportunity – and that is a key word – opportunity.

Safari 4.0 beta… is out and excellent

Latest upgrade to the fast, efficient and clean Safari 3 from Apple, the Safari 4.0 beta is now out. Noticeable improvements (to my  with the bonnet shuteyes) include easier tabbed browsing (more like Firefox), cleaner simpler lines – though not as pared back as Chrome and an “aero like” history screen.

there is “cover flow” – as found in the iPod touch and iPhone to browse bookmarks – and speed – certainly faster than anything you are currently using (maybe Opera is a tad quicker?)

Various other enhancements as well. Beta it is but it hasn’t crashed yet though a couple of sites aren’t rendered perfectly.

DOWNLOAD

Wednesday, February 25, 2009

Yep…. pretty much as taxing

As suspected, from Prof Sinclair Davidson’s 2005 study……

In 2004-05, the top 2.58 percent of taxpayers paid 24.07 percent of personal income tax. This is 9.33 times more in tax than their population share. Various studies show that between 40 and 60 percent of households receive more in government benefits than they pay in tax.

The US number refers to all tax while the NZ number is for income tax only. Adding in tax outside of income for NZ would skew the numbers further in the direction of the US.

Hard to believe but true…

Russ Roberts at Cafe Hayek tells us that, at present in the US.:

The top 1% of all taxpayers currently pay about 40% of the income taxes.

This level of wealth distribution is staggering. The level is not I think, quite so skewed in NZ but is, like the US way out of whack.

The trouble with Gauss

The following paper accessible HERE provides simple insights into a couple of technical issues which led to credit crunch problems… great explanations everyone should ponder.

Tuesday, February 24, 2009

The natural inclination

Here, from the great mind of Murray Rothbard, is a timely reminder any New Zealander ought to recognise… and be wary of as we try to devise ways “out” of the impending recession:

Is there traffic congestion? Ban all cars! Water shortage? Drink less water! Postal deficit? Cut mail deliveries to one a day! Crime in urban areas? Impose curfews! No private supplier could long stay in business if he thus reacted to the wishes of customers. But when government is the supplier, instead of being guided by what the customer wants, it directs him to do with less or do without. While the motto of private enterprise is "the customer is always right," the slogan of government is "the public be damned!"

The processes of innovation, price setting and slavishly trying to give consumers what they want achieve all of these outcomes – if we let them.

Not a time for “swingers”

While it is relatively rare for me to agree with Jeffrey Sachs he has a point in a recent piece – and plenty of others are chiming in – when he says that stable, credible medium to long term policies are what we ought to be pursuing in any interventions to deal with recessionary conditions.

I have made this point as well in discussing confidence. Wild swings are not helpful in restoring confidence for at least two reasons. First they appear to attest to the absolute mess you were making before – which might or might not be the case. Second they generate expectations and fears about what the next swinger might look like and third they lend weight to the growing suspicion that all this might be just a shade ad hoc – which of course it is.

Dull is currently good. Silence may be close to golden. No amount of blathering about “extraordinary times” justifies joining the global swingers club right now.

Monday, February 23, 2009

Regulation by trusty trustee

Probably the most annoying thing about regulation is its ability to raise false hope coupled with a ubiquitous inability to deliver on its promise. Nowhere is this more apparent than with that punctured condom the Trustee arrangements in NZ.

Long experienced banker turned sharebroker and financial advisor Chris Lee  pointed out on National Radio this morning that amongst all the failures of finance companies over the past two years one would look utterly and completely in vain to find one investor protected or “saved” by a trustee.

Such efforts as have been successful have come from:

- receivers,
- managers and owners, and,
- possibly auditors.

Further it has been receivers and regulatory agencies who have turned up related party transactions, misleading disclosures, and highlighted the dense legalese few investors have a chance of understanding  – all  approved at some point by trustee companies.

Incredibly, investors pay these institutions (involuntarily – the law is totally coercive on this) to “monitor” their investments and ensure their safety. Performance in this regard speaks for itself.

Incredibly there is no accountability for their performance in this regard – short of  the Courts - to date untested largely because of the expense and high chance of failure given the breadth of the trustee mandate.

The acid test is whether investors would pay for the pontificating (for there is not the vaguest sign of remorse)   without  the performance. But for the law it is doubtful in the extreme.

Too harsh? Well yes in that it has been trustees who have, too late, tipped failed and failing companies into the hands of receivers which has sometimes helped investors… and possibly served the useful purpose of demonstrating to investors that trustee arrangements are incapable of preventing losses – at least as currently organised.

The pious tell us that a critical first step to recovery is to face reality with complete honesty. In explaining what regulation of capital markets can and cannot do it is clear who should be leading the way.

Getting it backwards

“We need to reduce the debt. If you jumpstart credit, you are just going to prolong the problem and deepen it. What we need now is the patience to de-lever. We don't need the stimulus package. We need a savings package, but that couldn't be further from the goals at the moment. The mistake is that the government believes credit drives the economy, instead of the economy driving credit. They have got that backward, and this is a very dangerous time to be misfiring.”

Robert Albertson interviewed in Barron's

Sunday, February 22, 2009

Fact, Fantasy, Aspiration and Reality

This piece of “junk mail” is such a masterful weaving of fact and fantasy that I couldn’t resist reading it…. worse I began to wonder just how far off some people’s “reality” it has become…. alarmingly close I fear:

“To buy a degree is quite easy these days. Nevertheless most students just sit around in their usually boring local University classes, wasting money. Why would you do that? These days buying a degree is a matter of personal motivation. But why should you buy a degree? The main reason is the fact that buying a degree on1ine is going to save you time, a lot of time. Usually you have to verify your life experience and you instantly qualify. Even though that is not the main cause why people are buying life experience degree.

The actual reason why people buy a life experience degree is because they can not go to a institution in their surrounding area that offers the diploma program they are heading for: For example, if you live near a College which only offers renowned marketing degree, then this doesn't help you a bit if you're looking for a marketing degree. To attend classes you might have to travel long distances. Then it might be that the degree that you want is only offered by a institution which costs a fortune. So you have to leave your place, look for accommodation in the University's place and do all the other stuff involved costing you tons of cheeze.

If you buy a degree by verifying your life experience or work experience, you can find the right degree for you without ever having to leave your workplace and instead get all the documents like the diploma certificate with the University's legal verification and official seal certifying the degree chosen, the transcript, a cover letter, copies of the College's or University's official certificate of accreditation, the institutions postal prospectus approval and a few important things more.

Having a University degree is very important these days, and as always in life you should only stick with something you want.

Beware choosing to be something just because it was the only good degree your local institution offered. After all, you are only going to be good at your job if you like to do it. Thus, you have to get a degree that means something to

you. This used to be a task that could take you years.

Buying a degree is nothing harmful. It's a win-win situation for the Colleges involved as well as for you, getting the degree you dreamed of.Give us a call if you are interested to buy a degree from an University!

If you are interested to obtain your own degree, please give us a call at…”

Nostalgic Free Lunches by Rail

Chris Laidlaw – N.Z.’s “renaissance man” - managed to run a fairly balanced 45 minute panel interview this morning on the whys and wherefores of rail transport for freight and people. Lamentably however there was very little focus on getting the pricing right for the free lunch which is “take all you can grab” roading service in N.Z.

While other countries – notably Singapore and urban areas such as CBD London have deployed congestion pricing and charging in ever more sophisticated ways to attack directly the cause of less than optimal consumer decision making we appear to be still predicating our thinking around the notion that roads are “free” and that “making” rail work with as much subsidised capital and operating cost as it takes is the best means for proceeding.

Recent openings of some toll roads holds out promise. The prospect of the state being impoverished enough as to need Public Private Partnerships also suggests hope. Becoming a taxpayer “foamer” over nostalgic views of rail rather than commercially realistic ones does not.

Most remarkable statistic to emerge – average flights out of Auckland to NZ destinations (potentially reachable by rail) per day 147. Number of trains 1.

Saturday, February 21, 2009

John Key and the Edge of Reason

We can disagree with IMF Chief Economist Oliver Blanchard on a number of things - what is untouchable though is his view that the greatest thing missing in the current climate is certainty.  A major problem with political attempts to "do something" - the fatal temptation and conceit of all politicians is that the something always increases uncertainty - for at least two reasons....

First when governments intervene the rules change and always in unpredictable ways. No one is quite sure what will happen.

Second people react to the unpredictable changes in unpredictable ways.

Saying "we must consider all options" does not let anyone off the hook. It may sound like the much vaunted "common sense" but it creates uncommon uncertainty - and if you follow it up with unspecified offers of non specific "help" which might run from being a guarantor to becoming an equity investor plus everything in between the amount of uncertainty generated has to be colossal.

A better form of uncertainty is silence.......

Wednesday, February 18, 2009

Rooting for the environment....

Back in the dark days of the failed arguments of the past some of us thought the entire notion of having a government department as an "advocate" of the environment was fundamentally flawed.  The notion of any agency of state with (by definition) coercive powers acting as some kind of lawyer advocate (without compliance with the lawyers code of practice or registration etc) was essentially unsound. In a Westminster democracy, obviously bollocks.

Clearly we lost to the furry things and their anthropomorphic friends.

Now - BM - we find horror in the Nat Rad classes that these advocate guys are doing deals with power generators. What did you all expect - it's rational, its advocate behaviour, it's common (so the DoC staff tell us) and it's their job. All that goes with it is too - secrecy, stealth - the whole 9 yards. And you whingers who argued for it in the first place have all sorts of complaints about high country leases, forests, trees etc.... but you built the babe.

Sir Humphrey might not have got objectivity right all the time - nay even a decent majority of the time - but he knew where he was supposed to be headed.... and even our state agencies had a crack at objectivity.

Which at least allowed the Courts to work.....

The Experimental Philosophy

Henry Hazlitt's great "Economics in One Lesson" (from which comes the parable of the broken window) stressed looking behind the obvious to second round effects and further.

Here, taking a leaf from the Austrian economists, experimental propositions are advanced so that ideas can emerge - at a whim rather than via lengthy considered and infrequently published mental toil.

This blog supplements my webpage.