Club Troppo

We are all in Tom Watson’s debt for pursuing the corruption of the Murdoch press as vigorously as he has – and continues to. I have had some dealings with Tom arising from my involvement in the Government 2.0 Taskforce. In any event, in addition to continuing his pursuit of the Murdoch press he has just been caught up in a strange set of events. His intern, it seems took to his Twitter account when he was in a meeting and tweeted something which mentioned rape. If you mention rape this stirs up trouble.  And what the hell was she doing on his Twitter account? Who knows, but it was a very stupid thing to do, which she very quickly admitted on Twitter.

This caused the predictable avalanche of nonsense in the media. Tom acted pretty kindly, didn’t sack the silly idiot who had tweeted on his account, and then published this account. It ends in these propositions.

8. The intern has not been sacked nor was she ever going to be. She’s young. We all make mistakes.
9. I know her well enough to know she’ll never do this sort of thing again.
10. And yes, I know I should have logged out. I really do. Thank you to the people who pointed that out.
11. For those that have asked – all my tweets, other than the two this morning, are my own.
12. Though my account wasn’t technically ‘hacked’, yes, I do understand the irony of what happened.
13. Once again, I am sorry.

Now the British are different to us.  They’re more sticklers for form. So if Tom wants to apologise, then technically yes, the buck stops with him. He runs the office and ‘takes responsibility’ for what happens.

But beyond that?  He’s in his own office and I don’t agree that he ‘really should’ have assumed that one of his staff would hijack his online ID, even for a joke, just as he shouldn’t assume that she would forge his signature, or (for that matter) video a visiting guest on the dunny. As for ‘irony’ – Tom’s role as a minister in the Blair Government was to promote these online tools and train others in them. Well OK, admit the irony, but strictly speaking there’s not much irony. Someone stuffed up.

I can’t help thinking that a right leaning politician wouldn’t be bowing and scraping. Enough of the apologies Tom. Leave them to Rupert Murdoch – even if he doesn’t mean them.

British Leyland devoured billions pounds of taxpayer’s money before it was finally broken up and sold off. According to New York Times journalist Nelson Schwartz the Thatcher government’s bailout "remains the classic example of a futile government intervention."

Mrs Thatcher was unable to resist the car maker’s insatiable demands for cash. According to Schwartz, her government ended up handing over £3.6 billion (£11 billion adjusted for inflation) to keep the factories open. "On any rational commercial judgment, there were no good reasons for continuing to fund British Leyland", she concedes in her autobiography. The company was a high cost, low volume manufacturer in a world where low costs and high volumes were essential for success. So why did she do it? The "political realities had to be faced", she says, "BL had to be supported":

I knew that closure of the volume car business, with all that would mean for the West Midlands and the Oxford area, would not be politically acceptable to the Cabinet of the Party, at least in the short term. It would also be a huge cost to the Exchequer — perhaps not very different to the sort of sums BL was now seeking (p 120).

As political scientist Fiona McGillivray explains, no government could afford to allow British Leyland’s huge plant in Longbridge to close:

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“Oh, my goodness, the John Birch Society! … Is that bad? I have a lot of friends in the John Birch Society" (Texas congressman Ron Paul).

In Tuesday’s Sydney Morning Herald, Tom Switzer describes presidential hopeful Ron Paul as a socially tolerant free-market crusader whose views on foreign policy are indistinguishable from the views of those on the radical left. Not everyone who knows Paul’s record would agree.

On Switzer’s account, Paul is a "true fiscal conservative" and "prophet" who wants to call an end to America’s costly military overreach:

Paul’s most endearing quality is that he has sincere beliefs – support for social tolerance, free-market capitalism, and a healthy scepticism of foreign military adventurism – and he is not afraid to yell them out. That sets him apart from the pack in this age of focus groups and media spin.

But in the New Republic, Will Wilkinson expresses a strikingly different view: "If you were an evil genius determined to promote the idea that libertarianism is a morally dubious ideology of privilege poorly disguised as a doctrine of liberation, you’d be hard pressed to improve on Ron Paul."

(Continued)

"Capitalism made America great – free markets, innovation, hard work – the building blocks of the American Dream. But in the wrong hands some of those dreams can turn into nightmares."

‘When Mitt Romney Came to Town’

Promoted by Winning Our Future, a pro-Gingrich super PAC, ‘When Mitt Romney Came to Town‘ features a series of poignant interviews with workers who lost their jobs, houses and health insurance coverage when the businesses they worked for were restructured or went under.

This misleading video illustrates what’s wrong with American conservatism today — an unwillingness to talk honestly about how free markets drive technological change and generate wealth. The economist Joseph Schumpeter called it ‘creative destruction’. Economies grow as new technologies replace older ones and industries and jobs move to where work can be done most efficiently. As W. Michael Cox and Richard Alm write:

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Mitt Romney takes a tough line on welfare. In 2008 Republicans cheered when he said that America’s culture was threatened by welfare payments to poor people. Asked how tax reform plan would help Americans on low incomes he said his plan was "primarily based on trying to create jobs, not handing out cash to individuals."

But while Romney opposes cash handouts to individuals, he seems relaxed about cash handouts to business. In the early 1990s his private equity firm Bain Capital helped finance a company called Steel Dynamics. According to a report in the Los Angeles Times:

Bain Capital began looking at investing in the steel start-up in late 1993. At the time, Steel Dynamics was weighing where to locate its first plant, based in part on which region offered the best tax incentives. In June 1994, Bain put $18.2 million into Steel Dynamics, making it the largest domestic equity holder. It sold its stake five years later for $104 million, a return of more than $85 million.

As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.

"I’m very pro-business, but I’m not pro-business-welfare," said DeKalb County resident Suzanne Beaman, 58, who fought the incentives. Steel Dynamics "would have done fine without our tax dollars, I have no doubt."

Another steel company in which Bain invested, GS Industries, went bankrupt in 2001, causing more than 700 workers to lose their jobs, health insurance and a part of their pensions. Before going under, the company paid large dividends to Bain partners and expanded its Kansas City plant with the help of tax subsidies. It also sought a $50-million federal loan guarantee.

Is this what Romney meant when he spoke about providing "incentives to help companies to be creating new jobs"?

(Continued)

At the Economist’s Democracy in America blog, Erica Grieder suspects that "the biggest untapped constituency is people who are fiscally conservative and socially moderate or liberal." Grieder links to a post by former Cato research fellow Will Wilkinson where he explains why he is not a libertarian:

Here are some not-standardly-libertarian things I believe: Non-coercion fails to capture all, maybe even most, of what it means to be free. Taxation is often necessary and legitimate. The modern nation-state has been, on the whole, good for humanity. (See Steven Pinker’s new book.) Democracy is about as good as it gets. The institutions of modern capitalism are contingent arrangements that cannot be justified by an appeal to the value of liberty construed as non-interference. The specification of the legal rights that structure real-world markets have profound distributive consequences, and those are far from irrelevant to the justification of those rights. I could go on.

Wilkinson now identifies as a liberal. He writes: "I am interested in what it means to be free, and the role of freedom in flourishing or meaningful or valuable lives."

In the US, no major political party or movement stands for this kind of liberalism. The same is true in Australia. According to Greg Barns: "The Liberal Party, in the Howard and Abbott incarnation, is a socially conservative force which also believes that the state should play a paternalist role in steering the economic direction of the nation." Oddly, the most enthusiastic supporter of "the the role of freedom in flourishing or meaningful or valuable lives" seems to be the Australian Treasury.

Judith Sloan wants the term banned, the editors of the Australian think it’s bureaucratic gibberish and even the new minister for social inclusion seems unsure about what it means. So what is social inclusion?

For the New Labour politicians who popularised the term social exclusion in the UK, the excluded are those whose behaviour makes them a burden on other citizens and the state. Social inclusion is about helping the excluded become contributing members of the community.

Early in his first term, Tony Blair began using the term as a synonym for underclass. Social inclusion policies aim to change behaviour rather than redistribute resources. This makes it possible for left-of-centre politicians to attack entrenched disadvantage while at the same time promising not to increase taxes.

So as Norwegian academic Else Øyen explains : "neither social exclusion, nor social inclusion, are analytical concepts. They are political concepts, and they have been introduced for political reasons." The key to understanding the terms social exclusion and social inclusion is to look at the problems politicians are using these terms to solve. Reading documents by academics and bureaucrats only leads to confusion.

(Continued)

I posted a while back about my pet theory that the South of the US was a psychotic society, which psychosis was brought about by the politics which arose in a slave society.

Anyway, I just came upon this article which looks interesting, and in the same vein.

Slaves as capital investment in the Dutch Cape Colony, 1652-1795
Johan Fourie (Department of Economics, University of Stellenbosch)

http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers149&r=his

The Cape Colony of the eighteenth century was one of the most prosperous regions in the world. This paper shows that Cape farmers prospered, on average, because of the economies of scale and scope achieved through slavery. Slaves allowed farmers to specialise in agricultural products that were in high demand from the passing ships – notably, wheat, wine and meat – and the by-products from these products, such as tallow, skins, soap and candles. In exchange, farmers could import cheap manufactured products from Europe and the East. Secondly, the paper investigates why the relative affluence of the early settlers did not evolve into a high growth trajectory. The use of slaves as a substitute for wage labour or other capital investments allowed farmers to prosper, but it also resulted in severe inequality. It was this high inequality that drove the growth-debilitating institutions posited by Engerman and Sokoloff (2000). The immigration of Europeans was discouraged after 1717, and again during the middle of the century, while education was limited to the wealthy. Factor endowments interacted with institutions to create a highly unequal early South African society, with long-term development consequences.

As Theodore Roosevelt finished his address to the people of Osawatomie his speechwriter leaped up and cried: "Citizens of Kansas, you have just listened to one of the greatest pronouncements made by any man. Its effect will be felt in the nation and the world for years to come." Last week President Obama turned up in Osawatomie to deliver a speech that harked back to that 1910 address. So it may be the speechwriter was right.

Roosevelt’s Osawatomie speech was the most radical of his career. According to historian Robert La Forte, Roosevelt let Gifford Pinchot write it and "Pinchot, even more of an extremist than Roosevelt in upholding strong governmental control over individual activities, tinted the address with radicalism far in excess of what Roosevelt would probably have done alone."

Roosevelt argued for equality of opportunity and the destruction of privilege. He insisted that the "conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress." He explained:

We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.

According to psychologist Jonathan Haidt: "The psychological meaning of fairness is proportionality. Human beings have been engaging in cooperative enterprises for hundreds of thousands of years, and we’re now vigilant for signs that anyone is taking out more than they’re putting in." And this was the sentiment President Obama hoped to tap when he arrived in Osawatomie, Kansas to deliver his most radical speech yet.

(Continued)

I was sent the following analysis of the NZ election yesterday.  I was sent it by someone I know, but I can’t possibly tell you who it was (or I’d have to kill you). Moreover the person who sent this to me, did not identify the person who sent it to him. I think that’s because he or she is a public servant and he or she can’t be bothered with the hassle of having publicly expressed views. Which is all fair enough. In any event this is the analysis, which I found of some interest.

You inquired about Don Brash and the ACT party in the recent NZ elections.

It’s a terrible result for the ACT.

·         They retained the leafy Auckland seat of Epsom, but with a reduced margin, and with the victor being a conservative named John Banks.

·         They only got 1% of the party vote: their worst ever result, which means that they don’t get any ‘party-list’ parliamentarians to sit alongside John Banks.

·         Don Brash has quit as leader – John Banks will presumably step into that role.

I’m no expert, but here’s my take as to why it happened.

·         Minor parties lose votes after being in government:

o   The three minor parties in the coalition each lost votes.

§  Being in government disappoints idealists – they liked the ACT when it railed against government excess, but didn’t like the party once it failed to change the world and it (mis)used taxpayer funds (eg travel rort claims against former leader Rodney Hide).

o   Those who like the government seem to reward the major party in the coalition: the Nationals have risen from 58 to 60 seats.

§  Don Brash tried to campaign on the ACT record in government, but perhaps people didn’t associate the reforms with the ACT, or perhaps they weren’t popular reforms (eg easing unfair dismissal laws).

§  He tried to campaign on what the ACT would do in a future coalition government, but if they couldn’t get those reforms up last time why expect it the next time.

·         Parties like the ACT are particularly vulnerable to disintegration.

o   Those who are principled/dogmatic enough to want freedom in all spheres of life are few.

o   So parties like the ACT try to attract the more populous hippies (who want drugs to be legalised, and social services) and rednecks (who want wars on drugs, and tax cuts).  But this leads to:

§  constant attacks from the NZ Greens for the hippy vote and from NZ First for the redneck vote (both parties seem to have stolen votes from the ACT); and

§  disunity and splintering (there was public disagreement between Don Brash and John Banks on marijuana decriminalisation, and leaked conversations about the ACT leadership between Banks and John Key).

o   The same thinking could be applied to think-tanks like the IPA.