Idiocy of the Day

Those genii at GetUp have decided to stage a protest against the laws of supply and demand:

Prosper Australia, a little-known group which supports tax reform on land, has ignited a small but growing online push calling for a "buyers' strike" to protest against the high cost of housing. 

“I undertake not to bid at auction or negotiate by private treaty to buy real estate until prices moderate, just as they have in all the countries we compare ourselves to,” the Prosper pledge states on its website.

What's next, a protest against gravity? And whom, precisely, are they protesting against?

Theses idiots are protesting against the outcome (high property prices) without protesting against the cause, which is government regulation.

Why aren't they protesting against the hundreds of millions of dollars in subsidies to first home owners that have been poured into the housing market by successive Australian governments? These policies, aimed at promoting housing affordability, have instead been the single greatest cause of the reduction in housing afforability even seen in Australia.

Why aren't they protesting against state goverments for restricting the supply of new houses through draconian planning laws? What about the tax laws which incentivise investment in property and penalise other forms of savings and investment?  What about protesting against the RBA, who set interest rates instead of allowing supply and demand to set the cost of borrowing and the return on saving?

These are the real causes of the property bubble in Australia. And don't get me wrong, a bubble it is. A bubble that is going to end very, very badly for property owners and for the Australian economy as a whole.

Something for Nothing...

Speak to any leftist for any length of time, and you'll surely come across concept of the necessity for some good or service to be provided "free" to some segment of the population. 

Dig a little deeper, and you'll probably make a remarkable discovery; the aforementioned speaker actually believes that it is indeed free, as if resources somehow fell from the sky as if manna from heaven. 

If there is one immutable law of economics it is this: Nothing is free. Not Ever. Somewhere, someone pays for it.

What the collectivist is actually saying is that they want a good or service to be paid for entirely through tax receipts, where the end recipient of the good or service bears no individual cost per unit consumed.

The great French economist Frederic Bastiat said it best when he said: 

Government is that great fiction through which everybody endeavors to live at the expense of everyone else. 

Not only is the acclamation of "free" healthcare or "free" education completely misleading, it is actually almost exactly wrong. Services provided by the government, far from being free, are actually much more expensive than comparable services produced by the private sector.

This clip from Thomas Sowell sums it up rather nicely... 

If you only watch one video about the causes of the GFC....

....watch this one. And it was recorded in 2006.

Taxpayer Funded Religious Indoctrination

This is a disgrace.

THE Victorian Education Department is forcing public primary schools to run Christian education classes taught by volunteers, angering parents and schools that do not want to host them. 

An email exchange, obtained by the Sunday Age, reveals the department told one parent that his school ''must'' keep its Christian religious instructor whether it wanted to or not. 

A number of Melbourne primary schools have questioned whether students should be taught about Christianity. But the department and Christian religious education provider Access Ministries says they have no choice.

That's right. I, as a taxpayer, am forced to fund the teaching of bronze-age superstition to public school students. Believe whatever you want, teach your kids whatever you want at home, but don't you fcking dare force this into public schools at the expense of a lesson about maths, English or science.

This makes my blood boil. If I lived in society that actually valued individual rights and had a Constitution predicated on their protection (like the US, this would be thrown out on the grounds of it being a clear violation of the separation between church and state in about 10 seconds. Alas, I live in Australian, with no Bill of Rights and a Constitution about as strong as a Kennedy's willpower at an open bar.

Here is a link to the Humanist Society website that has been setup to fight this insanity.

The Broken Window Fallacy

Of all the idiocy that passes for economic commentary in today's media, few things bug me more than the perennial assertions that natural disasters can act as a fillip for economic activity through forcing resources to be allocated to reconstruction efforts. Here's an example from the Financial Times.

In the longer term, the earthquake is certain to force heavy spending on construction and public works in the affected region....

By forcing households and businesses to dip into their savings to finance reconstruction, the disaster is likely to support economic growth in the later months of this year. 

Japan’s construction sector has been badly squeezed by efforts by the ruling Democratic party to shift spending “from concrete to people”, cutting public works budgets in favour of child allowances and more generous welfare. Much concrete will now be needed in the northeastern prefectures, providing a boost to hard-pressed contractors.

We've heard similar comments recently about the floods in Queensland and the destruction caused by cyclone Yasi. Commentators always fall for what is referred to as "The Broken Window Fallacy". 

The Broken Window Fallacy goes a little like this; if you break a window, you have to allocate some resources to get it fixed. Someone has to buy the necessary supplies and then exert time and effort to make a new window, someone else has to install it (creating jobs!!), and the income they receive from this is then spent on something else, which in turn triggers a Keynesian pattern of spending and re-spending which increases activity throughout the whole economy. 

What's the flaw with this logic? Well, it just doesn't make any sense. It looks at the activity that they can see (the new window), but ignores the activity that would have been generated had those resources been allocated elsewhere. If I didn't have to waste my resources to purchase the new window, I could have bought more capital equipment, or gone out for dinner, or participated in any other activity, all of which would have generated more utility to me than wasting it on fixing something had it never been broken. 

You see the same fallacy come up when discussing the jobs that government "creates". Governments cannot create jobs; they only destroy them. Every job that government "creates", it does so by forcibly taking resources from the private sector, destroying efficient jobs driven by real market demand, and reallocating them to whatever government program that politicians or the special interest groups that support them want. John Stossel recently had a segment on this concept relating to Obama's green job's initiatives. 

At the end of the day, natural disasters destroy resources; they destroy capital equipment, and they force huge re-allocations in future spending patterns to recreate the stores of capital that used to exist anyway. This is a disaster for any economy.  

Morality and Capitalism

He might have passed away four years ago, but I can never get sick of re-watching the old Friedman clips. So intelligent and so eloquent. 

By way of introduction...

In this, the inaugural post on my obscure corner of cyber-space, I guess I should take a minute to explain why I should bother. Alas, after materially less than a minute of thought, I am utterly convinced that I shouldn't. You see, the longer the time that I spend on this Earth, the less respect that I have for the majority of its inhabitants. In a time when the individual, through technology, can accomplish more than our forefathers would (or indeed could) have dreamed of, society itself has decayed into collectivisation and stagnation.

We live in an age where we can have many thousands of great works of literature accessible at the click of a button, and yet most people don't read anything beyond that required to go about their daily lives. The government controls over 40% of all economic activity in the country, and dictates everything (in Australia, at least) from what speech is allowable, to who should have the ability to marry, to what drugs I can consume, to how I invest my own savings for my own retirement, to even (if the current government has its way) what websites I can read.

The government can fine me for deciding that no candidate represents my values and I therefore do not wish to vote; for not wearing a helmet when I ride a bike or a seatbelt when I drive a car, or even for failing to purchase health insurance.

The government has robbed people of their personable responsibility as well as their liberty, and in doing so has created a society that embraces mediocrity, scorns success and risk taking, and encourages a sense of entitlement whereby people believe that the rest of society is responsible for providing for every facet of their welfare. Our society is decaying; the vibrancy and dynamicism of free-thinking and risk-taking which is the cornerstone of beautiful, unfettered capitalism is buried under a heap of taxation and regulation, overseen by incompetent bureaucrats, and politicians beholden to special interests.

So, whilst I'm going to be ranting on this obscure corner of the internet for quite some time, I do so without hope of ever seeing any meaningful improvement in society in my lifetime. This blog is essentially my howling at the moon in despair as the world around me becomes increasingly unintelligible.

In case you haven't realised, in terms of politics, I'd class my self as pure-blood libertarian; an advocate of genuine laisseze-faire economics, and a state who's sole role is the protect individual rights; a republic as distinct from a democracy.

I live in Australia, but spend a substantiative portion of my life studying US history and politics and spend a reasonable amount of time there either working or travelling. I have no partisan political affiliation, although I have a degree of respect for the Liberal Democratic Party in Australia (although somewhat less so after they changed their name from the decidedly more inspiring "Liberty and Democracy Party") and (to a much greater extent) the US Libertarian party as well as some very small elements of the libertarian wing of the Republican party, despite the remainder of that party consisting of bible-thumping bigots and agrarian socialists.

Anyway, now you know what I'm all about, welcome to my little corner of the world...