Freedom and Prosperity

Monday, November 29, 2004

Need Another Example of Government Ineptitude?

Er, Which Connection Was That Supposed to Be?

In today's UK "Daily Telegraph", another example (as if we need one!) of government bungling and wasting of taxpayer's money ("Prescott's GBP 50m Travel Site a Waste of Time") .

"The Department for Transport is warning travellers not to place too much faith in its £50 million internet journey-planner project because it may be unreliable."

This was supposed to be a website to encourage people to use public transport by making it easy to access information and plan journeys. However...

"But problems with the scope of the scheme, data-gathering and software design have caused a series of delays characteristic of public sector information technology projects."

In contrast to the bungling of the "Men from the Ministry" (those same helpful people who only the other day were going to tell us all how to raise children successfully!), there was already a private sector service available, "Xephos", set up by Mr Peter White.

"His site cost under £1 million to set up, 50 times less than Transport Direct.

"For all the money they have spent, you would have thought they could come up with a better product," Mr White said."

Well, actually, no I wouldn't have expected anything else but the sort of fiasco that has happened.

Another sad and sorry tale of governement ineptitude and waste. Will anyone bear the consequences of this? Of course not! Let's see what's happened to the person responsible for this masterstroke.

"The project was initiated in 2000 by the former transport secretary John Prescott, who is now the Deputy Prime Minister."


Friday, November 26, 2004

Big Sister is Watching You!

The Logical Conclusion of the Welfare State

A frightening article in today's UK "Daily Telegraph" (here) - "State has a role in family life, says minister".

"The government has the right to intervene in family life because there are social implications in the way parents bring up their children, one of Tony Blair's closest allies said yesterday."

In this interview with Margaret Hodge, the children's minister, the case is made for state interference in the home because the state has to "pick up the pieces" when parenting goes wrong.

The whole tone of the interview is that people don't know what's best for them and how to live their lives successfully, so the benevolent state has to step in and help them out. What utter nonsense and arrogance!

I suppose this is logical in a way. The collectivists have, over the last 50 years or so, created a culture of dependency and dis-empowerment so that the ordinary person has become increasingly unable or unwilling to take responsibility for themselves. Having created the problem in the first place, the advocates of state control now use that as a justification for further interference.

The interview contains such gems as this:

"In her view, many parents want government advice on how to bring up their children.

"You take home this little bundle of joy from the hospital and you don't know where to start. People want the state to help them." The Government is to launch a campaign to improve the way parents raise their offspring.

The Department for Education and Skills will publish a booklet, which will be given to all new parents, telling them how to bring up their child."

The idea of a bunch of inept bureaucrats (the "Department for Ignorance and Bungling"?) telling people how to raise their children would be laughable if it wasn't so frightening.

As I observe the UK from afar, I almost can't believe it's happening. Almost in slow-motion, a once proud and strong nation is being reduced to ignoble servitude.

As an aside, I notice that despite their blood being spilled in Iraq, the "Black Watch" regiment will not be spared under the government's defence "reorganisation" (= "cuts"). I can only imagine that a simmering resentment is building up in the armed forces.

Wednesday, November 17, 2004

In the UK...Liberty is Going Up in Smoke

I Thought Things Were Bad, But...

In today's "Daily Telegraph" (see here) there is an opinion piece ("With all these laws, our precious liberty is going up in smoke") detailing the various laws introduced by the Labour government to regulate various personal activities. I've commented before on fox hunting and the proposed ban on smoking in most public places but I didn't realise what else was regulated. Here's some examples of the insanity.

"The Housing Bill will make it an offence to place your own home on the market without first spending £600 or more on a home information pack"

and

"Since June, it has been illegal to own a horse, donkey or a Shetland pony without obtaining an ID card for the animal to ensure it does not poison anyone who eats it. "

and

"Even teenage "canoodling'' is now criminalised under the Sexual Offences Act 2003, which forbids under-16s from engaging in any sexual activity, though police and prosecutors have been issued with guidance to ignore the law where it seems to them appropriate to do so."

It would be hard to make this stuff up! Of course, while the government seems quite happy to meddle in the lives of ordinary law-abiding citizens, it seems reluctant to protect those same citizens:

"Yet, at the same time, the Government has introduced a new regulation whereby a thief who steals goods worth £200 or less from a shop will not automatically be arrested and taken to the police station but handed an £80 fixed penalty notice, without any criminal record provided it is paid on time."

Which leads to the observation:

"So, you can go to prison for not getting a horse an ID card when it has been perfectly lawful to own an animal without state interference since our forebears painted their faces blue. But if you are a thief, expect a rap on the knuckles, apparently because it takes up too much police time to deal effectively with "low-grade" shoplifters."

I can only shake my head at this lamentable state of affairs. Let this be a warning to those of us living in societies such as Australia and the USA are that are still relatively free. These seemingly trivial restrictions are just the thin end of the wedge and will lead to much worse. As an example...

"From next August, as a result of an EU directive accepted by our government, an estimated 5,000 vitamin and mineral supplements will become illegal. Any shopkeeper who continues to sell them will be committing a criminal offence."

This is the result of the notorious Codex regulations which are nothing more than a conspiracy by the big drug companies to stamp out competition from natural supplements.

Readers might think it odd that I would rail against big business in this manner. However, I am pro the free-market, not pro big-business per se. Big business often colludes with government to thwart the free-market. Of course, this would not be possible if government refrained from over-regulation and kept out of things that they have no business being involved with.

Monday, November 15, 2004

The Problem With Governments (Contd)

Why the Taxpayer Gets Poor Value For Money

I've commented before on the problems with various public services, particularly in NSW (don't mention the trains!). From today's editorial pages of "The Australian":

"It is true that everywhere we look in Australia we see a crisis in the delivery of services. Commuters on Sydney railway platforms gaze forlornly up the tracks for trains that do not arrive. Public patients languish on year-long elective surgery waiting lists. Power outages have hit every state except NSW and Tasmania and most of the states are in the grip of water restrictions. Perhaps most tellingly, parents are fleeing the public education system, no longer confident it can give their children the skills – and values – they deserve. Meanwhile, infrastructure lobby groups point to a long-term reduction in capital spending by governments and argue this is dampening growth by as much as 1 per cent of GDP per year. But alarmist projections by groups that stand to gain directly from a taxpayer-financed infrastructure boom should be treated cautiously. Part of the overall reduction in public infrastructure spending is the result of the privatisation programs of the 1980s and 1990s. And just as those programs have led to more efficient delivery of services with a fairer spread of costs, a new wave of competition-based reforms – for example, of the electricity industries in NSW and Queensland – could improve services and protect profits from rapacious state treasurers so they can be ploughed into infrastructure."

The article then goes on to pinpoint the underlying reason for the sorry state of affairs:

"The problem with the states is not their aversion to debt. It is that they have splurged a fiscal bonanza on pay increases for public-sector workers that have not been earned by productivity improvements. Public sector employees still get away with work practices their private sector cousins relinquished years ago – and that, as much as infrastructure problems, explains the crisis in services. Helped along by the property boom and the GST, the state Labor governments have opened their wallets to their unionised workers while still reducing underlying debt. Something had to give, and the evidence before our eyes suggests that in many cases it was infrastructure. "

It's a point that is worth repeating. In the absence of the discipline of competition and the free market, any business ends up becoming a captive of producer interests. In the case of public services, this means the unions and the bureaucracy. As a result, the customers (ie the public) end up getting inferior services and poor value for money. While the Randian ideal of governments only providing law and order and defence of the realm may not be attainable, the taxpayer and the ordinary citizen would be far better off if we moved in that direction. Governments aren't any good at running businesses and they should get out of trying to do so.

The "Nanny State" Run Riot

What Will They Ban Next?

I'm beginning to despair of my homeland, the UK. Under the current Labour administration, the "Nanny State" is running riot. In today's Daily Telegraph (here) is an article about the latest Public Health White Paper that proposes severe restrictions on TV advertising for "junk food".

This comes on top of news last week that the National Health Service is offering "personal trainers" as part of their services and various bans on smoking in public places. Where will it all stop?

There was also this quote from Dr John Read, the Health Secretary, about the White Paper:

"What people want in today's world is as much support and assistance from the Government as possible to help them make the healthy choices that will give them a better quality of life."

Er, no. What I would suggest people want is for the Government to get it's hand out of their wallets and stop bossing them around!

I'm no great fan of either junk food or smoking. However, at the end of the day people have to take responsibility for their own lives. I'm aghast at the Government now holding itself out as some kind of authority on health when it's been the source of so much dangerous mis-information in the past (fluoride in water supplies, promoting low-fat diets and anti-vitamin propaganda, for example).

Of course, one argument is that it's in the national interest to promote better health simply to relieve some of the burden on the National Health Service. I'd suggest this is the wrong way round. Do away with the NHS and let people be responsible for themselves and be free to make their own lifestyle choices but bear the consequences. Unfortunately, the NHS is an untouchable "sacred cow" for the time being.

Sunday, November 14, 2004

The Reality of the Welfare State

Why the Welfare State Isn't Really About Helping People

A recent Gary North newsletter commenting on the US elections contained a wealth of material. One of the topics he covered is what the welfare state is really all about. Although he is commenting on the USA, the same pretty much applies throughout the Western World.

"I had heard another Democrat on TV make the same point immediately after the election. "We are for values: the value of helping the poor." In reality, this is the value of filling immense government bureaucracies with college-educated, mostly white, Civil-Service-protected, union-protected employees, who then extract money from taxpayers, absorbing at least half for administrative costs, and handing out most of the rest to middle- class voters. This procedure is whitewashed -- and I do mean WHITEwashed -- in the name of helping the poor. The middle classes feel good about their compassion, not to mention $270 billion a year to send their kids to college. Not many ghetto kids are in college."

Harsh? I don't think so. Despite decades of welfare spending the relative position of the poor doesn't seem to have improved (as you would expect, I guess, given that the effect of welfare is to create a dependency mentality and actually dis-empower the people it is supposed to help). Of course, their absolute position has improved but that is no more than would be expected with the increase in the general level of prosperity (due, of course, to the operation of the free market despite the best efforts of the state to impede it!).

Gary also makes the point:

"Politics is a zero-sum game: winners profit at the expense of losers. Anyone who knows about zero-sum games knows that the winners are the bookies and the house. So, who are the political winners? The promoters. Who are the losers? The taxpayers."

When he refers to the "promoters" he is talking about the political establishment and the entire unelected, permanent government that exists. This is the awful cost that productive citizens bear under the current system of "mis-representative" democracy.

"But because the game of politics looks exciting, and it appears to the players to be winner take all, the illusion of having won prevails among the victorious 51%, and the reality of losing is blamed on the winners by the most recent losers. Meanwhile, the promoters deposit most of the gate's receipts."

This is what I was referring to in a previous post "Whoever wins...we lose!" The right wing camp both here in Australia and now the USA are crowing over the recent election victories. The harsh reality is that the underlying game hasn't changed and the best voters can hope for is that the "least bad" candidate prevails.

Before I get too depressed, it's worth recalling Churchill's comment about democracy. "It's a terrible system...until you consider the alternatives!" The point, however, is that Mankind's journey towards true freedom is a work in progress.

Tuesday, November 09, 2004

US Election - Postscript

So, What Happened to the "Socionomics" Forecast?

Just back from a seminar in LA and apologies again for the "gap" in posts over the last week or so.

Well, what went wrong with the forecast of a Kerry win? Coincidentally, on my return an interim issue of the "Elliott Wave Theorist" awaited me. I can do no better than to quote Bob Prechter:

"Four years ago, I predicted that George W. Bush would serve only one term and lose the 2004 election by a large margin. This expectation was based on my forecast for a great bear market. The bear market did begin that year, and it caused the stock market averages to drop by more than at any time in 60 years...Negative psychology exploded (literally) and was on track for an ousting of the incumbent. But a funny thing happened on the way to a single-term presidency: The market - and thus social mood - recovered in 2003 and held near its recovery highs right up until election day."

Prechter had, in fact, revised his opinion somewhat back in August when he commented "But if the market holds up until the election, he will probably win a second term."

In hindsight, your humble blogger misread a number of a factors. As Prechter comments above, even though the stock market is still well off it's highs, it's been rallying since early 2003. More importantly, indicators of investor sentiment have been consistently and strongly positive for an extended period. Although this is a very negative sign going forward, as an indicator of current mood it's important. Also, the USA has a had a strong boom in the housing market and although this is now coming off the boil, it must have had an influence on the level of people's optimism.

The other element was the "war" factor. This would usually favour the incumbent as a result of the "rally to the flag" effect.

There's no doubt that the result was an impressive win for Bush. However, the relatively close result is, to me, a reflection of the gathering negative social mood and I have no doubt that there are stormy times ahead. The situation seems very like 1972 when Nixon was re-elected and Bob Prechter draws the same comparison. The conclusion from that and the broader analysis is that the Democrats will win, and win big, in 2008. Hilary Clinton back in the White House? Perhaps my previous bet was simply premature!

Wednesday, November 03, 2004

In Praise of Bill Gates!

Why Bill Gates Deserves Every Cent of His Billions

Apologies to readers for the recent absence. I'm also going to be away until early next week and regular blogging will resume thereafter.

Couple of excellent articles by Gary North on the free market, contracts and Microsoft. Read them here and here. Gary is one of my favourite writers and manages to bring great clarity to the issues he writes about (and usually with an interesting and different perspective).

"Gates was present at the creation of the microcomputer industry as a member of the Boston Computer Club. If we date the advent of this technology with the Altair 8800 in 1975, then only Apple and Radio Shack got into this industry in a big way earlier than Gates did. Insofar as the industry is a mass-market phenomenon, Gates created it – as close to singlehandedly as anyone has ever created a mass market industry."

It's easy to lose sight of what Bill Gates has achieved. For all the criticism that Microsoft attracts (much of it deserved, I would add), they have undoubtedly been an integral part of making computing easily available to the mass market. The productivity gains and increased wealth created by this has been enormous and Bill's fortune is a reflection of this.

Interestingly, instead of being held up as a giant of our age, Gates is given grudging respect at best and at worst is heartily despised. A very good example of the "anti-prosperity" mindset that is unfortunately so prevalent in our societies today.