Monday, 29 April 2013

Farming, A Business not a Government sponsored life style....

There is a near masochistic pleasure in listening to the General Secretary of the IFA, Pat Smith, wittering on economic issues. It's not Smith's fault that he dances so deliciously with the sort of mental dissonance which could be weaponised & used as a Sheldon Cooper Exploding Brain Ray, rather this is the daft job he does for the Irish Farmers Association. 

(Let me take my skin out of game. I was one of the countries least able farmers & could not make a living at it even by borrowing very large amounts of money. Now I'm a direct beneficiary of the IFA's rent seeking.)

On Thursday night Smith was part of a three person panel at a Leviathan Discussion concerning the EU in Kilkenny. Neither Junior Minister Lucinda Creighton nor billionaire businessman Declan Ganly showed any interest in countering Smiths more egregious offences against sense, either because they did not take him seriously or because upsetting the declining farming lobby is still taboo. No one pointed out that he was a lobbyist for the state's most subsidised & protected industry. 

"People don't understand how dangerous free trade could be," began one typical interjection, "It's all right if you gain 3 jobs but what if you lose 500 and that happens.You can have to much free trade, free trade needs to be controlled"

This is nonsense. 
Worse it is impoverishing nonsense. 
Free trade improves makes all of us prosperous.
Free Trade is dangerous only to those who do not produce efficiently or satisfactorily for us consumers. The law of comparative advantage, the notion that  free trade works even if one trade partner holds absolute advantage in everything produced, means that free trade makes everybody richer by forcing business to produce what they do best. Price signals tell us where that advantage lies. Free trade forces business to up its game or get off the pitch & let others play with the ball.

The benefits form a virtuous circle: resources are better utilised, total production increases, making that production cheaper & these efficiencies allow the creation of more wealth, resources & trade.

Production of complex goods requires multiple of multiples of trades so the useful effects of free trade multiply & propagate throughout the economy making everything from ipads to cars more available.

There can't be too much free trade: the  benefits accrue from the all-for-nothing nature of the competition forcing resource re-allocation. Controlling free trade is a merely a form of corruption as business seek advantage from politicians and protection from consumers choices.

Therein lieth the problem. Farming is a business not a sacramental national duty. Even if free trade lead us to move completely away from food production that would only happen because we can do other things better. We have no religious duty to farming or farmers. 

When Pat Smith witters about economics he & the audience should be reminded that he speaks for a subsidised lobby group that costs EU consumers over €100billion  between CAP  subsidies & protected higher prices. He should be challenged & made justify every piece of anti-prosperity mercantilism he spouts, from arguing for protection based on Japan's insane rice farmer fetish, to pretending controlled free trade is real. 

We need to stop being masochists. Let's treat ourselves to some vanilla prosperity.

Sunday, 28 April 2013

The End of Gays?

Gays won't need to be cured after all. In an article in a peer reviewed scientific journal Dr Abra B'Cadabera of University of Columbia has announced the discovery of both a group of genes & genetic markers which collectively predispose males to homosexuality AND a near fully commercialised, patent protected test with a 98.3%
accuracy in predicting male homosexuality. 

"This complex gene/marker interaction is neither unique in its chemical nature nor random in its final outcome thus making test development both easier & more resistant to random outlier failure" wrote Dr B'Cadabera whose company, HeteroGenome is attracting massive funding and interest. Female homosexuality is not precisely predicted by the test but Dr B'Cadabera predicts that HeteroGenome will have fully accurate Lesbian test withing 12 months.

Since the test is equally effective as a pre-natal screen as early as 6 weeks gestation, the potential market for HeteroGenomes product is enormous. Early estimates are that  sales could top $8billion p/a in short order with at least 80% of potential male homosexuals aborted.

These figures have drawn the ire of gay activists. SF Gay Pride has barred Dr B'Cadabera from attending the festival.
"Dr A. is about to profit from the mass slaughter of gay babies, she is worse than the Taliban or the Nazis in promoting a Gay Holocaust" a festival spokesperson said. 

The anti-test lobby is growing rapidly, PAQT (prounced "pact") People Against Queer Testing states it is pro-choice but anti-queer selction. The group is promoting a boycott of any company funding HeteroGenome or doing business with the Eight Avenue based company.

This has placed many liberal & gay-friendly clinics in an invidious position. Speaking under condition of not being named one Californian physician managing a very large medical clinic chain said 
"Having a gay child is tough for even the most accepting family. The thought that your lovely child will face rejection & bullying by Neanderthals is very tough for parents. Add to that the suffering any gay man will endure just for being different & you can understand why women would choose to terminate. PAQT's efforts just hurt caring mothers making what they see as the best choice for their family"

Pro-choice TV Evangelist Tammy Faye Falwell is an outspoken supporter of HeteroGenome. In a Sunday broadcast she described gays as the Devil's children & said that God had inspired Dr B'Cadabera to rid the world of homosexuals. Westboro Baptist church have also welcomed the development.
"If this works America could be free of faggots & we wouldn't have to picket no more" was the response from a church elder.

Wednesday, 17 April 2013

Hating Sense

Like a herd of half rotted zombies spotting some some living flesh, the unreflexive Irish left set about moaning, mumbling & grunting this week in defence of a  government
funded website that advised teens to get involved in threesomes to spice up their sex lives. It seems that such advice is, when given by a government funded boondoggle, automatically good. 

Exactly why Government should rob the productive sector of the economy of €124,000 to give to website aimed at the most net literate demographic is an unaskable question. Public robbery is always a good thing for the Zombie Left and anything that undermines families & parents at the same time is doubleplus good.

Always counterfactual helps to put these issues in context. Imagine if the Iona Institute advised teens to experiment with threesomes as a a means of sexual excitement? You can hear the howling outrage from the same people who defended the sordid as they denounce both the site & the advice. Everything from STDs to emotionial damge would be pointed out as the fruits of such a poisoned tree.

Anyone can give what bad advice they like on the net, a wonderful anarchic combination of Speakers Corner & the World Fair. The issue is not that spunout gave rotten advice (it did) but that we were all forced to fund the giving of that rotten advice as a government service to the vulnerable. 

All the hypocrites defending rotten advice on our dime have achieved is to reveal their deep, nauseating hypocrisy. Either they believe robbing us to give teens worse advice than Cosmo might do, is fine, or they will defend any Government funded boondoggle that undermines families. Either way we know they act, not in teens interests, but out of shocking malice and hatred.

Thursday, 14 March 2013

Yoking Slogans

There is a joke about a prisoner who on his first night in gaol hears his fellow inmates calling numbers.
"148" is followed by guffaws. "51" gets rollicking laughter.
He asks his cellmate what is going on and is informed that jokes are retold so often that jokes are numbered for ease of telling.
"29" he calls.Silence.
"44".Deeper silence.
In desperation "148".More deep, embarrassing silence. 
"Mate, it's the way you tell them" says his cellmate sadly.

Language gets reduced to a point that it becomes indistinguishable from numbered bells evoking a Pavlovian response, lacking either meaning or subtlety. Such a reduced language can neither serve to convey or allow thought or debate. 

It was Dr Johnson who described the metaphysical poetry as "heterogeneous ideas yoked together by violence". Yoking together words in a binary to create a slogan posing as a truth or an argument has become the prime methodology of the populist left.

This gives us such implacable nonsenses as "climate justice" and "social justice", where the inarguable virtue of justice is yoked to favoured fashionable term to create a the needed slogan which has no meaning other than that ascribed to it by the user, judgement implicit in language. A similar and even more pernicious binary yoking is "marriage equality" where the progressives sacred word is used to create a a slogan out of marriage.

'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.' That was in "Alice Through The Looking Glass". Invented terms allows for the Humpty Dumptyisation of language, its reduction to a set of value judgements. Rather than a means of communication, this process is designed to strip language of an ability to communicate complexity, ambiguity or real meaning, to short circuit debate by reducing language to the prisoners joke log.

We should contest every term, dispute every assumption, allow nothing to be built in to language. If language is reduced to a list then we won't lose the argument, there will be no argument to lose.

Monday, 11 March 2013

Windfarming for Poverty

Pat Rabbitte, the grandly titled Minister for Communications, Energy and Natural Resources, was defending Wind Farms vigourously last week. There are few bad ideas floating around in politics and economics that Mr Rabbitte has not held, so his attachment to the new secular faith of AGW is no surprise.

Wind farms don't make wealth, they consume and destroy it. The bird-blitzing noise makers gobble more energy in their manufacture and construction than they ever return and only exist because Government forces the rest of us to buy the electricity they intermittently produce, at a premium paid in the so called Public Service Obligation on our electricity bill. If wind was a viable,economic source of power NO subsidy or purchase mandate would be necessary.

Big, established, power companies like ESB (and its vested interest unions) love the subsidy because it puts a floor under the existing price of electricity, preventing small, nimble competitors gaining a foot hold in the market. Windmills don't just blitz birds, they blitz proper capitalist competition too.

Every Wind Farm repesents a real drain of all our wealth, a transfer to rich crony capitalists that makes us poorer. Wind Farms steal money in the name of Ecolgical Purity,diminishing our choices and opportunities.

Wind Farmers are rent seekers, not creators of value or wealth. Government forces us to subsidise these crony capitalists and Rabbitte adds to the injury by lying to us on our dollar. We are entitled to by or electricity as cheaply as we can and we are entitled to ministers that care about our interests ahead of new fangled religions and crony capitalists.

By 2020 we are to be forced to by 16% of all electricity from wind farms, more EU stupidity.  Well I might paraphrase Ronald Reagan; "Standing before their electricity bill, every man is a victim, separated from his fellow men. Every man is forced to look upon a scar. General Secretary Rabbitte, if you seek peace, if you seek prosperity for the Ireland and  Europe, if you seek liberalisation: Come here to this gate! Mr. Rabbitte, open this market! Mr. Rabbitte, tear down the Public Service Obligation!"  

Wednesday, 27 February 2013

Gravity is not for repealing

It is one of the great pities that the politicians who profess the most care for the poorest generally believe in a flawed economics that would either keep those people poor or make them even worse off. One should pay very little attention to the protestations of politicians and none at all to their tears.

Justifying bad ideas on the grounds one means well is the corrollary of the argument that goes "you only care about the rich/you don't care about the poor", a type of as hominem that is both disingenuous and illogical.

Meaning well is not enough. Bad economics helps no one but it is the poor who suffer the most when jobs are scarce and wealth creation stops.

No matter how much we much want to fly simply by stretching our arms and tingling our toes, gravity won't repeal. Whether it pleases us or not economics is just as inflexible in the limits it places upon us. We can either work within those limits or stretch out our arms and talk to that imaginery control tower in our head. If we chose to do that on the top edge of a high building the results are catastrophic.

Unfortunately any descriptions of the realities of economic activity are just dismissed with the caring argument. Enough chancers, power seekers and conmen from Marx to Keynes and beyond  have weighed in to justify wingless flying that any forum is simply thick with dreams.

Economics is always the study of scarce resources with multiple alternate uses. No matter what the resource is: land, labour widgets, money, there is never enought to satisfy everyones every need. This means making choosing between possible uses.

Money prices allow us to calculate and decide what to use and how much to use. Left to our selves we will buy cheaper of similar quality but quality is what the consumer says it is: adding a logo-ed label may increase the price of some goods enormously. Always price is what someone will pay, not what you think your widget,land or labour are worth but at what price you can exchange them for money. Put more elegantly this runs "Value is subjective".

Subjective value makes trade possible: if the value of goods is inherent or fixed then trade would at best be a win/lose situation. Instead when I sell my labour for your money I value the money more highly than the hours spent working and you value what I do higher than the money you pay me: we have engaged in a win/win operation. Trade only happens when both parties feel a gain.

Because value is subjective no one can force us to believe anything is worth more or less than we think it is worth. This means when government tries to do just that, establish a high price by edict, either we don't buy the goods or  resort to a black market. Should Government decree a too low a price then we won't sell except again on a black market.

All those subjective prices, and there are countless million in the economy, guide consumption and thus production /distribution. Higher price for any good both discourages use and makes alternatives more appealing for consumers while at the same time encouraging producers to switch to to the higher return good.

Price acts as a signal and a method of rationing so high value uses of scarce resources are chosen.

Government cannot wave a wand to make resources any more plentiful than they are. Edicts won't make one extra hour's labour, one extra widget or cent of wealth. Every cent spent by Government is a cent from somewhere else in the economy.
This is the ultimate harsh reality, nothing is free, some one always pays. Should Government print money the same applies: as a token for wealth more cents for the same amount of goods mean a lower value tokens, higher priced goods. Those who get the new money early, before that ripple of new valuations has worked it's way through do well, those who don't and ultimately  everyone, suffer from the created price rises.

All sound economics starts with subjective price, every false theory rejects it. left alone those subjective pricing decisions make us all bettter off by guiding the economy to produce what we want a t a price we will pay. That is what is meant by a market economy.
When you hear a politician or would-be power broker say the words "market economy" a if he/she was spitting acid they are merely rejecting your and my right to make or influence decisions on what is economic. They think that they know better than the countless million little people. Don't give people with that attitude a scintilla of power!

Sunday, 24 February 2013

The Repo Man is coming...

If Patrick Honohan, Governor of the Central Bank, wants to see the mortgage arrears crisis handled, then he should try either talk to the people who can do most to speed up the resolution: people with mortgages in arrears or improve the interface between the i-doting t-crossing quadruplicate-form filling civil servants in the Central Bank and the bank staff working to resolve the problem.

Honohan's intevention last week to castigate the banks on their "failure" to deal with mortgage arrears crisis" was a direct re-statement of his remarks 11 months ago (, reminding us once again how ineffectual the Central Bank has been and is.

Since there are no blanket solutions to the mortgage arrears problem, no jubilee, no Government payments, only a case by case approach, individually negotiated with up to one hundred thousand households, can happen. Even with a those householders' best will that takes enormous, skilled manpower. That good will does not exist, and the manpower is tied up settling the vast sea of non-performing commercial loans. 

The threat made to punish banks by changing capital rules is a very dangerous one. Central banking by it's nature is either a crony-capitalist game (US Fed) or a direct government restraint of trade & markets (everywhere else). Now Dr Honohan has taken onto himself the power to punish selected companies for not doing as government wish. Honohan is no Mussolini but the practise of Government control of supposedly private enterprises is old fashioned 1930s Fascism. Such talk is popular because banks are unpopular but anything that further erodes commercial freedom and property rights helps undermine the economy.

With over 11% of of the roughly three quarters of a million Irish mortgages distressed, a rate ten times that of the UK, there is an urgent need for constructive comment from the Central Bank. Much more effective would have been a speech telling those in mortgage arrears what options they had & with which options & restructuring options they might expect their mortgage provider to agree. 

Even with mutiple options (debt for equity, interest free bonds, rent back) the current very low level of home reposessions here will rise dramatically. Despite having ten times the troubled mortgage rate prevailing in the UK , Ireland has more than four times lower a reposession rate. Such a large divergence in practice across two relatively similar legal systems will not continue.

Honahan's advice should have been to holders of troubled mortgages and it should have been brutal. Get in to your bank and make a workable deal now, the future will be much worse.

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