Wednesday, 31 December 2008

Some New Year Investment Resolutions

Bernard Madoff is an Object Lesson

As the year comes to an end, most people who have had investments are probably licking wounds. With the S&P index down 40 percent for the year, few investors would have escaped. So, adversity is always a good time to learn some good lessons, and learn them well.

Here are some possible New Year investment resolutions.

If it sounds too good to be true, it probably is. How often have we heard that proverb? Yet still people get suckered and end up losing lots of money. Big returns mean big risks, and big risks kill.

Bernard Madoff is a name unknown to us until recently. We had never heard of him. However, those in an exclusive and very wealthy niche group had not only heard of him, they invested money in his securities business. The returns he provided his investors were outstanding. When you are running a Ponzi scheme you can manufacture extraordinary returns, as long as new investors keep walking in the door and your existing clients leave their money with you. You take your new clients' money and use it to pay out returns to your existing clients—everyone is happy, until the scheme collapses. And getting good returns is the very best way to attract new clients. The prospect of high returns always draws investors like bees to the honey pot.

If you throw in a dose of generosity and charitable works, the lure becomes irresistible. People love to make good money with a clear conscience. Madoff was well known in charitable circles; he was a generous donor; many charities invested with him. The fact that so much good was being done was one more reason not to look the gift horse in the mouth.

But apparently no-one knew how he was able to achieve such good returns. The smart people were the dumb ones who could not figure out how he did it, and declined to invest in something they did not understand. And apparently there were quite a few who made the “no” decision.

That leads us to our second investment maxim: we should never invest in something we don't understand. What we mean is, you do not understand how the money is being made, or where the returns are coming from. Some have applied this maxim in such a way they would never invest in a business where they did not understand how the product was made, or the particular technology, or whatever. But this is not necessarily what we mean. we may not understand all the in's and out's of how a computer works—but we know what functions a computer performs, why people find it has utility, and why they buy them. Therefore, even though we don't understand all the science represented in a personal computer, we know how Dell or HP make money.

But generally the more complex a business is, the more difficult it is to understand, the less attractive it should be as an investment. Once again the dumb money is the smart money. If people had applied this maxim they never would have invested with Bernard Madoff.

But there is a third investment maxim that would have been helpful. Never take advice—ever. Always make your own decisions, and hold yourself completely accountable for the decisions made. If you lose money, it is your fault—no-one else's. Never, ever hand over the control of your investments to someone else who will make the decisions for you. And never invest in something because someone else told you it was a good idea.

The buck has got to stop with each one of us. That helps us focus the mind. Now, we do not mean, of course, that you ought not to listen to others' views and opinions, but in the end you yourself have to be certain that the investment is sound. If we end up investing because of the recommendation of the broker or the adviser or the relative, or the other person who we believe is smart, don't invest.

Professional investment advisers will always be biased towards recommending what will sell. Investments with high returns are very easy to sell. Never trust their advice. We are not implying that all investment advisers are crooked or dishonest, as Madoff clearly has been, but that they are in business to make money, and money depends upon transacting investments, and there is an inevitable bias towards those investments which are easy to transact. The advisers may genuinely believe in the merit of the investment. They may recommend it honestly. But stay away from it—unless you understand it thoroughly, and you yourself come to believe in its merits. Let's remember, the dumb money is the smart money: don't try to make our dumb money smart by listening to advisers who we (and they) believe are smarter than us.

A good test is to ask yourself whom you would blame if you lost all your money on an investment. If it is someone other than yourself, the chances are you have probably invested very unwisely.

Tuesday, 30 December 2008

Mid-Week Miscellany

The Glenn Phenomenon

The NZ Herald has an Editorial on last year's phenomenon of Owen Glenn. The Herald ends up seeking to place the Glenn saga on a wider canvass extolling the benefits of hundreds of thousands, if not millions of Kiwi ex-pats prowling the globe, most of whom carry a deep affection for this country.

Well, maybe. To our mind, the real significance of the Glenn saga is something the editorial also focused upon. It was Glenn's striking candour and willingness to tell the truth.

But one element of the saga has gone too little noted and the year should not pass without it being observed. The lengths to which Owen Glenn went to ensure the truth became known were a testament to a commitment to this country that is truly remarkable . . . .

Mr Glenn did not sound like a vindictive man when he took steps to straighten the record. He answered reporters' questions in an open, candid manner, sometimes too candid about casual conversations with Helen Clark. He did not seem to hold a grudge against her despite the disgraceful way she had snubbed him at the opening of the business school. But he was clear and straightforward on the questions that mattered: who asked him for money, how it was to be paid, where it went.

When his word was challenged before Parliament's privileges committee he cared enough to come back to the country with telephone records and allow us to compare his candour and consistency with that of Mr Peters. It was no contest. He probably does not appreciate the full scale of the good he has done for New Zealand's public life.

It is an indictment upon public life in New Zealand in 2008 that a candid, truth-telling man, seeking to maintain his public reputation and integrity by telling the truth should appear to us as a radical and rare phenomenon.

Booker Announces the Exposure of Global Warming for What It Is

Christopher Booker, writing in The Telegraph, suggests that 2008 might just prove to be the year when the world will look back and realise that it was the year the hoax was exposed. He writes:

The first, on May 21, headed "Climate change threat to Alpine ski resorts" , reported that the entire Alpine "winter sports industry" could soon "grind to a halt for lack of snow". The second, on December 19, headed "The Alps have best snow conditions in a generation" , reported that this winter's Alpine snowfalls "look set to beat all records by New Year's Day".

Easily one of the most important stories of 2008 has been all the evidence suggesting that this may be looked back on as the year when there was a turning point in the great worldwide panic over man-made global warming. Just when politicians in Europe and America have been adopting the most costly and damaging measures politicians have ever proposed, to combat this supposed menace, the tide has turned in three significant respects.

First, all over the world, temperatures have been dropping in a way wholly unpredicted by all those computer models which have been used as the main drivers of the scare. Last winter, as temperatures plummeted, many parts of the world had snowfalls on a scale not seen for decades. This winter, with the whole of Canada and half the US under snow, looks likely to be even worse. After several years flatlining, global temperatures have dropped sharply enough to cancel out much of their net rise in the 20th century.

Ever shriller and more frantic has become the insistence of the warmists, cheered on by their army of media groupies such as the BBC, that the last 10 years have been the "hottest in history" and that the North Pole would soon be ice-free – as the poles remain defiantly icebound and those polar bears fail to drown. All those hysterical predictions that we are seeing more droughts and hurricanes than ever before have infuriatingly failed to materialise.

Even the more cautious scientific acolytes of the official orthodoxy now admit that, thanks to "natural factors" such as ocean currents, temperatures have failed to rise as predicted (although they plaintively assure us that this cooling effect is merely "masking the underlying warming trend", and that the temperature rise will resume worse than ever by the middle of the next decade).

Secondly, 2008 was the year when any pretence that there was a "scientific consensus" in favour of man-made global warming collapsed. At long last, as in the Manhattan Declaration last March, hundreds of proper scientists, including many of the world's most eminent climate experts, have been rallying to pour scorn on that "consensus" which was only a politically engineered artefact, based on ever more blatantly manipulated data and computer models programmed to produce no more than convenient fictions.

Thirdly, as banks collapsed and the global economy plunged into its worst recession for decades, harsh reality at last began to break in on those self-deluding dreams which have for so long possessed almost every politician in the western world. As we saw in this month's Poznan conference, when 10,000 politicians, officials and "environmentalists" gathered to plan next year's "son of Kyoto" treaty in Copenhagen, panicking politicians are waking up to the fact that the world can no longer afford all those quixotic schemes for "combating climate change" with which they were so happy to indulge themselves in more comfortable times.

Suddenly it has become rather less appealing that we should divert trillions of dollars, pounds and euros into the fantasy that we could reduce emissions of carbon dioxide by 80 per cent. All those grandiose projects for "emissions trading", "carbon capture", building tens of thousands more useless wind turbines, switching vast areas of farmland from producing food to "biofuels", are being exposed as no more than enormously damaging and futile gestures, costing astronomic sums we no longer possess.

As 2009 dawns, it is time we in Britain faced up to the genuine crisis now fast approaching from the fact that – unless we get on very soon with building enough proper power stations to fill our looming "energy gap" - within a few years our lights will go out and what remains of our economy will judder to a halt. After years of infantile displacement activity, it is high time our politicians – along with those of the EU and President Obama's US – were brought back with a mighty jolt into contact with the real world.

The Lust for Glory

Steve Maharey has written a piece (hattip, Whaleoil) lamenting our apparent passing up an opportunity to lead the world. He is disappointed about the government's decision to reconsider the Emissions Trading Scheme and regards it as a lost opportunity to inspire the world.

The new government's climate change policy is killing innovation, undermining science and abandoning our role as an inspiration to other countries

One night in 2007 I found myself at an official dinner in Brussels seated next to a man who advised the German government on climate change. We chatted about the role countries could play in the shift to sustainability.

He noted that what New Zealand did would have little impact on the overall problem. Our small size, however, did not excuse us from making a practical contribution. In addition, he said, New Zealand had a very special and more important role to play. “You”, he argued animatedly, “need to be a symbol to the rest of the world of what is possible”.

This small statement goes straight to the heart of what was (and is) so wrong with the left wing in New Zealand. Firstly, it is elitist. It has an abiding aspiration to "be somebody" on the world stage through leading the world. The Left in New Zealand grew up on the mythology of New Zealand being the most "progressive" country in the world at the end of the nineteenth and early twentieth centuries. They dream of recapturing that place in the van of global enlightenment. Maharey evinces it perfectly: he would want us to be an "inspiration" to the rest of the world.

Secondly, the Left is willing to do untold damage to the lives of ordinary New Zealanders in pursuit of its mad ambition. It may speak about compassion and concern--but these are empty and clanging cymbals. It will gladly and willingly impose a heavy burden upon the most vulnerable in pursuit of its mad ambition. The poor are so much cannon fodder along the way to sweeping the enemies of its vaunting ambition aside.

The Emissions Trading Scheme was (and is) economic treachery. When the economy is weakened and constrained through taxes for reasons of propaganda--trying to inspire the rest of the world--it is the poor who suffer. The elitism of the Left is cold, detached, impersonal, calculating, and remote.

Thirdly, the Left is riddled with utopian utilitarianism where the end justifies the means. The greatest good will be served by mankind escaping the perils of man induced global warming. Sacrificing New Zealand along the way is a small price to pay.

Remember how Helen Clark went through a period where she was seeking a defining cause, an aspirational symbol. She alighted upon climate change as the issue that would define her world leadership. She spoke gravely about achieving carbon neutrality. The world press noticed. And the Left noticed that they noticed. From that point on, New Zealand, its people and economy, became a mere beast of burden to be flogged to death in the mad rush to be an inspiration to other countries.

This fanaticism in search of a cause results in a discreditable ignorance and blind prejudice. Maharey cannot avoid displaying his cant, when he laments that New Zealand is going to have to hear from those who do not agree with the speculative theories of man-made global warming. He writes with all the condescension of an arrogant, superior, Left winger:
Those who advance the position that human activity is contributing to climate change are to be set against those who oppose this view – as if they are equals.

Of course they are not. The overwhelming view of the science community is for the former view. A tiny minority oppose this view. They may be right – minority views can be right – but in this instance they will have to work very hard if they are to be taken seriously given the depth of the evidence they are seeking to question.

The "depth of the evidence", huh. Sorry to be the little boy crying out about emperor's lack of clothes, Steve, old boy--but what evidence? When fanatical idealism overtakes hard headed scientific inquiry; when elitist politicians try to use scientific issues to fuel their own vaunting ambition, the end result is a Gorish embarrassment.

Thankfully the scientific community appears to be getting tired of being the propaganda playthings of arrogant politicians. Increasingly scientists are returning to professional, self-respecting scepticism.


Monday, 29 December 2008

Meditation on the Text of the Week

Resolute Before the Coming Year

The Lord is the portion of my inheritance and my cup;
Thou dost support my lot.
The lines have fallen to me in pleasant places;
Indeed my heritage is beautiful to me.
Psalm 16: 5—6
In this—as in so many of the Psalms—David contrasts his life, its course and prospect, with that of the wicked who know not God and despise Him.

He touches upon the essence of blessedness for the Christian: to know and to have the Lord as our God. Nothing in this life compares or comes anywhere near to touching this. The sheer goodness of the Living God flows over and engulfs the lives of His children.

David is conscious that his life has been falling out as part of a great plan. The course of his life has been given to him by Another; it has not been determined by himself. His life is therefore characterised as an inheritance. This is a foreign notion to many in our rootless, lost world. Former generations spoke of one being born with a silver spoon in one's mouth, or on the wrong side of the tracks. These expressions pointed to a realities by which one's life was shaped and conditioned. We did not ask for it; it was done to us—but shaped by it we inevitably were. These realities became our inheritance or the cup from which we had to drink.

David, however, has in mind a reality far more profound. Before he ever came forth, the Lord knew him and set His love upon him. Therefore, his inheritance, his cup was the Lord Himself. Nothing in this world could compare or compete with such blessedness.

Because he has inherited the Lord Himself, all of his life—despite its struggles, tumults, degradations, sufferings, and successes—has been undergirded and “undertoned” by blessing and goodness. David was later to write: “surely goodness and mercy shall follow me all the days of my life”. The Lord has supported his lot—that is, what has fallen out in the circumstances of life. The lines of that inheritance have been traced out in pleasant places. As he contemplates the course of his life in God's hand he says that his heritage has been one of beauty.

We come now to the commencement of another year; we do so in remembrance of Advent—the coming of the One who has gathered our histories, our inheritances, our lots, our cups into His hands. We therefore look back and testify with our father, David (who, by God's grace in Christ to us Gentiles, has himself become part of our inheritance and heritage) that our lives also have fallen along pleasant lines. To a rootless and empty and helpless people He has stretched forth His gracious hand and engrafted us into the same heritage that had come to David. Therefore, we, with David and like him, can say that the lines have fallen us to in pleasant places and that our heritage is beautiful.

This leads us to look forward to the coming year with a deep confidence utterly unknown by Unbelievers. We know that we will walk through the valley of the shadow of death and fear no evil. Our inheritance has meant that we can set the Lord continually before us. He remains at our right hand: therefore, we will not be shaken. Our hearts rejoice, we will dwell securely (vv 7—9). Our Lord is with us.

The image of the Lord at our right hand is singular and striking. The right hand is a symbol of skill, strength, and power. The declaration that it is the Lord Who is at our right hands means that His being with us makes us skillful, strong, and powerful in all that we are called to do. We will, therefore, withstand. We will, therefore, be resolute. We will, therefore, not be shaken.

And so we go gladly with quiet confidence into the coming days.

Saturday, 27 December 2008

The Hubris of the Modern Liberal

Taking the Name of Jesus in Vain

The modern self-conscious liberal tends to see himself as a cut above the ordinary bloke. He is smarter than the average bear. He has a cool rationality that is not held sway to dogma or creed. He is intellectually free to let the facts fall where they may, without pre-conditions or pre-commitments. This makes him intellectually superior.

Once he forms this view of himself--that he is of a superior liberal mind--he then can be found re-interpreting all of reality through his rosy coloured spectacles. Suddenly he becomes an expert on Jesus Christ. He moves quickly to use the name of Jesus to baptise his prejudices. But it turns out that his jesus looks and thinks remarkably like himself. In his mind, the modern liberal thinks that jesus was a first century manifestation of--well--himself.

An example of the mindset has been aptly provided by one of the contributors to the blog, Yes Minister. Contributor, Fairfacts has published a post critical of the Pope for his recent comments on homosexuals. The Pope apparently failed to live up to his duty and responsibility to manifest the superior mind of a modern liberal. We reproduce the Fairfacts piece as follows:
Pope Shows Kindness and Tolerance, Not

When you might think there are more pressing concerns, his awfulness has made a speech widely perceived a critising gays.

But whatever we are, aren't we all God's creations?

Thus, isn't it is little blasphemous for the Pope to criticise some for the way God created them.

Hardly the spirit of the week, eh!

I don't think Jesus would approve.

Now the Pope is a big guy who, we are sure, can look after himself. He is probably smart enough not to have any truck with the kind of self-indulgent, effete liberalism displayed here.

What is most egregious, however, in the post is Fairfacts's presumption to declaim on what Jesus would or would not approve. He displays the unfortunate arrogance of the modern liberal: he would remodel a new jesus, who is, wonder of wonders, remarkably like himself. Then he would parade this jesus around to bolster and justify his liberal prejudices and predispositions. "This new super revised liberal jesus would not condemn homosexuals because--well, because I don't condemn them".

Now, in the time that he has been posting, Fairfacts has also shown himself to be a modern warrior against Islam. He has written in stentorian tones calling the world to resist Islam as the great beast intent on destroying the liberal mind. But actually, it turns out, that on the most important issue of all--on the issue so fundamental the course of nations and every individual human being on the planet will be affected--modern liberal Fairfacts and Islam are cut from the same cloth. Both utterly reject the Living One, and both alike seek to recreate an alternative jesus, then parade him in the service of their prejudices.

Both alike persist in taking Jesus name in vain. Both alike persist in recasting Christ to conform to their own peculiar world view. Both seek to reinvent a revisionist jesus in their own image.

It is with a degree of sardonic amusement that we find at the very same time theologian Fairfacts piously intones about his jesus, the President of Iran, Ahmadinejad is reported as being about to deliver a Christmas message to the people of the United Kingdom on Britain's Channel Four. He too will talk about his jesus--who, he will speciously and vainly claim, would stand with the people in opposing "bullying, ill-tempered and expansionist powers". "If Christ were on earth today, undoubtedly He would hoist the banner of justice and love for humanity to oppose warmongers, occupiers, terrorists and bullies the world over," says the text of the speech by the noble Presidente.

Both alike deny the Christ. Both alike seek to manufacture a jesus in their own image. Both alike are fundamentally self-serving. Both alike abuse and profane the Name of the Holy One. Both alike are intellectually dishonest. Both alike walk into the path of certain doom.

What is infallibly certain and without doubt, both alike will be arraigned--along with all men--before the judgement seat of Christ Jesus, King of all kings, and Lord of all the earth. We don't think their respective false "jesus's" will be much help to them on that day.

Friday, 26 December 2008

Hitting the Shops for the Boxing Day Sales--Again

The Idolatry of Debt

We posted recently on the rapidly increasing levels of national debt we are facing in New Zealand. The current account has been in deficit every quarter for over fifteen years; not only has the deficit been getting larger overall, but the rate at which we are getting into debt is rising. The question is begged as to why this should be so. What is it about Athens that makes modern society addicted to debt fueled consumption?

Not all Athenian societies are thus afflicted. Take Japan as an example. Japan is implacably non-Christian, yet it has a high savings rate. One reason is that the Japanese have no choice but to save. Given the Confucian ethic of filial piety that pervades the eastern world, most Japanese believe they have a duty to take care of their aging parents, as well as their children. There is no statist welfare system. So Japanese society feels compelled to forgo present consumption and gratification for the sake of providing for the extended family in the future. Filial bonds and family love is a powerful motivator to save.

Moreover, the knowledge that you face the vagaries of life without the “safety net” of statist welfare brings a certain sobriety into one's spending habits. Fear is also a powerful economic motivator to save.

Thus, Japanese society maintains a high savings rate. But in the post-Christian western world, Athens is characterised by rising indebtedness, low savings, and spectacular addiction to consumption lifestyles. And this is pretty much universal in the west. Why?

The reasons are spiritual—that is, to do with the prevailing and predominant religion of the day. The West has, in its post-Christian garb, become a culture of entitlement. Beliefs in universal human rights have transmogrified into a world where people believe they are entitled to just about everything. I have a right not to starve—regardless of whether I choose to work or not. I have a right to a certain standard of living—and others (the state) has a duty to ensure that I get it. I have a right to a certain minimum wage, regardless of what value my work might create. I have a right to a certain standard of living regardless of my enterprise, thrift, work, or lack thereof.

Freedom to pursue has become a right to expect and demand from others. Wherever state welfare has been adopted in Athenian societies, savings rates are low, debt is high, and consumption is relentless. The deeply held belief that society will provide for my future, encourages reckless consumption in the present. Consumption can quickly become addictive: the discipline to deny oneself in the present for the sake of future advantage disappears, being replaced by a culture of gratification in the present.

How many people seek to deal with depression by gorging on food, or by buying goods? When times become harder, debt levels rise, rather than consumption reducing. Gratification in the present easily justifies increased debt in order to maintain consumption. The rights-based culture of entitlement readily sanctions such behaviour.

What this has produced in modern western Athenian societies is a rapidly widening ghetto culture. Sociologist Edward Banfield characterises the attitudes of people captive in metropolitan ghettos, who cannot get out of them. Read carefully the following description of the ghetto mindset:
At the present-orientated end of the scale, the lower-class individual lives from moment to moment. If he has any awareness of a future it is of something fixed, fated, beyond his control: things happen to him, he does not make them happen. Impulse governs his behaviour, either because he cannot discipline himself to sacrifice a present for future satisfaction or because he has no sense of the future. He is therefore radically improvident: whatever he cannot use immediately he considers valueless. . . .

Although his income is usually much lower than that of the working-class individual, the market value of his car, his television, and household appliances and playthings is likely to be considerably more. He is careless with his things, howver, and even when nearly new, they are likely to be permanently out of order for lack of minor repairs. His body, too, is a thing “to be worked out but not repaired”; he seeks medical treatment only when practically forced to do so: “symptoms that do not incapacitate are often ignored.” . . . .

The lower class household is usually female based. The woman who heads it is likely to have a succession of mates who contribute intermittently to its support but take little or no part in rearing the children. In managing the children the mother (or aunt, or grandmother) is characteristically impulsive: once children have passed babyhood they are likely to be neglected or abused, and at best they never know what to expect next.

The Unheavenly City, p. 61,62

The thing here is that this lower-class world view is increasingly becoming the world view of the working class and the middle class and the upper class. The ghetto mentality and attendant world-view is spreading rapidly—as lifestyles of the “not so rich and not so famous” are being fueled by instant gratification with material possessions, funded by debt.

We cannot see how Athens will get out of this vice—short of some great shock or desperate exigency, such as a world-war. The problem lies at the heart of Athenian religion.

The Christian, however, has been turned away from the idolatry of Unbelief. His heart has been changed by the Spirit of Christ. The idols of entitlement have been broken. The Christian sees himself as a steward under God—responsible to the King to administer all income and capital in His Name, and as He commands.

The Scriptures declare that debt is a form of slavery. The borrower is slave to the lender. (Proverbs 22:7) Debt restricts our ability to be free to serve God. Therefore the Christian is very cautious about debt, deeply reluctant to enter into debt contracts, and seeks to pay it down as soon as possible.

Secondly, the Christian knows that he has a duty to prepare for the future. He must lay up an inheritance for his grandchildren. (Proverbs 13:22) Therefore his work, thinking, planning must encompass at least four generations: he must take care of his own aging parents; he must provide for his own wife and children; he must prepare, plan, and work for the benefit of his adult children and their future; he must also extend his thinking out to how he is going to contribute to the lives of his children's children. This is what it means to be a Christian man or woman: it is a duty and calling that is all consuming and completely demanding. But it is the Lord's way.

Therefore, thrift and disciplines of long term saving characterise the Christian lifestyle and world-view. Because the Christian has a future and a hope, and he knows that the future is more important than the present, he is willing to sacrifice enormously in the present for the sake of the future.

Athenians have no future and therefore no hope. They have only the present. The idol of entitlement requires constant obeisance and worship: "I will have it; I will have it now; and you will see that I get it". In the end, Athenian society will crumble into grinding, degraded impoverishment. Only the Gospel of the Lord Jesus Christ can prevent the inevitable outcome.

Thursday, 25 December 2008

A Christmas Benediction

Best Wishes to our Readers

On this day of Advent, 2008, we wish all of you the ultimate blessing and felicity--to have and know the favour of the Living God. In the words of Job, "though He slay me, yet will I trust in Him."

May the Lord bless you and keep you.
May the Lord make His face to shine upon you, and be gracious to you.
May the Lord lift up the light of His countenance upon you and give you peace.

JT

Wednesday, 24 December 2008

Partying On into the Wee Hours

The Debtor Nation

New Zealand's Current Account figures for the September quarter were released recently. Now the current account statistic is not widely understood, nor popularly followed. Over recent years, while our country has been running an awful deficit, international financial markets have not reacted. It has been largely ignored.

So the party has gone merrily on, into the wee small hours and no-one has cared too much.

Put simply, the current account represents the value of a nation's exports versus imports. If the balance is negative—that is, in deficit—it means that as a nation we are spending more than we are earning. Our imports are costing us more than our exports are earning. And the imports have to be paid for in some way. Over time, if a nation runs persistent current account deficits, they will have to be paid for by “others.” Our imports will need to be funded by borrowing or raising equity capital offshore.

So, the current account is a proxy statistic for whether we as a whole are saving more than we are spending, or whether we are spending more than we can save. New Zealand has been running a balance of payments deficit for decades--which means that we have been living in an increasingly foolish paradise. The Reserve Bank provides a data series going back to 1994. In those “good old days” the account was negative, but it represented only 3.6% of our gross domestic product (that is, all the goods and services which our economy produced in a year). The current account has been in deficit every quarter since 1994. Now it represents 8.6% of our gross domestic product. This is “danger territory.” Yet still the party goes on.

Brian Fallow commented recently that the accumulated current account deficit means that foreign claims (or our national indebtedness) exceed New Zealand investment abroad by $166m, or 92% of GDP—which is very high by international standards. Comparatively, this is like having a mortgage that is equivalent to 92% of your annual income.

Now this may not seem like much. But when you get a persistent structural deficit—such as we now face in New Zealand—each quarter we are increasing our mortgage to fund our lifestyles. This cannot continue indefinitely: in the end the economy will implode in upon itself. New Zealand will be bankrupt.

More concerning is that 93% of the current account deficit ($154 billion) is debt—the majority of which is short term. So, in other words, New Zealanders are borrowing to fund their lifestyles. They borrow from the banks: the banks borrow offshore—and that is how we finance our persistent current account deficit.

Now, there is a justification for borrowing at times. If we are borrowing to invest, so as to increase our productive capacity, the increased production should eventually enable us to pay down the debt. But as a nation New Zealand has borrowed to spend: to buy larger, more luxurious houses, better house fixtures, gardens, holidays, and consumer goods. This they have equated with the "good life". They have used debt (backed by the apparent “certainty” of ever rising house prices) to fund their lifestyles.

While money was freely available overseas, and while interest rates were low, the country could party on. But neither is the case now.

When the government tells you that New Zealand is well placed to navigate its way through the current global economic recession it is either in denial or it is deliberately gilding the lily. We are facing some very difficult times.

What needs to happen? To correct this imbroglio in which we find ourselves, we need to reverse the situation of being in a long term current account deficit. To do this, debt-fueled consumption needs to reduce not just temporarily but permanently. Consumption out of cash surplus is one thing; consumption funded by debt is something entirely different.

Simply put, New Zealanders need to reduce their debt and save more. This will necessarily mean that most need to accept a lower standard of living for a long time to come. Then the import bill will reduce; the current account will move into surplus. As a nation we need to run a structural current surplus for over fifteen years to have any hope of moving out of international indebtedness to international credit.

The likelihood of that occurring, without some very severe dislocation and a full-blooded economic depression, is about zero. We live amidst a pervasive culture of entitlement. People actually believe that they are entitled to a certain standard of living: it is theirs by right. If they don't achieve it, the government is to blame. The recent election was fought and won on this premise: the whole debate was about which party offered the best policies to maintain our living standards. Political power and political survival depends upon it. In our secular hedonistic country, "moving to the centre" politically means adopting an ideology of government responsibility for everyone's standard of living.

Thus, the government of the day will move the earth (“whatever it takes”) to protect the lifestyles of New Zealanders--or face electoral oblivion. This means that lifestyles will not change in any substantial way. Spending to support current living standards will continue apace. Current account deficits will continue to expand exponentially--until . . .

Yes there could well be economic shocks that could force a drop in living standards—at least for a time. Maybe the currency will eventually drop through the floor, going below the US forty cent mark. Sooner or later the world financiers are going to take off their rosy coloured spectacles when they consider things Kiwi. The price of imports would then rise substantially. This would substantially reduce our lifestyles. But can't you just here the swelling torrent of public discontent, as the eyes start to look to Wellington for relief.

Were the price of oil to rise to its alleged market neutral position of around $50 to $70 US dollars per barrel, we would see significantly higher prices for petrol here—this time exacerbated by a lower dollar. Imported rising costs will force lower living standards—which would be a very good thing. However, the government will inevitably respond to this political threat by “taking actions to preserve New Zealanders' standards of living.” To the current account deficit will be added another equally pernicious form of debt: government debt.

We expect that the populist National government, elected on a platform of preserving the living standards of New Zealanders through the politics of entitlement, will blink. Government debt will skyrocket. To the present mountain of private consumption debt is likely to be added another mountain of debt--government debt.

Can we navigate our way through the Scylla of falling world demand for our agricultural products and the Charybdis of debt based consumption? Can we make the necessary adjustments so that we start to produce enough goods and services to pay our way in the world? It is not likely. The habits of debt fueled consumption are too self-gratifying to break easily. We may be able to muddle through—but only to put off the day of reckoning for a time.

In the end, the piper will have to be paid.

Tuesday, 23 December 2008

Temperature Roundup

It's a White Christmas

Bitterly cold storms have been sweeping across the United States. President Elect Obama promised during the campaign, at some of his more grandiose moments, that his selection as presidential candidate marked the time when the planet would begin to heal, the oceans cease to rise, and the world would begin to cool.

Well, you have to hand it to him. Without passing one piece of legislation through Congress or promulgating one Federal regulation his world (the United States) is facing an extraordinarily cold winter. And so is Europe, the UK, and China.

Chicagoans are trying to cope with 30 degrees below freezing. Maybe its got something to do with corrupt political machines--a speciality of the region. "Bone numbing" cold has been felt not only in the Midwest, but in New England. Seattle was hit by a rare snowstorm over the weekend. Even Las Vegas was visited by the white stuff.

According to Joe Bastardi, Europe and the UK are also facing a severely cold winter. He writes:
SEVERE COLD WAVE TO HIT EUROPE

The development of a major blocking high pressure system over the north atlantic and its subsequent backing west is about to throw most of Europe into the coldest winter weather pattern in many a year. In fact, Temps over the next month or so are liable to average 6-10 degrees F below normal over the center part of the continent with the northwest coldest last, but still getting into the games. Intuitive with this is the likelihood of more than normal snow and ice. As the upper block backs west, arctic discharges from the north and east are liable to bring shots of severe cold back into England and with it enhanced snowfall.

While it has been "chilly" so far, what is about to come is the worst in many a winter, perhaps the sign that the warm AMO is reaching its maturity. The US winter has been much like those around 1950 which was the benchmark winter in the pac northwest of the US and was the warning shot that the warm cycle of the 30s 40s and 50s was starting its end game. It should be comforting to people worried that we are pushing our planet over the edge that things that happened before are happening again, though the discomfort caused by cold is a big problem.

I wish to point out, with no malice intended, that the two countries who have major scientific organizations that have been pushing the global warming idea, Britain and the UKMET and the US with NOAA have been burned by the cold that has developed here. NOAA had a December forecast for a warm central US for November that they were forced to revise and the UKMET forecast for a rather bland winter for Europe speaks for itself. Its anything but bland, whether it averages out near the average or not, because what is coming has not been seen in years.

Now that could mean that its testimony to how warm it is... it hasnt been seen in years. But the fact it hasnt disappeared completely, the fact it is coming back and catching people off guard (hopefully not you) means there is no rout on, but plenty of doubt. If an enemy is vanquished, it should not be able to launch attacks of this magnitude.


Now, it is worth while keeping in mind that the coldest months in the Northern Hemisphere usually come after Christmas (January/February)--so winter this year is shaping up to be a real doozie. Canada is looking like it will have an all-white Christmas--the first since 1971.

And let's not forget China. Remember the once-in-a-hundred-year snowstorm there last year. Well, it looks as the centuries pass quickly in the Golden Kingdom. Already Beijing has recorded its coldest December temperature for 57 years. My--how a hundred years flashes by when you are not paying attention.

Maybe the Chinese should double up on their coal-burning power stations and put a bit more CO2 out into the atmosphere to warm things up a bit.

Monday, 22 December 2008

Meditation on the Text of the Week

The Day of Visitation

But when the fullness of time came, God sent forth His Son, born of a woman, born under the Law, in order that he might redeem those who were under the Law, that we might receive the adoption as sons.

Galatians 4: 4—5
We come now to Advent, which is the most significant event in all human history. It occurred at precisely the right time—the time appointed by God, when all was ready, when all had been prepared. The Scriptures provide some insight into what it was at that time which constituted the “fullness of time”. One is that the fullness of iniquity of the Old Covenant people had been reached. He Who was set to divide Israel, Who had been appointed for the rise and the fall of many amongst God's people, came forth when Israel's sin was at its zenith: they would arise and crucify Messiah as the ultimate expression of hatred and rebellion against the God of their fathers. God's wrath would consequently fall upon them, and not one stone would be left upon another.

As Simeon prophesied over Jesus to Mary, “Behold this Child is appointed for the fall and rise of many in Israel, and for a sign to be opposed—and a sword will pierce even your own soul—to the end that thoughts from many hearts may be revealed.” (Luke 2: 34—35) When John the Baptist began his public ministry preparing the way of the Lord, he warned about the wrath that was to come; the axe had already been laid at the root of the trees; every tree that did not produce good fruit would be cut down and thrown into the fire. (Luke 3: 7—9) And so it came to pass.

Another aspect of readiness, of the fullness of the times, was the desperate degeneracy of the Gentile world. The futility, the emptiness, the hopelessness of life apart from God was increasingly self-evident amongst the Gentiles. The glory that was Rome had progressively degenerated into a bitter mockery. The gods had failed. The philosophers had proved futile and irrelevant. The empire was a growing tyranny, requiring more and more slaves to feed and sustain its life of conspicuous consumption and insatiable appetites.

Many Gentiles, having realised the emptiness and futility of their lives, had come to yearn for the Living God. The synagogues throughout the Empire were filled with “God-fearers”—men and women who were longing for God—the One True and Living God—and who, therefore, began to associate with the hated and despised Jews, who were His people. These people did not wish to become Jews—but they longed for the God of the Jews. They were longing for the Gospel of God's grace to come to them. They yearned for the face of God's mercy to be shown to them. Would there ever be a time when the God of glory would lift up the eyes of His countenance upon them, and grant them peace?

In Christ, the Lord it would come to pass. In Him they would hear of, and see, God's mercy. He would open His arms wide and bring them into His fold, naming them amongst the descendants of Abraham, His friend. His blood would be shed for them, washing away all their sins, cleansing them utterly. On the Cross, He would bear the sins and their curse for all His people amongst both Gentiles and Jews. He would break down the dividing wall, and His blood sacrifice would make the two into one. He would adopt them all as sons and daughters. A new humanity would be created from the inside out.

Now, two millennia later, the Gospel of our Lord has spread to every land and His enemies are ineluctably being subdued and placed under His feet. What we have seen is just the beginning. The earth will be filled with the knowledge and glory of God, as the waters cover the sea. For His people, there is joy and hope even amidst the wretchedness of Athenian boasting and tumult. As the hymn puts it:
Heav’n above is softer blue,
Earth around is sweeter green!
Something lives in every hue
Christless eyes have never seen;
This world does not belong to Athens, but to Christ. He has bought it with a price unimaginable. His price has been accepted by God the Father. Not one drop of that precious blood will have been shed in vain. Athens will attenuate and die; evil and suffering will cease. The gift of faith will be granted to all the nations. The Gospel will come to be heard by all and believed by most in every place.

As the great Athanasius once put it: Christ's taking human flesh and blood, heart and mind is akin to an exalted monarch visiting a tiny, insignificant village. Such a visit from great royalty results in an honour falling upon that village which lasts forever, as long as it kept in living memory. So, humanity and this world has been honoured, glorified, dignified and exalted before all the heavens, for He has not only visited us, He has become one of us, one with us. Messiah is now blood of our blood; flesh of our flesh: in His flesh He stands at the right hand of God, seated upon the throne of His father, David. There is no king like Him, nor will there be after Him. All heaven bows to Him and worships before Him. All earth is following in its train.

Nothing on earth was ever the same after that fateful day when Messiah came forth, born of a woman, born under the Law. Praise and thanks be to God and to His Christ; on earth, may His peace come to all men.

Saturday, 20 December 2008

The S-Files

Getting One In for the Working Class

Contra Celsum feels compelled to nominate the NZ Maritime Union for an S-Award

The Maritime Union recently threatened strike action. The reason was to protest the actions of the New Zealand Police in receiving information from a paid informer. Amongst the information was intelligence upon various unions—including the Maritime Union. The Union said that unless it received a full explanation and apology from the Police, it would call its members out on strike in protest.

Citation:

The strike threat system at best represents legally sanctioned extortion or stand-over tactics. At worst it is anarchistic and destructive to social order and peace. Either way, it always involves theft—taking or damaging the property of others against their will. It always involves breach of contract. The strike threat system is intrinsically evil. Regardless of what malodorous practice an employer engages in, the strike only compounds the evil because two wrongs do not make a right. You cannot do evil that good may come.

Every now and then the strike threat plumbs new depths of inanity. The NZ Maritime Union has made itself eligible for an S-Award because its mangled reasoning on the recent NZ Police spying scandal represents scraping the bottom of the barrel of foolishness.

There are many legitimate questions to be asked and answered over the NZ Police using an informant to infiltrate left-wing protest groups and inform on the activities of their members. Since some of the individuals involved in these groups have committed crimes in the past (the destruction of the property of others as part of their “protest” action is well documented), and since the protest groups potentially represented a conspiracy to commit crimes in the future, there is an arguable case for infiltration and intelligence gathering. Undercover work has long been a recognised and legitimate policing action.

But if, as it now seems, the intelligence gathering has extended to groups not (at least prima facie) involved in either criminal acts or conspiracies to commit crimes, serious issues emerge—which must be faced. Thus far, we understand the ire of the Maritime Union.

What is both inexplicable and stupid is to contemplate and threaten to strike if the police do not provide satisfactory answers. Why, one asks, should union members forego income over an issue unrelated to them or their families? Why should their employers suffer damage and loss of income because of the actions of the New Zealand Police—actions which are completely unrelated to shipping companies and transport company shareholders? Why damage the property of others?

The attitudes of the Maritime Union only serve to provoke additional doubts and questions. If they are so prepared to use the strike weapon to inflict damage on others, even their own members, for retaliation or “getting their own back” or making a point, or engaging in a political act; if they can so easily countenance theft or extortionant behaviour, then maybe there is some credence to the idea that they are involved in conspiracies to commit crimes and do damage to others. Maybe the Union is being run by radical anarchistic elements. Either that, or it is being run by people devoid of common sense, or of a modicum of decency, or by people who are amoral and lawless.

The Maritime Union: S-Award, Class II, for actions that have been Stupid, Short Sighted and Stupefied

Friday, 19 December 2008

Yes, But How Do we Know?

The Greatest Scam in Modern History

Regular readers of this blog will know that we regularly poke the borax at the idea that man is destroying the planet through emitting carbon dioxide into the atmosphere.

Here's a question: how do we know carbon dioxide is actually present in greater concentration in the atmosphere now, than (say) two hundred years ago. We know that we have all be told that this is the case. But how do we actually know? Well, it turns out that there is a reasonably comprehensive data set of CO2 atmospheric concentrations taken in the early nineteenth century. It is a dataset which has been deceitfully manipulated and distorted by "scientists" working with the UN climate propaganda team. You can read the full story here. However, the essence is that atmospheric carbon dioxide concentrations have not--repeat, not increased over two hundred years.

Anthropogenic global warming is shaping up to be the biggest scam of modern history, if not of all time. Global warmists are the contemporary version of the late medieval flat earthers, or the alchemists.

Thursday, 18 December 2008

It's OSH B'gosh

Pervasive Irresponsibility

We recall several years ago a motorist pulled into a service station. After the attendant put gas in the car, the motorist asked him to check the oil and water. “Sorry, sir,” said the attendant. “I can check your oil, but I am not allowed to check your water.” When queried as to why not, the attendant replied that they had recently had a visit from Occupational Safety and Health (“OSH”) inspectors. New regulations forbade the employees checking the water of customer vehicles. The owner of the service station faced prosecution if he did not comply.

The logic of this inanity is obvious if you accept the false religion of Athens. The State (that is, collective Man) has the authority and ability to create a sinless world, without imperfection. The utopian notion of human perfectability leads to a relentless and reckless pursuit of a world in which there is no harm, no danger, and in which all accidents are regulated out of existence. Thus, it becomes the duty of the State, not only to punish the reckless and careless who do harm to others, but to prevent any such things ever happening. So, the Occupational Safety and Health Directorate in New Zealand was born.

Gradually, the Directorate has been working through all occupations, jobs, employers, and work situations identifying risks to employees' health and safety. An extensive bureaucratic plan for each occupation/work place is required to be drawn up—identifying risks to health and safety, creating a mitigation plan, and ensuring that the mitigation plan is carried out. The more the Directorate delved, the more risks became apparent. The more rules, regulations, and bans were required.

In the case of our forecourt attendant, it turns out that service stations had been checking the water levels of cars since the automobile was first invented. It was part of the service. But the bureaucratic inspectorate at OSH eventually got around to working out that sometimes cars overheat. When that happens, removing the radiator cap can cause severe burns as a result of scalding steam and boiling water gushing out. Clearly this was an occupational safety issue. In the relentless and irresponsible pursuit of building a perfect world in which accidents are prevented by dictate, fiat, and regulation, the practice of checking water in the cars of customers has been banned.

The outcome of the OSH regime has been an ever encroaching, burgeoning, bloating, bureaucratic boondoggle over all of life. The economic cost to the nation is incalculable—it could only ever be roughly estimated, but it is huge. Service declines. Productivity falls. The costs of production rise. Inefficiency rises. Our exporters are made less competitive. Receipts and incomes attenuate. And this is just the economic cost.

There are other destructive effects from the OSH regime. Firstly, by seeking to remove risks from life, it encourages successive generations of pale and insipid human beings—forever fearful, forever looking to the State to protect them, forever looking for an existence cocooned in cotton wool. Mitigating and triumphing over risks by responsible calculation of those risks and effective action is replaced by a querulous demand that risks be removed before one acts. The notion of taking reasonable risks to capture reward is frowned upon.

Secondly, society as a whole becomes far less adaptive. Risks, taking risks, and facing risks—and experiencing the bad consequences when accidents and bad outcomes occur, is one of the essential ways to learn—and learn quickly. Non adaptive societies and cultures decline over time.

Thirdly, it creates a culture of widespread irresponsibility. The “buck”, as it were, no longer stops with me, but with the bureaucratic plan. If there is a failure, compliance with the plan is the appropriate and reasonable defence. “It is not my fault,” is the background choral litany of the OSH regime.

Fourthly, it has no limits upon the relentless extension of the power and interference of the State. Every accident becomes sufficient justification for the promulgation of dozens of new regulations not only in the specific workplace or industry, but in many other workplaces and industries, and on into schools, pre-schools, the health sector, local government, community organisations—all become more successively subject to the pervasive bureaucratic plan.

Athens is a deranged city—and nothing demonstrates its “sandwich short of a picnic” state than the OSH regime. It is symptomatic of the madness and spiritual blindness which pervades Unbelief. Athenian culture has collectively become like Nebuchadnezzar: unkempt, mad, growling in the fields, and eating grass like the beasts.

How does Jerusalem approach such things? That holy City starts from the premise that the world is imperfect and evil is intrinsic to it. Accidents happen. Even when there is no malicious intent, untoward outcomes can result. People can act, prepare, and plan with the utmost commitment to responsible behaviour, and still people can suffer damage and harm.

Secondly, the Christian faith insists upon moral accountability and responsibility. The buck stops with everyone.

Moreover, sinful human beings will be tempted to act irresponsibly. There can be a thousand signs up warning against swimming in a certain place, and some will deliberately take this as a provocation to swim in that precise area. Those who act irresponsibly deserve all that happens to them.

When irresponsible actions lead to damage and harm of the innocent, civil and probably criminal liability should result. The judges and the courts are in place to assess precisely that matter. Holding people accountable for their actions is far more godly than a vain and stupid attempt to force people to be responsible through a preventative bureaucratic plan. Forcing responsible behaviour is an oxymoron.

Employers clearly have a duty of care to their employees and their customers. It is part of loving one's neighbour as oneself. Instructing and training employees in responsible behaviour when facing risks at work goes a long way to fulfilling that duty of care. Instruction sheets and warnings to also customers also go a long way to fulfilling duty of care. Employees, for their part, have a duty of care to the employer, his property, and his customers. They also have a duty to act responsibly. If they fail in their duties and suffer bad consequences, they deserve it.

Over time, a body of judicial precedent builds to provide guidance. But the parameters within which the body of precedent is built up need to remain clear and inviolate: the duty of care is a universal verity for all individuals. The weighing and sheeting home of respective responsibility is the duty of the courts.

Wednesday, 17 December 2008

Miscellany

Mid-Week Roundup

Fred Thompson: Political Satire at its best

At the head of our Midweek Miscellany is a video commentary by Republican presidential candidate, Fred Thompson on the US (global) economic calamity, seeking to rouse support for the government programme. An excellent performance. Link here.

Reality Beginning to Bite

The Wall Street Journal contains an op ed piece on the rapid shift away from climate change splenetic in Europe. Apparently the ground is shifting faster than you can say "AGW", particularly in Germany that long-term bastion of greenist politics. We reproduce the full article below.

Cooling on Global Warming

Germany and the rest of Europe are getting more rational on climate change.

By BENNY PEISER | From today's Wall Street Journal Europe

Participants at last week's United Nations climate conference in Poznan, Poland, were taken aback by a world seemingly turned upside-down. The traditional villains and heroes of the international climate narrative, the wicked U.S. and the noble European Union, had unexpectedly swapped roles. For once, it was the EU that was criticized for backpedalling on its CO2 targets while Europe's climate nemesis, the U.S., found itself commended for electing an environmental champion as president.

The wrangle over the EU's controversial climate package at a separate summit in Brussels wrong-footed the world's green bureaucracy. The EU climate deal was diluted beyond recognition. Instead of standing by plans to cut CO2 emissions by 20% below 1990 levels by 2020, the actual reductions might be as trivial as 4% if all exemptions are factored in.
In recent days the greenist propaganda organs have been trumpeting the significance of the EU climate agreement. They forgot to tell the world about the small print. CO2 emissions targets are now mere symbolic political theatre.

The Brussels summit symbolizes a turning point. The watered-down climate deal epitomizes the onset of a cooling period in Europe's hitherto overheated climate debate. It may lead eventually to the complete abandonment of the unilateral climate agenda that has shaped Europe's green philosophy for nearly 20 years.

The reasons for the changing political atmosphere in Europe are manifold. First, the global economic crisis has demoted green policies nearer to the bottom of the political agenda. Saving the economy and creating jobs take priority now.
This underscores an oft made point. Greenism is unsustainable. It can only prosper as a political movement if it can suck leech-like off a wave of economic growth and prosperity. As soon as economic growth and development is under threat, support for greenism dissolves, and the leeches drop off. This explains why greenist causes are unable to gain any traction in the under-developed economies of the world.
Second, disillusionment with the failed Kyoto Protocol has turned utopian thinking into sobriety. After all, most of the Kyoto signatories failed to reduce their CO2 emissions during the last 10 years. There are also growing doubts about the long-term viability of the EU's Emissions Trading Scheme. The price of carbon credits has collapsed as a result of the financial crisis. The drop in demand and the recession are likely to depress carbon prices for years to come. As a result, the effectiveness of the extremely volatile scheme is increasingly questioned.

Third, a number of countries have experienced a political backlash over their renewable energy schemes. Tens of billions of euros of taxpayers' money have been pumped into projects that depend on endless government handouts. Each of the 35,000 solar jobs in Germany, for instance, is subsidized to the tune of €130,000. According to estimates by the Rhine-Westphalia Institute for Economic Research, green subsidies will cost German electricity consumers nearly €27 billion in the next two years.

Perhaps even more important is the growing realization that the warming trend of the late 20th century has, for the last 10 years or so, essentially come to a temporary halt. The data collected by international meteorological offices confirm this. This most peculiar fact is rarely mentioned in policy debates, but it certainly provides decision makers with a vital respite to reconsider their climate policy options.
Yes. A most peculiar fact indeed. It is hard to get an electorate wound up to the point where they want to pay exorbitant costs to combat global warming while they are freezing to death.
Above all, Europe's politicians have recognized that green taxes have turned into liabilities that may undermine economic stability and their chances of re-election. As German radio Deutsche Welle put it last week: "With the recession tightening its grip on the German economy, [Chancellor Angela] Merkel is betting that job reassurance is more important to the average worker than being a pioneer in tackling climate change."

Nowhere has the fundamental change of the political landscape been more pronounced and less expected than in Germany. For more than 20 years, Europe's economic powerhouse has been the major bastion of green politics.

In the 1990s, Angela Merkel steered and implemented Europe's Kyoto policy as Germany's first environment minister. Now serving as chancellor, she was hailed as Europe's climate savior after playing host to last year's G-8 summit in Heiligendamm. Only 18 months later, however, she no longer wears a halo. As a result of a concerted campaign by Germany's heavy industry, as well as growing opposition from within her Christian Democratic party, Mrs. Merkel has been forced to abandon her green principles and image.

The deepening economic crisis seems to transform the mood of the German public. Next year's general election looms large, and voters right now are worried about the economy and jobs, and not green issues. In early December, more than 10,000 angry metal workers and trade unionists -- most of them from Germany -- protested outside the European Parliament in Brussels against the EU's climate policy, which they fear will increase unemployment.

For many international observers, the ease with which Mrs. Merkel overturned her celebrated climate policy has come as a shock. But she was almost the last member of her Christian Democratic party willing to accept that a change in strategy was necessary given the immense costs of the EU's original climate plans. In fact, her party demanded that Mrs. Merkel veto the climate package if German industry did not receive an exemption from the Emissions Trading Scheme's auctioning of carbon credits. The exemption was duly granted.

Perhaps the most critical factor for Mrs. Merkel's almost unchallenged about-face is the vanishing strength of the Social Democratic Party, whose members were once among the most forceful climate alarmists. Mrs. Merkel's junior coalition partner has lost much of its support in recent years. And amid growing fears of a deepening recession, there are also signs of a split within the party on climate and energy issues.
Expect that a growing number of political leaders will be seen doing a Merkel Shift in the next few years. We note yesterday John Key's aligning New Zealand with the cautious, "toe in the water" Australian approach to "combatting" global warming--as propagated by Kevin Rudd. Compare Key's flagging ardour with his statements on the issue six months ago and we begin to see evidence of a distinct cooling, a Merkel Shift, emerging.
At the forefront of the left-wing opposition to the EU's climate policy has been EU Industry Commissioner G√ľnter Verheugen. The German Social Democrat has been arguing throughout the year that the climate targets should only be accepted if "truly cost-effective solutions" could be found. Other prominent dissenters in his party include Hubertus Schmoldt, the head of the mining, chemical and energy industrial union, who has recently called for a two-year postponement of the climate package.

In part as a result of German -- as well as Italian and Polish -- objections, Europe's climate package did not survive in its original form. The inclusion of a revision clause, pushed by Italy, is particularly significant as it makes the EU's climate targets conditional on the outcome of international climate talks. If the U.N.'s Copenhagen conference in 2009 fails to seal a post-Kyoto deal, it is as good as certain that some of the EU's targets will be further cut. By linking its decisions to those of the rest of the world, Europe has begun to act as a more rational player on the stage of international climate diplomacy.

Instead of yielding to the siren calls of climate alarmists, European governments would be well advised to focus their attention on developing pragmatic policies capable of safeguarding their industries, labor forces and environment at the same time.

Mr. Peiser is the editor of the international science policy network CCNet.

Wasted Lives

If you want advance notice of where the New Zealand state education system is going, take a look at the UK. The Economist recently lamented a missed chance to make "hard choices" about what children should be taught.

In New Zealand we have teachers and teacher unionists complaining about curriculum inflation. We have not seen anything yet. We reproduce The Economist article below:

IF YOU are in your 40s and British, it is quite possible that your spelling is an embarrassment. You may never have been taught the distinction between “there”, “their” and “they’re”, or perhaps even your times tables. If you moved house during your primary years you may have entirely missed some vital topic—joined-up writing, say. And you may have struggled to learn to read using the “initial teaching alphabet”, a concoction of 40 letters that was supposed to provide a stepping stone to literacy but tripped up many children when they had to switch to the standard 26.

Those days of swivel-eyed theorising and untrammelled experimentation—or, as the schools inspectorate put it at the time, “markedly individual decisions about what is to be taught”—ended in 1988 with the introduction of a national curriculum. But though that brought rigour and uniformity, it also created an unwieldy—and unworldly—blueprint for the Renaissance Child. Schools have struggled to fit it all in ever since. Now, 20 years later, the primary curriculum is to be cut down.

In January the government commissioned Sir Jim Rose, a former chief inspector of primary schools, to trim ten existing required subjects to give extra space to computing skills and to accommodate two new compulsory subjects: a foreign language and the now-optional “personal, social, health and economic education” (eating fruit and veg, refraining from hitting one’s classmates and much more). On December 8th he published his interim report—and many fear that, as well as losing fat, education will see a lot of meat go too.

Sir Jim proposes merging the subjects into six “learning areas”. History and geography will become “human, social and environmental understanding”; reading, writing and foreign languages, “understanding English, communication and languages”. Physical education, some bits of science and various odds and ends will merge into “understanding physical health and well-being”, and so on. His plan would “reduce prescription”, he says, and, far from downgrading important ideas, “embed and intensify [them] to better effect in cross-curricular studies”.
We can expect similar outcomes in New Zealand. Attempts to focus and narrow down the curriculum will result in fewer, but broader subject categories, leaving the same mess intact.
Learned societies are livid. “An erosion of specialist knowledge,” harrumphs the Royal Historical Society; its geographical counterpart is worried about “losing rigour and the teaching of basics”. Even those with no brief for a particular subject are concerned. Pouring 12 subjects into six “learning areas” is not the same as slimming down; if the curriculum is to become more digestible something must be lost, and just what is being glossed over. “Wouldn’t it be better to address the question of subjects directly—which ones, for how long and what to specify?” asks Alan Smithers, of Buckingham University.

One answer is that making hard choices openly would provoke complaints that the curriculum was being dumbed down. Attempts to cut it outright would run counter to powerful forces, as politicians look to schools to solve myriad social ills—from obesity to teenage pregnancy to low turnout in elections—and to pick up the slack left by poor parenting. But Sir Jim’s prescription indicates more than the difficulty of his job. He has been asked to solve tricky educational conundrums before and, every time, he has managed to catch the prevailing political wind.
Ah yes. As long as the Athenian fallacy of reductio ad educatum remains regnant there will be no genuine reform in the state education system. The school system has become increasingly an extension of the Ministry of Social Development. One cannot see how that will ever change whilst Athens clings to its empty idols. Expect that in time in New Zealand the Department of Education will be subsumed under the Ministry of Social Development--or something similar. Britain has already done this.
In 2006 he reviewed reading tuition, and plumped for the back-to-basics “synthetic phonics”—to the delight of a government already mustard-keen on the method. In 1999 he answered “no” to the charge that rising exam results were a sign of less exacting exams rather than of better teaching. In 1991 the Tory government of the day was equally thrilled to be told that primary education had become too progressive.

This time, too, Sir Jim has captured the Zeitgeist. Synthesis and cross-cutting are once more fashionable in educational circles: since July 2007 England’s schools have been overseen not by an education ministry but by the Department for Children, Schools and Families, which is responsible for pretty much everything to do with young people, from health to criminal justice to learning. (The three other bits of the United Kingdom—Scotland, Wales and Northern Ireland—go their own way on education.) Primary schools were turning away from discrete subjects even before he pronounced: a 2007 survey found a third taught mostly “themed” lessons; another 40% were planning to do so soon. Another recent review, this time of what 11-14-year-olds should learn, also plumped for more cross-curricular learning.
Themed lessons are now the coming "vanity du jour" in New Zealand state educational circles as well. Hard subject content is being filtered by abstract themes (love, joy, peace, goodness--whatever) so that literature and mathematics become merely illustrative of a theme. The subjects themselves are not taught honestly or rigorously. "Two plus two" becomes an illustration of the themes of order or regularity or social conventions--but as a construct fundamental to the subject of mathematics it is not.
Many countries’ curriculums consist of high-flown descriptions of the paragonic citizens that education is meant to help produce, couched in impenetrable educationalese. But alongside are usually some hard facts: which textbooks to use and how many hours to devote to each topic, for example. England’s lacks such a crib sheet. Schools can choose their own texts, even write their own, and apportion the school day as they please. Exams come in competing varieties from independent exam boards that must, like teachers, read between the lines to figure out what is meant to have been taught. That leaves England particularly exposed to the consequences of curricular woolliness.
NCEA in New Zealand has produced many unintended consequences--curricular woolliness is one of the most prominent. This charge will arouse indignant ire amongst professional state educators, since the system was designed to reduce all curricular subjects to precise "learning" bits which could be measured. As always happens, the law of unintended consequences wins out when the State seeks to operate in areas beyond its sphere of competence. Education is no exception. NCEA has facilitated the burgeoning range and number of subjects that can be taught--that is, curricula inflation--and has replaced a hard focus upon subject content with the facilitation of achievement testing.
Despite seeming vague, though, national curriculums do often encapsulate some aspect of national ideals. France’s is explicit about the primacy of la belle langue; Sweden’s elevates equality above all other virtues; Japan’s, love of country. That these match stereotypes so well suggests that they capture a national spirit, or create it, or a bit of both—and raises a worrying question for anyone looking at England’s proposed mishmash of a new curriculum.


Tuesday, 16 December 2008

ChnMind 2.19 The State in God's Kingdom

Leviathan or Minister

In this series of essays on the constitution of God's Kingdom upon earth we have been reviewing the Constitution of the Kingdom—which is found in Holy Scripture. We are seeking to set all this before us because we have a duty to work in the Kingdom as servants of the King—which is to say, we have a duty to pray and labour diligently to bring His Kingdom into greater and greater reality in the world.

Before we turn to the role of the State within God's Kingdom, let us review the core propositions we have discussed to date:

1. The Kingdom of God has come: it has been announced and established within human history by the Lord Jesus Christ.

2. The Kingdom is universal, and will extend its sway over every nation, tribe and tongue of the earth. All the nations of the earth are to be discipled unto Christ.

3. The King of the Kingdom is the risen, enthroned Lord Jesus Christ: all authority has been given to Him, and all enemies upon the earth and in the heavens are to be placed under His holy feet.

4. The essence of the Kingdom of God is the kingship of Christ Himself. His rule is both totalitarian and universal. He rules over the thoughts and intents of every human heart; over family;over the Church; over commerce; over health, education and welfare; over the courts of justice and the judges; over armies—over all human existence, individual, corporate and institutional.

5. The coming of His Kingdom involves the progressive self-conscious willing submission and service of all these institutions—even the whole creation—to His reign and service. As the Kingdom comes, all facets of human culture move from rebellion and unbelief to a willing submission and service to the King, so that each facet seeks to serve Him, adopting His goals, His motives, and His standards for all that they are and do.

6. The Kingdom of God, therefore, does not reflect minimal government, but maximal government by our Lord. However, His government (from a human perspective) is delegated to a wide range of human institutions and facets, from individuals governing themselves under Christ right through to the broadest institutions such as the Church or the State. Each has its roles and their responsibilities. Each has its duties and tasks. The foot cannot say to the eye, move over—we have no need of you. Each is to play the part that the Lord has assigned; as a consequence society under the Kingdom's realm ends up working cohesively and co-operatively together, “naturally”, so to speak.

The Family is complementary to the Church and the State. The Church complements the Family and the State. And the State, for its part, supports and complements the work and roles of both Family and Church.

7. The Kingdom comes gradually, incrementally, and by Spiritual means. It is only as the Holy Spirit works within hearts, families, churches, and other institutions that true and extensive obedience to Christ can occur. But this fact also ensures the inevitable progress and growth of the Kingdom, for none can stay His hand.

8. The Kingdom of God upon earth has three core institutions and many subsidiary and derivative institutions. The three core institutions, according to Scripture, are the Family, the Church, and the State.

9. The role of the Family is to be the institution which is the seed institution of all the other Kingdom institutions. It is our first church, state, school, and business enterprise. It mirrors the love between Christ and His Church. A prime duty of the Family is to bear and raise children as servants of the Lord. It is responsible for the care, provision, and nurture of all household members. It is focused upon nurturing and training so that all its members move from immaturity to maturity.

As the seed institution all the other parts of the Kingdom depend upon godly and disciplined families. When the Kingdom has powerfully in our families, both the Church and State will likewise become holy, righteous, and powerful. Neither the Church nor the State can rise above the holiness and discipline of our families. Nor can they substitute for or replace the vital and essential role of families in building and upholding God's Kingdom upon the earth.

10. The role of the Church is to bear the keys of the Kingdom. To the Church has been given the responsibility to proclaim the Gospel and teach the Scriptures with all the power and authority of Christ Himself. As it faithfully proclaims and administers the Gospel of Christ to the nations, the Church binds and looses upon earth what has already been bound and loosed in heaven.

The Church also has the responsibility to administer the sacraments of the New Covenant, which are the Lord's Supper, in replacement of the Older Covenant Passover, and Baptism, in replacement of the Older Covenant circumcision.

We will address the roles and responsibilities of the Church in greater detail in forthcoming posts.

The role of the State is, in one sense, very limited and narrow within the Kingdom. It is to administer both civil and criminal justice. It is vital that the State restricts itself to its God-given duties and forfends interfering in any of the duties which belong to Family or Church or their subsidiary institutions.

The reason is that the power and authority of the State is external force. If wrongly used, the State has the power to destroy and enslave. Because it is entitled by God to use force, it has within its grasp the means of attacking and enslaving both Church and Family--which cannot resist, because they have no weapons to match the force of the State.

The authority of the Family is limited by time: children grow to become adults, and they are commanded to leave their families and cleave to their spouses. The authority of the Church is limited to the Keys of the Kingdom: it proclaims and teaches the truth, but it cannot force it upon people. It cannot make people become believers: it remains utterly dependant upon the Spirit quickening the Word in the hearts of people, even as the Church proclaims it. But the State's authority is both perpetual and compulsory: if it does not carefully restrict itself to the administration of justice only, it will quickly end up attacking and devouring both Church and Family. The State is to be feared not only for the authority it bears, but for the evil which it can do.

Therefore, within God's Kingdom the State is both feared, but also fearfully proscribed and limited.

The State cannot change the heart, the inner man. It can only deal with outward actions; it can only administer outward restitution and justice. The State does not control the Keys of the Kingdom of heaven. It does not have the authority and power of parents to shape the minds, hearts, and lives of the children. Whenever it acts, because its instruments are blunt, external, and necessarily crude, it cannot redeem, it cannot heal, it cannot restore—it can only punish. The State cannot do anything without punishing someone or something. This is an inevitable result of being the institution of compulsion and force.

Of course the modern Athenian State has long since sought to crush both Church and Families and bring all under its Mordor-like sway. It has long since forgotten that even when it sets out to do so-called positive good, like provide education for children, it cannot make suggestions—it must compel, force, and command. Thus it punishes families which want to obey God and take responsibility—even as God has commanded—for the education of their own children. The State punishes such families by forcing them to pay twice: it extracts taxes to pay for its own ungodly education system; and requires them to pay again for their own children's education. This double-charge amounts to a fine levied upon those families who wish to serve God. Whenever the State does anything, it cannot avoid punishing someone, because its decisions and dictates are not suggestions, but dictates of force. If you disagree, or if you resist, you will be punished. The State, by definition, knows no other way.

However, despite having become a deformed gargoyle, the State bears great honour and dignity. The classical passage in our Constitution regarding the role and responsibility of the State is found in Romans:
Let every person be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God. Therefore he who resists authority has opposed the ordinance of God; and they who have opposed will receive condemnation upon themselves.

For rulers are not a cause of fear for good behaviour, but for evil. Do you want to have no fear of authority? Do what is good, and you will have praise from the same; for it (the State) is a minister of God to you for good. But if you do what is evil, be afraid; for it does not bear the sword for nothing; for it is a minister of God, an avenger who brings wrath upon the one who practices evil.
Romans 13: 1—4

Twice, Paul declares that the State is a minister of God Himself. (The word used is the same as we use for “deacon” or a “minister” in a Church). He asserts this minister administers (does its work) by force (the sword) which ultimately is the authority and power to kill the guilty and those who resist its authority. Its duty is to be an avenger of God's wrath upon anyone who practises evil. This is the only task and duty of the State within the Kingdom of God.

Within the Kingdom of Athens, the State has sought to do far more than administer justice to the wrongdoer or the practitioner of evil. In so doing, the State itself has become a practitioner and protagonist, not a punisher, of evil. In future posts, we will trace out just how corrupt, evil, and wicked the modern secular Athenian State has become. But for the moment, let us set to its record of indictment that the modern Athenian State has become a bribetaker, a corrupter of justice, a murderer of the innocent, an oppressive enslaver of its subjects, a master thief, and a corrupter of all good morals and godliness.

The modern Athenian State lives in open rebellion against the Lord, rejecting utterly that it is a minister of God. Modern governments must repent, before the whirlwind comes.

Monday, 15 December 2008

Meditation on the Text of the Week

Thy Kingdom Come . . .

There will be no end to the increase of His government or of peace,
On the throne of David and over his kingdom,
To establish it and to uphold it with justice and righteousness
From then on and forevermore.
The zeal of the Lord of hosts will accomplish this.
Isaiah 9: 7
The conflict and gulf between Jerusalem and Athens is deep: it is impossible to bridge. Ever since the Lord of glory declared that He would put enmity between the seed of the woman and the seed of the serpent, the chasm between these two cities has been irrevocable. All human history illustrates this conditioning reality.

On every “structural” issue, Jerusalem and Athens disagree and take opposite poles. But Jerusalem is the rock upon which the waves of Athens incessantly crash: it is the waves which are broken and dissipated. The rock stands firm and inviolate. Take the issue of the meaning of history. Where is humanity heading? What is the direction and purpose of human history?

To this question successive generations in Athens have offered varying and contradictory answers. At times it was fashionable within the streets of that city that human history had no telos or end: it was a constantly repetitive cycle. It represented an endless repeating pattern, with no purpose, plan or direction. The goal of each individual soul was to get off the treadmill of existence.

In later eras, Athens changed its opinion. History was presented as the case book of how Man was to triumph over Nature. Through reason, Man would learn the secrets of Nature's god, and increasingly come to master Nature. The more he mastered Nature, the more divine man would become; Nature's god was to become increasingly irrelevant. Now Athens believed that history had both direction and purpose. It had a future and a hope. All human history was moving towards the “last” perfect, completed, and self-realised Man. This captivated Athens for two hundred years following the Enlightenment—the time when such ideas were first seriously propounded.

Then Athens changed its opinion again. It became unfashionable in certain quarters to believe that the world of Nature operated according to laws, within a certain and defined structure. It no longer became an issue of Man discovering and mastering the laws of Nature on his way to higher and higher pinnacles. Man did not master pre-existing structures and laws: Man himself was the lawmaker and the lawgiver. Reality was what man said it was. History had no pattern, no inexorable laws, no purpose, no plan, no direction. Human history was what it was: the role of man in it was to let history speak for itself, with its myriad of voices, views, concepts, ideas.

In this perspective, history was replete with contradictions, conflicting views, discontinuities, and conflicting perspectives. Which is to say that mankind is replete with contradictions, conflicting views, discontinuities, etc. Thus there is feminist history, black history, working class history, Islamic history, homosexual history—they can never be reconciled, nor ought they be. They are all real, all valid. There is no “meta-narrative” linking all these together into some coherent plan or reality.

Against these increasingly disparate and diffused waves stands Jerusalem and her certain knowledge of human history. Her view of history stands radically opposed to Athenian fashions and discombobulations. Human history has a direction and plan. It is purposed from the beginning. It has a certain culmination and end. It is utterly subject to a meta-narrative—which is the Word and plan of the Living God.

Jerusalemite history acknowledges radical discontinuities. The first was the fall of our first parents into sin. This changed everything. Things continued after the Fall, but in a radically different mode. This was the first great discontinuity. The second was the crucifixion of Messiah, the Christ. This set human history on another path, radically different from the direction brought by the Fall into sin. Through the Cross and the consequent resurrection of our Lord human history took a radically different turn—back to the future.

The hold of sin was broken; the ruler of this world (Satan) was cast out; the risen, ascended Christ was invested as the Lord of the heavens and the earth, and all authority was granted to Him to rule over human history. The direction of human history was now the reconstitution of all things under Him and around Him. To this end, the universe and the world and mankind is inexorably moving. The potential residing in the Garden of Eden is now being actualised in the Kingdom of Messiah.

All tribes, all nations now have their destiny and meaning, purpose and plan in Him. They will either kiss His feet in glad and humble submission, or they will be shattered, to make way for His people and His kingdom. All His enemies are being placed under His feet.

This is what Isaiah foretold and declared seven hundred years before His entrance into the human race. There would be no end to the increase of His government and His peace. Nothing would stop it; nothing would stay His hand. The zeal of the Lord of hosts would ensure that it was done.

Jerusalem marks this great discontinuity of human history by its dating conventions. All human history before His incarnation, was dated as being BC—before Christ. All human history subsequent to His ascension was recorded as being AD—anno domini (in the year of our Lord). The years belong to Him and human history is now His history and pre-ordained destiny. [In recent years, Athenian scholars and historians have sought to gloss this reality, with BC being adapted to BCE (before the current era) and AD being changed to CE (current or common era). This “wave” also
shall dash and break up upon the rocks of Jerusalem.]

Now, in the year of our Lord 2008, we stand a mere two thousand years from His death and resurrection. His Gospel has penetrated into every land. Thousands upon thousands of people are now working as preachers of that Gospel in every continent and every land. Despite some of the most extreme and comprehensive oppression in the past century, hundreds of thousands of people are naming the Name of Christ for the first time, as they turn from darkness to light. Despite the “best” and most energetic attempts of Athens, the conversion of multitudes cannot and will not be stopped.

We are not prophets, but given the promises of God, declared through Isaiah, we expect that the next thousand years will see a wonderful expansion and consolidation of His global kingdom. We expect a recovery of classic biblical understanding and truth as the legions of converts in the Southern Hemisphere learn more and more of the Scriptures.

As we celebrate Advent this year, we need not only to thank Him for the course of His Kingdom in the earth thus far, but look forward with great hope and anticipation for the years to come.