Would Someone Please Tell That Greta Kid

We’ve Just Had the Best Decade in Human History. Seriously

Little of this made the news, because good news is no news

Matt Ridley
The Spectator


Let nobody tell you that the second decade of the 21st century has been a bad time. We are living through the greatest improvement in human living standards in history. Extreme poverty has fallen below 10 per cent of the world’s population for the first time. It was 60 per cent when I was born. Global inequality has been plunging as Africa and Asia experience faster economic growth than Europe and North America; child mortality has fallen to record low levels; famine virtually went extinct; malaria, polio and heart disease are all in decline.

Little of this made the news, because good news is no news. But I’ve been watching it all closely. Ever since I wrote The Rational Optimist in 2010, I’ve been faced with ‘what about…’ questions: what about the great recession, the euro crisis, Syria, Ukraine, Donald Trump? How can I possibly say that things are getting better, given all that? The answer is: because bad things happen while the world still gets better. Yet get better it does, and it has done so over the course of this decade at a rate that has astonished even starry-eyed me.

Perhaps one of the least fashionable predictions I made nine years ago was that ‘the ecological footprint of human activity is probably shrinking’ and ‘we are getting more sustainable, not less, in the way we use the planet’. That is to say: our population and economy would grow, but we’d learn how to reduce what we take from the planet. And so it has proved. An MIT scientist, Andrew McAfee, recently documented this in a book called More from Less, showing how some nations are beginning to use less stuff: less metal, less water, less land. Not just in proportion to productivity: less stuff overall.

Chicken Littles All

British Factories Post Best Year Since 2014

Hours After MSM Claim UK In Worse Shape Than Greece

Jack Montgomery
BreitbartLondon

Bloomberg has had to report that British factories are putting in their best showing in five years — hours after claiming Brexit Britain had fallen behind Greece to become the “Sick Man of Europe”.
The initial report, which claimed Greece is “growing faster than Britain and is outperforming it in financial markets”, was embraced by the usual suspects in the so-called ‘Remain Resistance’, who have been eager to highlight any negative coverage of the post-referendum economy in order to claw back some of the credibility they lost after the “immediate and profound shock” they predicted before the Leave vote failed to materialise.

The outlandish claims may have been a bridge too far, however, with even neutral commentators being prompted to come out and rubbish them.  “The comparison [between Greece and Britain] is irrelevant bordering on the absurd but, for the record, on the official figures published to date, Greece is not growing faster than [the] UK,” remarked BBC interrogator-in-chief Andrew Neil.  “It might in 2018/19. But then it has a lot of ground to make up, having lost almost 30% of its GDP.” . . . .

Chinese Prognosis

No Virtuous Circle of Creative Destruction

The Communist Chinese regime has had to walk a tightrope over Mao Zedong and his disastrous Cultural Revolution.  On the one hand, Mao is portrayed as the revered Father of the Nation; on the other, his Cultural Revolution is acknowledge as a cruel, barbaric fiasco.  

Associated Press has reported:

China’s official media reaffirmed on Tuesday the Communist Party’s longstanding judgment that the Cultural Revolution was a catastrophic mistake after staying silent on Monday’s 50th anniversary of the start of the decade-long upheaval.

The official party mouthpiece People’s Daily published an opinion piece on its website precisely at midnight on Tuesday unequivocally praising the 1981 party resolution that condemned the bloody political movement launched by Mao Zedong to enforce a radical egalitarianism. “Our party has long taken a solemn attitude toward bravely admitting, correctly analyzing and firmly correcting the mistakes of our leadership figures,” the piece read.

What, then, is the lesson of the Cultural Revolution?  The (official) People's Daily confirmed what the government thinks should be the "takeout" from Mao's great leap forward.

When Less is a Whole Lot More

Why the Spanish May be Better Off Without a Government

The state’s most important economic role is to get out of the way

James Bartholomew
The Spectator

On 26 October last year, the Spanish government shut up shop in preparation for a general election. This duly took place in December but then a strange thing happened: after all the build-up, the arguments, the posters and the television coverage, the result was… nothing. The various parties were so balanced, so mutually distrustful and ill-assorted that no government could be formed. Since last October, therefore, there has been no government in Spain.

One can imagine that the average political correspondent would think this a terrible problem, maybe even a crisis. The Financial Times has referred to Spain ‘enduring’ months of ‘political uncertainty’. This is assumed to be a matter requiring furrowed brows and grave tones. But the economy seems to be taking a different view of the matter. It is bowling along more breezily than in a long time. The growth rate during the final quarter of last year was an annualised 2.9 per cent, which, in these days of dismal Euro-growth, is a star performance — easily beating the pants off Italy, France and even Germany.

The improvement has continued this year. Unemployment has fallen month after month and is now down to 20.4 per cent which, though awful, is an improvement on a year ago when it was 23.2 per cent. That is a much better showing than in most EU countries.

Slinking Out the Back Door

Rising Envy

These days the Commentariat and the chattering classes don't talk so much about poverty.  They focus upon economic inequality.  Rising inequality.  (It's always rising.)  This is a classic case of misdirection.  It is also another indication of the intellectual dishonesty of many and legerdemain that passes for truth.

We see this kind of vacuous nonsense every day:

More than 300,000 Kiwi kids now in relative poverty

 The number of Kiwi children in relative poverty has jumped over 300,000 for the first time since 2010 - but it's because of record inequality, despite falling absolute hardship.  The Ministry of Social Development's annual household incomes report shows that the numbers below a European standard measure of absolute hardship, based on measures such as not having a warm home or two pairs of shoes, fell from 165,000 in 2013 to 145,000 (8 per cent of all children) last year, the lowest number since 2007.

Children in benefit-dependent families also dwindled from a recent peak of 235,000 (22 per cent) in 2011, and 202,000 (19 per cent) in 2013, to just 180,000 (17 per cent) last year - the lowest proportion of children living on benefits since the late 1980s.  But inequality worsened because average incomes for working families increased much faster at high and middle-income levels than for lower-paid workers.

The net result was that the number of children living in households earning below 60 per cent of the median income after housing costs jumped from a five-year low of 260,000 in 2013 to 305,000 last year, the highest since a peak of 315,000 at the worst point of the global financial crisis in 2010.  [NZ Herald]

Consider a model society that consists of ten households.  One household lives in squalor: it is dirty, and unkempt.  Its occupants are usually sick.  No-body works, except one who spends his days begging the other nine households for food.  Another household lives in comparative luxury.   The earnings and net worth of this household increased by two hundred percent in the last twelve months.  The remaining eight households experienced no change over the same period.  According to the egalitarians, this society has just got worse (more evil and unjust), because inequality has increased.

Most morally clear-sighted people would think it a good development if at least one household greatly increased their net worth.  But the egalitarians regard it as an evil outcome, unless every other household increased commensurately.

There are two philosophical and religious axioms underlying the cult of economic equality.

Letter From the UK (About European Ossification)

Economic Europe is paying the price for political Europe

By Douglas Carswell 
August 14th, 2014
The Telegraph

Remember what European Monetary Union was supposed to do? It was going to add zillions to Europe's GDP, they said.  According to the Lisbon development plan, by 2010, the EU was going to be "the most competitive and dynamic knowledge-based economy in the world capable".

The truth is that Europe is failing badly. At a time when the rest of the world is growing, data out today shows France stagnating. Shockingly, Italy's output is lower today than it was fourteen years ago. Even Germany is going into reverse.

Economic Europe is paying the price of ever more political Europe. Introducing layer upon layer of rules, regulations and directive is starting to ossify. Europe's economy has consistently performed worse than expected as a result of decades of dirigisme. 

Here in Britain we have nothing to be complacent about. To be sure, cheap credit is stimulating output. Combined with welfare reforms, this is driving a spectacular jobs boom. But beware.  We might be outside the euro – and therefore free to engage in our own monetary stimulus. We are not outside the single market regulatory sclerosis. The deadweight of all those directives presses down on us every bit as much as on the Eurozone. Strip away the easy money stimulus, and we're not that much better off.

For years, politicos have told us we need to be inside the European single market to prosper. So why is wealth now being created almost everywhere but inside the highly regulated single market? Those parts of the world that are flourishing somehow don't seem to struggle to sell either inside or outside Europe.

It is not only European monetary union we ought to steer clear from.

 

Letter From America (About Essential Truths)

10 Essential Economic Truths Liberals Need to Learn

Jeffrey Dorfman

Forbes

5th June 2014

Jeffrey Dorfman teaches economics at the University of Georgia.  In this article he presents ten economic principles or verities, which, he says, "liberals" need to learn.  Synonyms for "liberal" would be "left wing", "progressive", or, in the case of New Zealand, an apt synonym would be "general population", such is our adulation of bad economic principles.

1) Government cannot create wealth, jobs, or income. Because government has to take money from somebody before it can spend it, there is no economic gain from anything the government does. Money collected in taxes or borrowed would have been either spent or invested in the private sector. Any jobs government claims to have created are only in place of other jobs the same money would have produced if people had been allowed to spend it themselves.

It is possible for government to own businesses which trade like any other company in the private sector.  These may make profits, can, therefore, grow in size and capital base and add jobs as a result.  These are truly exceptions to the general maxim that governments cannot create wealth, jobs or income.  And Dorfman's general point remains true: government enterprise comes into existence by expropriating property from citizens in the first place.  Governments are unable to create wealth from nothing; in the first instance governments must appropriate property from tax payers.  

2) Income inequality does not affect the economy. Poor people do spend more (or all) of their income while people with higher earnings save some of their income. However, saving is as good for the economy as consumer spending (or better). The basic identity is that national income equals consumer spending plus investment plus government spending on goods and services plus net exports. To make investments, money first must be saved; so savings contribute to national income, too. In fact, savings that lead to increased capital (a company borrows it to build a factory, for example) will lead to higher national income in the long run because the capital can produce income year after year.

Letter From Argentina (About The Fate of Another Socialist Economy)

Analysis: Argentina policies adrift as inflation spiral looms

Brad Haynes
Yahoo News 

BUENOS AIRES (Reuters) - In the midst of Argentina's biggest currency devaluation in a decade, with the peso's plunge rattling financial markets worldwide, President Cristina Fernandez's first public address in weeks was silent on the matter.  She didn't say a word about the currency, but instead took to national television last week to announce the latest government measure - a new form of high school scholarship.

While the president has avoided mention of currency policy, the increasingly unpredictable messages from her ministers have amplified the risks weighing on the peso.  An announcement last week suggesting long-awaited relief from currency controls for ordinary Argentines in practice meant a trickle of U.S. dollars for an affluent minority.  Officials also promised to cut the tax rate on spending dollars overseas, but revoked the measure just two days later.

It's Not Fair

Economic Ignorance and Moral Turpitude

In his book, Fairness and Freedom, David Fischer makes some observations which represent a touchstone for truth and error in economics.  Fischer has written a historical comparison of New Zealand and the United States.  The latter nation has focused over time upon political and social freedom (from government rules, regulations, and controls) whilst New Zealand has been shaped by notions of fairness (which implies egalitarian distribution at least of opportunity, if not actual goods). 

We will endeavour to critique Fischer's book in a future post, but for the moment consider this partly insightful, yet misguided quotation:

Sunset Industries

Commercial Reality

Back in the day, New Zealand used to make cars.  We kid you not.  In fact, when Milton Friedman visited New Zealand around 40 years ago he was aghast that we had an automobile manufacturing industry.  It existed and was nurtured by government subsidies and grants--all in the name of creating employment.  Of course NZ Autos Incorporated has long since gone the way of the dodo.  Now punters import swanky second-hand (near new) cars from Japan at a fraction of the price.

The thing about government subsidies to start and maintain industries is that they are proof positive from the outset that the industry in question is not economic from the get-go.  In order to continue, it will need perpetual injections of government money.  Before you can say "Mitsubishi", pouring more money down the crankcase becomes a political necessity because, well, all those jobs are at stake.

We have seen a modern version of the same parable recently with the NZ film industry--stimulated by government interventions over the last twenty years.

Simplistic Nostrums Don't Cut It

More Full Than a Craft Beer Bar

Consider the following testimonies.

Citation One:

Feeding the masses will be a problem if the population continues to soar.  The news on the population front sounds bad: birth rates are not dropping as fast as expected, and we are likely to end up with an even bigger world population by the end of the century. The last revision of the United Nations' World Population Prospects, two years ago, predicted just over 10 billion people by 2100. The latest revision, just out, predicts almost 11 billion.

 

That's a truly alarming number, because it's hard to see how the world can sustain another 4 billion people. The current global population is 7 billion. But the headline number is deceptive, and conceals another, grimmer reality. Three-quarters of that growth will come in just one continent: Africa.  The African continent has 1.1 billion people. By the year 2100, it will have 4.1 billion - more than a third of the world's total population. Or rather, that is what it will have if there has not already been a huge population dieback in the region. At some point, however, systems will break down under the strain of trying to feed such rapidly growing populations, and people will start to die in large numbers. 

Citation Two:

Malthusian Cassandras

Purblind Arrogance and Invincible Ignorance

Malthusian despair grips the Western world in a vicious vice.  It is a puzzling phenomenon if one considers that the economic theories of Thomas Malthus were discredited centuries ago.  But the puzzlement exists only if one also believes in a false, objective rationalism, ignoring the blind foolishness attenuating the human heart.  Did not the prophet say, "the heart is deceitful above all things and is desperately sick; who can know it?" (Jeremiah 17:9)

We are sonorously told by modern sages that over-population threatens the continued existence of the planet.  Assuming that the world is one vast fixed, zero-sum game, our oh-so-wise cassandras insist that more mouths to feed means less food for everyone.  If one eats more, everyone else is condemned to eat less.  If a country expends more energy, there is less energy for every other nation. 

The latest voice is the respected and revered Royal Society.  Its purblind stupidity belies its reputation.

Bad Weather Coming

Idiotic Utopians and Mountains of Vainglorious Pride

The Soviet Union believed in Five Year Plans--central, government plans--to develop the economy of the Soviet Union to reach a prosperous nirvana whilst creating a new order in the world.  Government planners would focus the resources of the economy on what was vital and important; resources would be delivered; production targets would be set; and the entire army of Soviet New Socialist Citizens would go to work to transform the USSR from poverty to a socialist paradise.

None can gainsay that every attempt was made, every resource was committed.  Yet for nearly one hundred years the Soviet Union was so poor and backward that it did not have enough food for its own people.  Millions upon millions died through starvation and its attendant diseases.  Ah, but the propaganda machine had a ready series of excuses and explanations.

More Lanchashire Cotton Wool

Troglodyte Reactionary Syndrome, Part II

Economic ignorance amongst the left never ceases to surprise it seems.  Hidebound in ideology, leftists would appear unable to see what is right before their face.  

The latest example: the self-styled humble blogger, Danyl at Dim Post.