Think Right

United States’s SBS News commentators Shields and Brooks are in a quandary as to the trillion dollar “stimulation” package.

Shields: We are spending billions on getting out of this but nothing is happening.

Brooks: Confidence is the child of optimism.

Shields: Americans rebuilt devastated Germany after WW2. Americans rebuilt devastated Japan after WW2. We can surely rebuild America.

Shields is quite wrong on both of those points. It was the wise economic decisions of Finance Minister Ludwig Erhard that rebuilt West Germany. He eschewed money printing, reduced taxation and the recovery was so dramatic, that unemployment went from 50% to zero in 10 years.

And five million new workers had to be imported from Greece, Turkey, Italy Spain and France.

In Japan’s case, it was Japan’s Minister of Trade and Industry, Tanzan Ishibashi who dictated Japan’s economic policies. He abolished the tax on the interest of savings. He cut tax on dividends from 11% to 7% and cut personal rates by 10%. Corporate tax rates were dropped from 42% to 40%.

Curiously tax revenues rose by 15% and voluntary savings rose by an astonishing 31.5%.

Taiwan, Hong Kong, Singapore and South Korea also copied West Germany’s recipes and made astonishing gains in ten years.

Our illustrious leaders and Opposition ought to study these policies and apply the nation building recipes here.

Ronald Kitching

The United Kingdom, already financially moribund after 12 years of socialist rule is yet another a sad example of monetary madness, as they prepare to emulate Mr. Mugabe’s example of “stimulation” by money printing on a grand scale.

Who would have thought that this once great nation which was the modern founder of sound money, could descend to such relative penury.

President Obama and Prime Minister Rudd are too embarking on the Mugabe recipe.

It was Sir Isaac Newton when he was made Master of The Mint in 1717, who declared: “If this nation is ever to prosper, it must have honest money. That is, we must have a standard by which money can be measured. In order to calculate, you must define the unit. Therefore, from this day forward, every guinea will be worth 129.4 grains of gold. Thereby, we intend this currency to hold its value.”

So seriously did he take his views that counterfeiters were hanged. It is a great pity it isn’t still a hanging offence, we would get rid of the Central Bank and a raft of corrupt senior politicians all in one hit.

Ronald Kitching

The PM assures us that he is concerned about jobs. If he and his advisers knew anything about how real jobs are created and maintained he would not now be acting out the most incredibly destructive fiasco in Australian history.

A short letter cannot possibly do justice to the subject. But the following book does so.

Murray N. Rothbard’s book titled America’s Great Depression is a staple of modern economic literature and crucial for understanding a pivotal event in American and world history. Applied Austrian economics doesn’t get better than this.

Since it first appeared in 1963, it has been the definitive treatment of the causes of the depression. The book remains canonical today because the debate is still very alive.

The Great Depression was not a crisis for capitalism but merely an example of the downturn part of the business cycle, which in turn was generated by dishonest government generated money and government intervention in the economy.

Its appearance in 1963 meant that free-market advocates had their first full-scale treatment of this crucial subject. The damage to the intellectual world inflicted by Keynesian- and socialist-style treatments are illustrated and demolished.

The Great Depression was a failure not of capitalism but of the hyperactive state.

It is available in hard copy and on line at: www.mises.org/rothbard/agd.pdf [PDF, 956KB].

Ronald Kitching

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.

So wrote the greatest of Roman lawyers, statesmen and orators Cicero in 55 B.C.

Forthright in every sense, his statements found the ever power hungry men of his time uncomfortable, as he exposed their corruption. Finally he was murdered by Mark Anthony who had his head and hands cut off and his head was set on a spike in the Forum and a nail driven through his tongue.

A warning to others to be more careful with their words.

Dissidents here speak out against the inflation, the unnecessary, unjust and destructive EMS tax, the sacrifice of productive farms and other atrocities.

Newspaper essays on proposed reprisals indicate that such protesters may soon suffer a similar fate to that of Cicero as the anti-industrial environmental movement flexes its poisonous influence.

Ronald Kitching

The Government caused the boom by increasing the money supply. They increase the money supply to pay their bills rather than tax the public directly. Nevertheless it is a hidden tax. Their excesses of monetary expansion cause a so called boom.

The boom induces entrepreneurs to initiate investments which, if the money was reduced to its original stable value would show losses, not profits.

And in any case if this exercise did reveal profits, they would be illusory, as in fact, reduced to its original stable worth, capital consumption would be seen to be occurring.

Now that the bust has occurred, the government is endeavouring to stimulate the economy with more of the same policy that caused the problem in the first place.

Many writers and commentators are complimenting the Government on its “wise” move. Some eminent commentators saying that it is not enough, and much more is needed. In so doing, they are exhibiting their abysmal ignorance of monetary theory.

Some wise local and international investors who have had the wisdom and the capacity to do so, have been and are buying gold. So much so, that the Perth Mint, working 24 hours a day seven days a week has had to close its doors to the public, until it catches up with back orders. They announced that buyers have made purchases from one ounce to 33,000 ounces.

Some interviewed investors say that, they are not really interested in profits, but capital protection. Wise people indeed.

Ronald Kitching

The Weekend Australian Magazine of 2 Aug 2008 lists 13 people for us to admire – “The Quiet Achievers” they are called. They comprise a social worker, a life saver, a body builder, a swimmer, a conservationist, a scientist, two doctors, a judge, a banker, a writer, a saleswoman and a judge. These are all admirable people, no doubt, and excellent in their field. But they are all from the service or performing industries – the beautiful people on the balcony, admiring the view. Maybe you should now highlight the people who actually get their hands dirty and make things – “The Servants Beneath the Stairs”. Here is another dozen people who will relate to many Australians outside the capital cities:
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I have seen on TV and noticed in numerous news items that Treasurer, Wayne Swann declared his pledge to use “every cent” in revenue raised through the ETS (Emissions Trading Scheme) to help assist households and business. This policy would continue for the life of the Rudd Government.

I wonder if Mr. Swann has any idea of how many bureaucrats will need to be employed to accomplish this task of seeing just who is disadvantaged, and who deserves paying. A lot of room here for corruption too, with Lefty
mates.

Then Senator Bob Brown plans to revitalise the Australian economy with 3.4 million new blue collar jobs insulating every home in the nation, plus installing solar hot water systems and solar roof panels on them. He stated
that he intends to start this great enterprise with the financially poor, weak, needy, aged and infirm.

While I may be a member of all of those, I am not that gullible.

History shows that the unfettered, low taxed free market is the best deal to raise living standards. History also shows that new political devices, no matter how appealing, to tax the productive population, dramatically lowers
living standards.

Mussolini, Hitler, Lenin, Stalin, Chairman Mao, Pol Pot and others of their ilk, were all zealous reformers. Those not agreeing with their policies were quickly despatched to paradise.

While I am anxious to go to heaven, I am in no rush to be assisted there by the good intentions of zealous political reformers.

Ronald Kitching

A just government does not tyrannise its population. Climate Czar Garnaut’s climate change legislation, which means imposing an emissions trading scheme on the population, will be a diabolical exercise. Bob Brown says polluters will pay, meaning in his view, all industrial activities, including the development of electricity by coal driven power houses.

Before the election he was crowing that should labor be elected every coal driven power house in Australia would close. This may well be the case in due course.

And Penny Wong says that the top 1,000 polluters will need permits. That is newspeak meaning the top 1,000 producers will pay a tax to produce. She added that the effect of the permits would wash through the community in a “whole of economy approach.”

That is more newspeak for “the entire population will eventually be saddled with the tax”. If it all comes to pass, Senator Wong will indeed be making poverty history.

It is indeed incredible that carbon dioxide, the very gas upon which all life depends for photosynthesis, is condemned by the gang of four; those being Brown, Wong, Garrett and Garnaut. And, like Chairman Mao, PM Rudd leads the rush to the extinction of personal liberty.

If a King or emperor in days gone by inflicted such an imposition on his subjects, he would have to cope with a revolution and, in fact, may lose his head.

Ronald Kitching

We are all born possessing a generous measure of compassion. The good book says, “He who is without compassion cannot enter the Kingdom of God.”

But compassion is not the business of the state. The business of the state is to protect us from internal and external thugs. That is why early philosophers agreed to give that body we call the state, a monopoly of coercion.

The state uses force to apply the law. Police, guns, obedience to the edicts of the state. Various jail terms are used to punish serious misdemeanours and to exact obedience to the laws of the land.

In their enthusiasm many compassionate people advocate that the state tax funds from the productive sector of society to satisfy their feelings of compassion, to reward what ever or who ever is deserving of their particular passion.

Today we have those who were advocates of personal liberty and the market system, now advocating interventions by the state to satisfy their particular view.

Caught up in the lemming like behaviour of the fear of carbon dioxide, Senator Bob Brown’s misplaced compassion for the planet is advocating more state interventionism.

He stated today, “National action using Constitutional Powers is necessary to punish polluters.” Addressing the National Press Club on 9th July he stated that coal miners and those in the lumber business were criminals and should be treated as such.

The ultimate end result of such political advocacy ends up as a political leader turning into a Fuhrer.

Ronald Kitching

Background

eBay proposes to supply the services offered on the eBay Site to registered users of the eBay Site, on condition that users only acquire the online payment services provided by PayPal Australia Pty Ltd. The ACCC (Australian Competition and Consumer Commission) is considering whether to allow eBay to engage in such exclusive dealing.
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