Is America going kaput?

First, there's the extraordinary kerfuffle over mortgages. The short version is that the repackaging of mortgages - slicing and dicing - has been somewhat lacking in sound paperwork. That's putting it mildly. Some fear that this is going to collapse the whole American banking system.

People are angry:

This nation is a powderkeg. These banks break into the wrong house down here and come up against an owner with a shotgun, the "securing company"'s goon gets a load of 00 buckshot to the chest, and this ENTIRE ISSUE will come down to whether the local Sheriff shakes the homeowner's hand and pats him on the back or calls SWAT.

And another one:

People like us won't take matters into our own hands until we are sure, beyond a shadow of a doubt, the last vestiges of the system we depend on for our social well being have been completely overtaken.That moment is approaching, and the powder keg is full. The rule of law better get into gear, and it better get there quickly, because our patience wears thin.

Here is Mark Stein:

In a two-party system, you have to work with what’s available. In America, one party is openly committed to driving the nation off the cliff, and the other party is full of guys content to go along for the ride as long as we shift down to third gear. That’s no longer enough of a choice. If your candidate isn’t committed to fewer government agencies with fewer employees on lower rates of pay, he’s part of the problem. This is the last chance for the GOP to restore its credentials. If it blows it, all bets are off for 2012.

Then there is leftist voter fraud:

It is positively outrageous that in Clark County, Nevada, the SEIU Local 1107, which supports Harry Reid, controls the ballot boxes by contract through their representation of the voting machine technicians. It is not surprising that Senator Harry Reid’s name was automatically checked off on the ballot when individuals went to vote.

And this is happening well beyond Nevada.

The elections finish next week. I'm not too optimistic that the US will change in time. Change that is to a system of strictly limited constitutional government. Of course, there's no sign of that here either.

Monetary and Scottish economics

First please take time to listen to an excellent interview with Kevin Dowd.

Professor Dowd has (along with Martin Hutchinson) just brought out Alchemists of Loss, which deals with the ongoing financial crisis from a libertarian perspective. Like myself, Professor Dowd is involved with the Libertarian Alliance.

Here's a Scottish-related quote:

As for the banking system, we would suggest that the role model is Scotland pre-1845, when the Scottish banking system was virtually free of state control, unhindered by a central bank, and equally admired and envied across the world – and copied by countries such as Canada and Australia. In all three countries, free banking systems operated highly successful for very long periods of time.

Note the non-role for a central bank and think about the consequent conservative approach to financial engineering.

Next I recommend listening to Professor Andrew Hughes Hallett explaining why Scotland's economic prospects are not quite what we are used to hearing from conventional news sources.

I too think that Scotland's financial position as an independent country would be perfectly viable provided we adopt sound policies. That's the key condition. The folk marching along Princes Street on Saturday would have better employed reading Professor Dowd's book.

(Thanks to the Cobden Centre and Newsnet Scotland for these links)

Tax-consumers on the march

DSC_3006 - 2010-10-23 at 12-19-05
Originally uploaded by David Farrer

I didn't know that the police were allowed to join unions.

Lots more tax-consumers are shown over here

Yes shareholder

Let's rephrase yesterday's post in the language of the private sector:

Shareholder: "Finance Director, I understand that you're forecasting a big loss."

"Yes, £702 billion next year."

Shareholder: "My God, and the following year?"

"Well then it'll only be £713 billion!"

Shareholder: "I don't believe it. And then what?"

"The next two years' losses will be £724 billion and £740 billion. Not too bad, eh?"

Shareholder: "But it's getting worse every year, isn't it?"

"Oh no, not really. When you allow for inflation our losses aren't getting higher at all but remain at the same modest level each year."

Shareholder: "That's a bit beyond me. Anyway, who is responsible for creating this inflation? Not you by any chance?

"Yes shareholder."

Same old boss; same old debt

Here's the key quote:

Total public expenditure, which includes debt interest payments, will be £702bn next year then £713bn, £724bn and £740bn, bringing real terms public spending to the same level as 2008.

So, all this talk of "cuts" is pretty meaningless, isn't it? The debt in "real terms" will be back to what it was in 2008, but not for 4 years! But the "real terms" quote is what matters. If the Bank of England (sic) did its real job, and stopped stealing your granny's life savings, there wouldn't be any inflation to disguise the true nature of this con.

"Conservatives", "Liberals": give me a break.

Private property again

Following yesterday's post on Private Places I had an extended discussion on Twitter with Scotbot.

Our discussion was connected with this piece in the Guardian and especially this comment:

It may be privately owned, but in Scottish law it still counts as public space under the Civic Government (Scotland) Act 1982.

Section133, Public Place:

"public place" means any place (whether a thoroughfare or not) to which the public have unrestricted access and includes:

1. the doorways or entrances of premises abutting on any such place; and 2. any common passage, close, court, stair, garden or yard pertinent to any tenement or group of separately owned houses

So in this way the street which is Multrees Walk is a public space.

There is also a suggestion the street has been adopted by the City of Edinburgh Council, in which case it is definitely not a private space.

The limitations of Twitter's 140 character limit has led to my posting this further message.

Given Section 133 it's certainly the case that the owners of Multrees Walk are out of order and need to retrain their security guards. Maybe this is another case of Scots law being ignored by English companies although perhaps England also has a Section 133 equivalent.

But none of this alters the point that I was trying to make.

As a keen photographer I'm happy to be able to take photos in as many places as possible. But as a libertarian I am in favour of property rights and by that I mean rights based on the libertarian non-aggression principle rather than those that happen to have been passed by any particular legislature. Needless-to-say I'm not advocating disobeying man-made legislation but arguing in favour of a natural rights approach. I'm not at all happy about the blurring of the rights of private property owners that Section 133 brings into play.

Here's a personal example. Where I live the flat owners each have a dedicated parking space. Given the market rate that non car users are able to achieve I'd guess that around 10% of the cost of my property purchase went on the parking space. But if one leaves the bollard down or has it damaged we've been told that we are unable to take meaningful action against parking infringers. Incidentally, a (sadly late) neighbour once told us that the infringers of our private but public spaces included bankers and policemen!

The point I was trying to make yesterday was that it's far better to rely on rigid rules that give private owners full control of their property than to hope that a benevolent state will look after us. Large numbers of competing private providers of spaces open to the public are more likely to produce the good life for all of us (including photographers) than a reliance on the state. The recent police war on photographers is a good example. Having competing legislatures is a second best alternative to that given by private property rights. But competing legislatures are better than monopolistic ones. That's why I favour devolution and why I am quite warm to the idea of independence.

Private Places

There's been a bit of a row concerning Multrees Walk in the centre of Edinburgh:

Most people would probably agree that Multrees Walk is fairly attractive public space. There's no traffic, it has a high quality 'retail experience', there's a cafe where you can sit outside and watch life go by. Some of the shops have better than average window displays. Just don't try and take a photo of it, as overzealous security guards might start threatening you.

The planned demonstration by photographers took place today:

A flashmob of photographers descended on Multrees Walk today to protest against the treatment of Stefan Karpa, who was escorted off the exclusive shopping street by security guards last week.

I am both a libertarian and a keen photographer. So what are my views on this?

First, if Multrees Walk is indeed private property (though there seems to be some doubt) then the owners have every right to set whatever rules they like for those entering their property. Just as one does with one's own house.

Whether such rules are sensible or not is quite another matter. In my view, banning photography in property that is open for the public to enter at will is both stupid and offensive in the extreme. Especially in a city dependent on tourism. But the proper response is not to say that "there ought to be a law against it" but rather to take action in the free market against those initiating such rules.

I would suggest something like writing polite letters to the occupiers of the shops in Multrees Walk letting them know that one will boycott their businesses so long as this rule remains in place. Perhaps leaflets should be handed out to visiting camera-carrying tourists giving them a friendly warning about Multrees Walk's bizarre rules.

But there is another angle to this. The only alternative to privately owned streets is state owned streets. Whereas the owners of Multrees Walk would almost certainly capitulate to a vigorous (and well-deserved) campaign that threatened their profits, the state faces no such threat. A year or so ago we read about policemen in London interrogating visiting tourists who had been seen photographing red buses and Christmas decorations. The British photographic press has been up in arms about police persecution of photographers in publicly owned spaces for ages.

The whole point about private property is that it allows for all sorts of competing rules concerning interactions with non-owners. In a regime of totally privately owned streets I'd have little doubt that the owners of Multrees Walk would quickly realise that a speedy route to the bankruptcy court would be to annoy significant numbers of their tenants' customers. There is no such guarantee with a monopoly state owner.

There's been a merger...

Well, not yet anyway. But they may be coming:

In a speech to the SNP conference in Perth, Mr Salmond said he would put "bobbies before boundaries". He did not indicate the scale of the reduction, but The Scotsman understands ministers are looking at cutting Scotland's eight police forces to three or four.

Normally I'm all in favour of cutting public expenditure. And I mean cutting, not just slowing down the rate of increase as proposed by the UK government.

But, ignoring the very good libertarian case for anarcho-capitalism, the only justification for the state is to protect us against aggressors. That means limiting the state to providing the military (to protect us from foreign aggressors), the police (to protect us from domestic aggressors), and a court system to judge those accused and order appropriate restitution.

It's clear that the British police no longer see their role as one of protecting the citizen. Rather, they have become the paramilitary wing of the Guardian newspaper. (*)

I am not at all comfortable with the creation of larger and larger police forces that would inevitably become more remote from the people they are meant to serve. I suspect that we would be better off with a greater number of localised forces. Proper co-ordination would be essential of course. As would directly-elected Chief Constables. If this turned out to cost a bit more than the current arrangements the necessary cash would be available after the first few hours of real libertarian cuts...

(*) I coined this excellent phrase some years ago. I would now add "and the BBC".

Yet another Bastiat alert

Here we go again

THE new boss of Scotland's national tourism agency has called for the return of public funding to help attract new airlines to Capital.

In his first interview since being appointed chief executive of VisitScotland last month, Malcolm Roughead said that the route development fund (RDF) could help entice new airlines to Edinburgh Airport and bring the city links to the Middle East, Asia and Canada.

I'm sure that "funding" could induce more air services to Edinburgh. If Mr Roughead "funds" me enough I'll even start my own airline and operate to Dubai, Dundee and all points between.

But what we're talking about here is the use of taxpayers' money. Why should taxpayers be made to pay for air services, nice though they may be? What alternative public spending would be cut to keep to budget? (Don't laugh!) Above all, is it not the case that a Scotland in which the producing class kept all or most of its money would be so prosperous that airlines would come here without being bribed?

Roll out the barrel

I took this photo in Jerez de la Frontera:

P1020581 - 2010-09-20 at 09-22-06
Originally uploaded by David Farrer

The young man who showed us round the Bodega didn't know who Edward Heath was. I explained that Mr Heath was a lifelong tax consumer and was no longer with us. As a British taxpayer it only seemed right that I should be given the barrel...

Sadly this was not to be.

Responsibility

A "business" doesn't owe responsibility to anyone. How could it? Only people have responsibilities.

And the responsibility of the directors of a business is to its shareholders, not to the "community". The whole concept of "corporate social responsibility" is a fraud on the shareholders who own companies. I suppose that one could argue that given the irrational climate in which we live some short-term minded company directors might think it's necessary to go along with this pernicious doctrine.

It seems so:

A study of the CSR policies of 12 of Scotland’s largest listed companies, found that spending year on year on corporate good citizenship increased in defiance of the tough economic conditions. They included Standard Life (+12%), Weir Group (+8%) and Wood Group (+5%), even though the latter two companies were found to be among the least active in the area relative to their size. Cairn Energy, Alliance Trust, Aberdeen Asset Management and Stagecoach all also claimed to have maintained or increased spending. This came at a time when spending on advertising in the UK plunged, down 12% between 2008 and 2009.

And how about this:

Jane Wood, chief executive of charity Scottish Business in the Community, said the findings were reflected across the board. She said: “Around 70% of chief executives say the recession has resulted in sustainability becoming more important.”

But directors owe a long-term responsibility to shareholders and it's incumbent upon them to speak out against the CSR fraud. Sustainability should always be a priority for company directors whether there's a recession or not.

Actually, I suspect that we are seeing the first stages of a great depression but let that pass for the moment.

What gives a business sustainability is not pandering to CSR but a resolute defence of property rights. Let's hear it.

Holiday photos

Photos of our recent trip are here:

Ghent

Honfleur

La Coruna

Porto

Lisbon

Algarve

Cadiz

Jerez

Melilla

Barcelona

10:10

Mrs F&W came up with an excellent point about Splattergate last night.

Wouldn't it be wonderful if one of the first uses of the Equality Act were to be someone working for one of the 10:10 sponsors, O2 for example, to sue their employer for the terrible upset caused by being associated with the Ecofascists?

Pass the port

We've been away on holiday.

To start posting again, here's a photo of the new F&W cellar:

P1020513 - 2010-09-17 at 11-56-45
Originally uploaded by David Farrer

Cheers

P1020518 - 2010-09-17 at 12-18-23
Originally uploaded by David Farrer

The Mandarin Windfall Tax

It's payout time again:

A CULL of senior managers at Scotland's biggest city council will result in 103 executives each receiving £128,000 in pay-offs and payments to their pension funds, it emerged yesterday.

The Council claims that these payoffs will save money in the long run. Perhaps, but the terms are outrageous:

About 80 per cent of each package will go towards reimbursing managers' pension funds for the costs of early retirement, with the remainder being spent on giving them the equivalent of 30 weeks' salary. The deal does not apply to the local authority's 5,000 teachers.

The real question is why such contracts were signed up in the first place.

And it's not just Glasgow Council that's got far too many overpaid staff. Have a look at this:

Today, The Slog begins a campaign to try and unearth why nearly half of everything Britain owes is down to public sector and civil service pension liabilities - and how this came to be presented as a difference of opinion between those calculating the liability....whereas in fact there seems to have been a deliberate attempt to hide the pension amounts being paid to civil servants....especially senior Mandarins

So what should be done?

Given that the employment contracts are probably watertight I propose that the Chancellor introduce an emergency Mandarin Windfall Tax. After all, that's what happened to bankers. And the bankers were less guilty: they acted rationally given that they operated in a fractional reserve monetary system put into place by the mandarins themselves. And in so far as one might argue that the bankers should have seen through fractional reserve banking, they were "educated" at universities controlled by those very same mandarins.

Bastiat Alert

Yes, here's yet another one:

The Scottish government's exports agency has said it generated more than £500m to Scotland's economy last year.

Scottish Development International (SDI) said it had also managed to secure 5,500 jobs despite the global recession

I can just about understand why SDI itself doesn't ask the obvious question: Just how many jobs would have generated had the taxpayer kept his own money and chosen his own investments?

But why didn't the BBC ask? Surely not because the BBC's also funded by the taxpayer?

Book Festival - the final days

Other events that I went to were: Ewen Cameron and Christopher Whatley

Alexander McCall Smith

Iain Dale and others

Robert McCrum

Doug Saunders

And last but not least:

Frederick Forsyth

Frederick Forsyth
Originally uploaded by David Farrer

After all that it was time for a bevvy in a nearby hostelry:

Mathers Bar
Originally uploaded by David Farrer

The new Los Angeles Tram System

A new (government) school in LA is going to cost a modest $578,000,000.

For that kind of money they could get a new tram system, although it probably wouldn't get as far as the port...

According to this report:

The Los Angeles Unified School District spent $29,780 per student in fiscal year 2007-08. That’s way above the $10,000 as advertised by the school district, and as used in most studies.

For that kind of money they could all be sent to Fettes!

After India

I see that Denmark has qualified for British foreign aid.

Heather Brooke

The enemy of The Silent State

Heather Brooke
Originally uploaded by David Farrer

Austrian Economics

Or real economics as I would put it.

Here is a PDF version of Eamonn Butler's recent introduction.

Obliquity

This morning I heard John Kay talking about Obliquity – how our goals are best pursued indirectly. I'd heard Kay speak in Edinburgh a couple of times before and this was a fascinating session.

Kay had once served as a director of the Halifax Building Society who voted in favour of demutualisation. This resulted in Kay's receiving an e-mail saying: "Now we know who caused the financial crisis"!

Book Festival on Thursday

On Thursday morning we went along to hear David Kynaston talking about his new book Family Britain 1951 - 1957. The previous book in this series was Austerity Britain 1945 - 1951.

This was an enjoyable session, especially for those of us who (just) remember the fifties. Unsurprisingly, Kynaston was in "on the one hand and on the other hand" mode. Just as I was taught to say in essays:

On the one hand Marx said ...... and on the other hand Rothbard said....

I did get away with that!

Back to Kynaston. On the one hand people were perhaps too repressed in the fifties but on the other hand crime was very low indeed. I think that most of the audience were more interested in how to get back to an era of low crime without necessarily agreeing that they had been particularly repressed back in the fifties.

Nice work if you can get it

There's been a big row over high "pay and perks" going to executives at the taxpayer-funded Scottish Enterprise (sic).

Rightly, some MSPs are speaking out:

Mr Park said: “These sums are absolutely astonishing. Most public-sector employees are being told that salary increases will be pegged at 1% but it appears there are different rules for those at the top.

“It is time the Scottish Government told these people to start living in the real world.”

Fair enough, but who exactly is this John Park? He is a Labour MSP!

Calling for a government to start living in the real world!

Truly, you couldn't make it up.