Diversionary Tactics

Whenever Tony Blair was having a particularly tough time he would role out his old favourite – Fox Hunting. That was usually good for the headlines he needed to divert the news agenda from his problems. Jacinda Ardern clearly learnt a thing or two when she was working for Tony Blair.

The headline in the Guardian today is “New Zealand likely to become a republic in my lifetime, Jacinda Ardern says”. However, to the enormous credit of the New Zealand press it does not seem to have had the desired effect. There is no sign of New Zealand becoming a republic in the New Zealand press. On the contrary, Stuff leads with “Is Jacindamania Over?”.

To give you a flavour of the issues have a look here. Perhaps the most serious is Ardern’s decision to say with a straight face that there are no Russian spies in New Zealand, hence no deportations. This is in contrast to 25 other countries that seem to have had no difficulty identifying spies for expulsion at very short notice.

This is not an accident. Ardern did two big interviews last weekend covering the Skripal case, when she repeatedly described the poisonings as “repugnant” but never used the word “Russia” in either interview.

She may be right to hesitate over naming Russia. The US ambassador to New Zealand was asked if he was “certain” that Russia was responsible, twice, and failed to say “Yes” either time. It may be that Russia was in fact not responsible, but saying that you stand squarely beside your Five Eyes partners and then not standing squarely beside your Five Eyes partners looks a lot like the “cake and eat it” diplomacy that will only anger both the Russians and New Zealand’s friends.

Global Temperatures

Back in January 2017 I wrote that “2017 seems destined to be cooler than 2016“. How did that turn out?

Well, on the current MSU & AMSU Time Series data published by Remote Sensing Systems the average global temperature anomaly for 2017 was +0.634 oC and for 2016 it was +0.742 oC. Job done? Yes and no.

Sadly we can no longer trust the satellite record. The historic data has been “amended”, without explanation. When I reported the 2016 figures a year ago, the average temperature anomaly for 2016 was +0.573 oC. The temperature for 2016 has “risen” by 0.169 oC during 2017! My spreadsheet with the numbers is here.

The figures have been amended retrospectively each month by a small amount. The temperatures for 2017 are still rising month by month. Having amended the surface station record to re-write history the “scientists” now seem to be doing the same to the satellite record.

Here in New Zealand NIWA released their 2017 Annual Climate Summary, still using their flawed Seven-[ground] station series. This states that 2017 was the fifth warmest on record, and listing a series of temperature “highs”. You would be forgiven for thinking that temperatures were rising. The report hides the fact that, even on their own data, 2017 was much cooler than 2016 (+0.54 oC versus +0.80 oC).

Where to turn? A great deal of hope has to rest with Scott Pruit, Trump’s appointment to head the US Environmental Protection Agency (EPA). Maybe he can put the “science” back into “climate science”.


The Guardian recently reported on a report by the Institute for Public Policy Research (IPPR) which made the uncontentious statement that “The unequal ownership of capital in the economy is a powerful driver of inequality”. However, they then went on, not surprisingly, to propose ownership reform to: “give more people a share of capital, both as useable wealth and for its income returns; and to spread economic power and control in the economy”.

Is this not like using a sledge-hammer to crack a nut? I strongly suspect that if you ask employees, what they want is a pay rise rather than a share in the ownership. Sure, if they can sell that share then they are not averse to a quick handout. But the key is getting money into their bank account, rather than giving them power and control in the economy.

The report [rightly] extols the virtues of employee ownership trusts, cooperatives, and mutual. It also proposes a UK Sovereign Wealth Fund, which they call a Citizens Wealth Fund. Which is fine, though the UK government is not flush with the means to fund that idea just now. And has not had such funds for many decades.

Surely the key here is “income”. What if a more favourable tax regime existed for companies that gave a share of the profits to employees?

Shareholders might not like it, but remember that shareholders a generally not investors in a company. They buy shares off an existing shareholder, so the money they “invest” goes to the previous owner of those shares not to the company. And, returns on equity (ROE) have historically been high compared to other forms of saving. A McKinsey study found ROE to be 5.0% over 116 years. That is huge, and definitely leaves room for a more equitable sharing of profits whilst retaining the incentive to invest in productive assets.

Value in any business derives from; capital, labour and scarcity. Scarcity would be things like; mineral rights, technology, brand, intellectual property. It seems to me that the owners of capital are entitled to a return on their capital, but a return on the labour of their employees as well? In what way is it right that the owners of shares should have the right to claim 100% of the profits of a business?

Capitalism has definitely out-performed communism, but that was last century’s debate. In the 21st century the debate is about what form capitalism should take. The rules of capitalism are not fundamental laws of nature and should be open for review. In that, even if the IPPR over-reaches with suggestions on ownership, it is surely right to propose changes to the way that profit is shared.


Assisted Dying

David Seymour, the sole ACT MP in this New Zealand parliament, introduced his private member bill on assisted dying last Wednesday. It passed by 76 votes to 44. Two things caught my eye. One similarity to the UK. And one difference.

The difference is immediately apparent:- this is a suitable subject for parliamentary debate in New Zealand, but it is not even a subject of political discussion in the UK. This bill is very limited in scope. For instance it requires the informed consent of the person dying, and so does not attempt to provide the possibility of a dignified end to life for a person suffering from dementia. It is widely popular amongst the new Zealand Electorate.

The similarity only becomes apparent if you try and check how a particular MP voted. Here is the only record that I can find. In the UK it is also very difficult to find how your MP voted. In the modern age it would be trivial to have a page on the government website that shares this information with the electorate.

In a representative democracy, the people being represented clearly have a right to know their representatives vote in parliament. Why are MP’s in the UK and New Zealand so coy about how they vote?


Jörg Urban, the head of the AfD group in the Saxony state parliament, has come up with one of the all-time great one-liners. He said that, if plans to halt lignite mining went through, Saxony would become “a new, regional poorhouse with no future, but a lot of wolves.” This is right up there with “super cali go ballistic Celtic are atrocious“.

This stems from the convergence of two Green party policies. First, they support the return of Wolves in Lausatia, which is part of Saxony on the Polish border. Second, they plan to ban the mining of lignite (Brown Coal), of which Lausatia has the largest reserves in Germany.

Germany currently uses lignite for 24.4% of its energy production. Following Fukishima, Germany is planning to phase out nuclear which currently accounts for 11.5% of Germany’s energy production. Having its energy mix meet its COPO23 target of reducing Germany’s greenhouse gas emissions by 40 percent by 2030, relative to the 1990 levels, makes the current coalition negotiations look like child’s play.

The AfD solution is, rightly, to ignore the CO2 emissions. The world continues to prove, to the dismay of Greenies everywhere, that CO2 levels in the atmosphere have no significant effect on global temperatures. Support for COP targets is just the sort of virtue signalling that the better off in society can afford.

What is so delicious about the statement from Jörg Urban is that, for the first time, it depicts the green electorate as a pack of wolves preying on the poorer in society. As with the wolves, we may find this is an image that has legs.


Rat Alert

A single piece of excrement, just over an inch long, has sparked a major alert in New Zealand. The reason:- It could be rat poo. And:- it was found on Codfish Island.

Codfish Island is one of three islands where Kakapo survive in the wild, holding the majority of the 154 animals left alive. The Kakapo is a large flightless parrot that has been driven to the verge of extinction by introduced predators, including rats. These three islands are, or at least were thought to be , and were intended to be, predator free.

There is a rather brutal view that the Kakapo is the avian version of the Giant Panda. Which is to say that it seems to have a kind of evolutionary death wish, so spectacularly ill-suited is it for survival. If there were Darwin Awards for animals, these would be two contenders. However; they are important both in their own right, and as indicators for the ecosystems they live in, and as indicators of mankind’s will and ability to conserve the precious genetic diversity of planet earth.

There is a vision of making New Zealand “predator-free” by 2020. What chance of that happening, if we cannot even keep codfish island predator-free? Maybe we can take some comfort from the fact that in New Zealand an inch of possible rat poo is newsworthy.




We currently have the sight of the New Zealand and Australian governments arguing over very small numbers of refugees. In New Zealand we have National and Labour vying for the moral high ground.

We know from the experience in Germany last year that the moral imperative of not torturing refugees, quickly runs into the problem that the goodwill of even the most generous recipient nation is exhaustible.

Angela Merkel took the heroic decision to let in as many immigrants as made it to Germany, which resulted in around 1 million immigrants in 2016. In 2017 the anti-immigration party AfD (Alternative fur Deutschland) won 94 seats in the Bundestag, and now Germany has no government.

Australia has a humanitarian program with a cap on numbers for 2105-16 of 13,750 immigrants, plus an additional 12,000 visas available for refugees from the conflicts in Syria and Iraq. Hopefully that puts the 170 being discussed from Manus and Nauru into perspective.

The argument is not really about 170 people. That number is so small that no one really thinks it is any kind of problem. The problem is that we are no closer to knowing what is the right maximum number. Germany has demonstrated the truth of the old adage that “taking all the people from poor countries and putting them in rich countries does not solve anything”.

Maybe the New Zealand government can play a role in moving this debate forwards, but poking the Australian government in the eye with a sharp stick is not going to get us there. By playing politics with the lives of truly desperate people, the New Zealand government is no better than those anti-immigration forces that it disparages.


Fake News

The Nation, a weekly political roundup on New Zealand TV, had an article last weekend reviewing Donald Trump’s year since he was elected. They started with a montage that would have made the BBC proud, including a piece on “the crowd size” at his inauguration. They even showed the now famous picture comparing crowd size at the Trump inauguration ceremony itself, compared with that at Barak Obamas first inauguration. They then interviewed Teen Vogue Columnist Lauren Duca who said “the president has lied, literally thousands of times”, and allowed that comment to pass without challenge.

Here is the link to Sean Spicers statement. As you can see he refers not to “crowd size” at his inauguration, but to the audience that witnessed the inauguration “both in person and around the globe”.

I have not seen reliable figures for audiences around the world. It must be all but impossible to produce such numbers. However; given the rising world population and spread of technology over the intervening eight years, it must be highly likely that Sean Spicer had it absolutely right.

Trump critics have rolled out Sean Spicer’s audience claim, relabelled as a crowd size claim, again and again. They give the convincing impression that this is their best shot at proving that Donald Trump disseminates fake news. Well, their best shot is itself fake news.

That the liberal, establishment, elite in New Zealand buys into this narrative may explain why the policy platform of the new Labour-led government in New Zealand is devoid of any radical ideas. Maybe they felt they simply could not get a fair hearing? They will spend a bit more and tax/borrow a bit more than the previous administration, but their policies are versions of the policies that they say have failed.

Is it really true that Bernie Sanders and Jeremy Corbyn can have radical ideas, but not this NZ government? There is a saying about what happens – If you keep doing what you’ve always done . . .


Polarising Prosperity

The London Business School Review out this month includes an article on increasing Income Inequality. It concludes, emphatically, that we should be concerned.

The figures are staggering. In the USA the bottom 50% of households average income in 1980 was $16,000. By 2014, adjusted for inflation, this had risen [marginally] to $16,200. For the top 1% the comparable figures are $428,000 and $1,300,000. And mobility between generations is actually less where income inequality is greatest, in the USA and UK.

This has many knock on effects, such as on health. “An American male in the bottom one percent of the income distribution is likely to die before his 73rd birthday, whereas a man in the top one percent can expect to live to 87”.

LBS is a global citadel of uber-capitalist and uber-free-market thought. So for the LBS review to include such an article is encouraging. Income inequality in New Zealand is not [yet] comparable to the USA and the UK. They lead the world in this regard. However, under the National Party, New Zealand showed all the signs of heading in that direction. In the UK the Labour party, under Tony Blair, only made the situation worse. Can this New Zealand Labour Party led government find a different course? Jacinda Ardern worked in Tony Blair’s policy unit, so she is well placed to know what not to do.

New Zealand Coalition Policies

The 2017 General election in New Zealand was on 23rd September; and the final result, including all “special” votes was announced on 7th October. The parties involved announced the coalition / cooperation agreements to form a Labour-led government on 19th October, with the Labour / New Zealand First and Labour / Green agreements being signed and released on 24th October. That is eighteen (18) days from the final result being known to the formation of a new government. This is in stark [and favourable] contrast to Germany where elections were held on 25th September and agreement on the next coalition government is not expected before Christmas. I assume that is Christmas 2017, though Belgium managed to take 541 days to form a government in 2010/11.

However, it is not clear what policies have been agreed. The agreement documents between and labour and NZ First, and Labour and Greens, specify those policies of NZ First and Greens that will be pursued by the new government in addition to Labour’s policies. There is only one Labour policy that has been dropped, water charges for farmers, as specified in the agreement with NZ First. This cannot be true!

There are significant spending commitments in these agreements. For instance; the agreement with NZ First includes a NZ$1BN pa regional development fund, and a NZ$20 per hour minimum wage (which the government will be paying many of its employees directly and contractors indirectly). The Green agreement has expensive commitments on housing and mental health. The money cannot be there for the entire Labour program (less the revenue that would have come from the water charges for farmers) and the additional policies from NZ First and Greens.

There is, of course, the wrinkle that we do not actually know what the Labour policies are. They never issued a manifesto, in common with the other parties. We are supposed to make what we can of; their website, the alternative budget they issued during the campaign, and various speeches, post, tweets and interviews. Remembering that they made significant changes even after advanced voting had begun, most notably by withdrawing a policy to implement the outcome of a review on capital gains tax before the next general election.

Does this matter? Maybe not, as there will have to be a budget in due course. However, The Labour, NZ First and Greens have raised expectations in a way that cannot be met. Even more so than is normal in the democratic process. Electorates around the world are becoming much more demanding, in a way that the established liberal elites are not handling well. Maybe that process just accelerated in New Zealand.