Archive for the ‘International Politics’ Category

Bad decisions have consequences

February 12th, 2016 at 3:00 pm by David Farrar

Stuff reports:

Tara Nettleton, the widow of Australian Islamic State terrorist Khaled Sharrouf, has died in Syria from complications associated with appendicitis.

The former Sydney woman is believed to have died some time ago after she was unable to access life-saving health services.

It is believed that the mother of five was living in Raqqa with four of her children and one grandchild after the death of her husband as recently as last year.

Tara’s husband Khaled Sharrouf slipped out of Australia in December 2013 using his brother’s passport and joined Islamic State, meeting up with his friend and fellow terrorist, Mohamed Elomar.

Tara and their children followed via Turkey soon afterwards.

So she willingly chose to go t Syria from Australia. She was not forced or coerced.

Sad that she is dead, but bad decisons often have consequences. She chose to leave a country with excellent health care to go live in the Islamic State.

Mr Van Alst told Fairfax Media that Karen said the second worst day of her life was knowing her grandchildren and great grandchild didn’t have her there to look after them.

He and Karen are now most concerned about Tara’s children, who are just “innocent Australian kids”, he said.

They were once.Are they today?

Sharrouf achieved global notoriety when he tweeted a picture of his son holding the severed head of a Syrian solider captioned “that’s my boy”.

The photo, posted by a Twitter account then believed to belong to Elomar, spruiks him as the “young cub of the Islamic State”.

In June last year, Karen Nettleton told Fairfax Media how she was watching television at home when she received a text message from Tara’s eldest daughter Zaynab. The teenager had just become the widow of her husband Elomar.

“Hello Nana, how are you? My husband got hit by a drone yesterday and got killed. When I found out I was happy for him to get what he wanted and go to paradise but at the same time I was devastated because I loved him so much and I knew I was never gonna see him again in this life.”

There may be hope for the kids, but they may now be fully radicalised.

Nettleton said last June her daughter and grandchildren were in need of help more than ever.

“[They] more than ever need the love and care of their family to help them recover from the trauma, abuse and terrors of war they have experienced,” she said.

Their family haven’t done a great job to date.

UK to ban taxpayer funded lobbying

February 12th, 2016 at 12:53 pm by David Farrar

The Telegraph reports:

Charities in receipt of Government grants will be banned from using these taxpayer funds to engage in political lobbying, The Telegraph can disclose.

A new clause to be inserted into all new and renewed grant agreements will make sure that taxpayer funds are spent on improving people’s lives and good causes, rather than covering lobbying for new regulation or using taxpayers’ money to lobby for more government funding.

We  need to do this in NZ also. In theory NGOs are not allowed to use taxpayer funds to lobby, but the rules are so loose, they get easily avoided by just calling their lobbying campaigns “information campaigns”.

The Institute of Economic Affairs, a right of centre thinkank, has undertaken extensive research on so-called “sock puppets”, exposing how taxpayers’ money given to pressure groups is paid to fund lobbying campaigns on policies such as a sugar tax and the environment.

Officials are hoping that the clause will ensure that freedom of speech is protected, while stopping taxpayers’ money being diverted away from good causes.

Matt Hancock, the Cabinet Office minister, told The Telegraph: “Taxpayers’ money must be spent on improving people’s lives and spreading opportunities, not wasted on the farce of government lobbying government.

It is constitutionally repugnant for the Government to spend money funding campaigns to tell Parliament and the Government what the law should be.

The exact phrase that will be inserted into all new and renewed grant agreements reads: “The following costs are not Eligible Expenditure:- Payments that support activity intended to influence or attempt to influence Parliament, Government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action”.

At a minimum this should go into all contracts here.

I’d go further and deem any NGO that is 90% or more taxpayer funded as a de facto public organisation that the OIA applies to.

What has happened to England?

February 12th, 2016 at 9:00 am by David Farrar

Sky News reports:

A case of female genital mutilation (FGM) is reported in England every 109 minutes, official health figures show.

Some 2421 instances of mutilation were reported from April 2015 to September 2015 – the latest full six months of figures published by the Health and Social Care Information Centre (HSCIC).

Experts say the figures, released on the eve of the International Day of Zero Tolerance for FGM on Saturday, are just the ‘tip of the iceberg’.

 Plan UK is a charity that campaigns against the practice and collated the figures.

Its chief executive, Tanya Barron, said: ‘FGM has been a hidden danger threatening girls in the UK and around the world – only now is the full scale becoming clear.’

But she warned there were still many ‘unseen, unheard cases’ that didn’t show up in official statistics.

One case every 109 minutes. That is appalling. There should be zero tolerance for this, and prosecutions for those responsible.

No tag for this post.

The UK EU deal

February 11th, 2016 at 8:41 am by David Farrar

The Telegraph reports:

Cabinet ministers are threatening to defy David Cameron by publicly speaking out against his deal with the European Union, which they are warning will fail to cut migration.

The Prime Minister was handed an offer on Tuesday by Brussels which critics said contained only “watered-down” pledges. The deal will give EU migrants “gradually increasing access” to benefits after they come to the UK – as opposed to the outright ban Mr Cameron had previously demanded.

Despite critics describing the deal as “pathetic” and “insubstantial”, Mr Cameron welcomed the offer by Donald Tusk, the president of the European Council, and said he “sure would” take the deal being offered.

Last night Cabinet sources accused Mr Cameron of effectively beginning the campaign for Britain to stay in the EU and warned that they will now start speaking out in favour of a “Brexit”.

Cameron has in fact managed to get some reasonable concessions. It remains to be seen whether the electorate judge them to be enough.
But in a boost to him, Theresa May has said she will now campaign to remain in. She was seen as a potential leader for an out campaign.
The main points of the deal are:
  • An emergency brake will limit migrants’ access to benefits for four years
  • New powers to stop suspected terrorists and criminals coming to the UK, not only if a threat is “imminent”
  • New rules will stop people coming to the UK via “sham marriages”
  • Recognises that the UK “is not committed to further political integration into the European Union”
  • A “red card” system will allow the House of Commons to band together with like-minded EU parliaments and block unwanted Brussels legislation

6 takeaways from the beginning of the U.S. Presidential primaries

February 7th, 2016 at 6:48 pm by kiwi in america

On Tuesday February 2nd, Iowa held its caucuses for both parties formally kicking off the US 2016 Presidential primary election season. First off a disclaimer: I am a Rubio supporter and decided to support him pretty much from the beginning of the GOP debates. With only one result in the bank, we have learned some key things about the race for each party’s nomination.

1 – New Hampshire is more important than Iowa.

This is particularly true on the Republican side. There are two reasons for this. First is that Iowa (IA) holds caucuses and New Hampshire (NH) holds primaries. The significance of the difference is turnout. Caucuses are a gathering of party supporters in a given area (caucus locations mostly match party voting precincts and would have a concentration analogous to the concentration of NZ election polling booths). Organizers for each campaign stand in designated corners of a hall and ask those caucusing to come to their side to be counted. The tallies for each location are then called in to a central location for the final result. Caucuses are usually held in the evening and can be time consuming as you have to register for the party you nominate and that can take some hours before the actual caucusing begins. The time consuming nature of the voting method, the restricted time the vote is held (versus a primary where polls are usually open for 12 hours) and the public nature of your vote in that everyone in the hall can see who you support versus a private ballot in a primary, means the turnout in caucuses is significantly lower than in a primary. In 2012 a total of 121,500 Republicans voted in the Iowa caucus and that represented 19% of all IA registered Republicans. IA had a population of 3,074,000 in 2012 so that’s only 4% of the total population. By contrast in NH with a population of only 1,320,718, in 2012 the GOP turnout at the primary was 225,123 so at 17% it is four times higher than in IA. It’s a crude metric because NH allows Independents to vote in either primary and about 40% of registered voters in NH are independents but you get the drift – more voters vote in primaries than caucuses so in the case of the NH primary, from a statistical point of view, the result is pulling off a larger sample base.

The Iowa GOP caucuses are also much more dominated by evangelical Christians which explains the early victories of Huckabee (2008), Santorum (2012) and Cruz (2016). NH has a demographic breakdown more akin to the wider U.S. General Election population and that explains why, on the GOP side, winners of the GOP primary in NH are very much more indicative of who the eventual winning nominee will be than the winners in IA. Of the 9 elections since 1980, the GOP NH primary has successfully picked 8 out 9 GOP nominees whereas in IA, the figure is only 5 from 9. On the Democrat side, the IA caucus has picked the nominee 7 out of 9 times versus only 6 from 9 in NH so the IA caucus is more determinate for the Democrats whereas the NH primary is more so for the Republicans.

2 – Hillary is a lousy campaigner but, barring an indictment, will still win the Democratic nomination.

Clinton eked out the narrowest of victories over Sanders on Tuesday. In fact, she may have actually lost because reportedly 6 precincts had anecdotal reports of a tied vote that was decided by a coin toss and Clinton won 5 of the 6 coin tosses. Had the coin tosses been 50/50 then Sanders may have won by a whisker. It was of course not meant to be like this. Clinton has all the advantages on paper: a massive donor edge, endorsements of most major party leaders, the support of the DNC (the national party organisation), name recognition beyond any prior candidate for President, a crack campaign team who had supposedly learned key lessons from her 2008 defeat to Obama and her still popular husband Bill (who remains a formidable retail politician) campaigning for her. These advantages were supposed to negate her wooden speaking style and her perpetual inauthenticity. However, her campaign has been beset by pratfalls: a disastrous book launch tour in the summer of 2015, her tone deaf comment about being broke after leaving the White House and, as the summer wore on, the emerging evidence of her home brew email server through which she routed sensitive State department emails that has become a running and growing scandal. When played against the parallel but less publicized scandal of the cash for favours roundabout that Billary ran with their Foundation scoring tens of millions in speaking fees for both Bill and Hillary and mingling the supposed charity work of the Foundation and Hillary’s work as the 4th most powerful member of the U.S. government as Obama’s Secretary of State from 2009 to 2013. Hillary’s explanations for her non authorized email system, designed to shield her from Congressional scrutiny, have proven to be patently false particularly, as it has recently emerged in the gradual release of emails forced from the State Department by a lawsuit from Judicial Watch (a right wing lobby group), that a good number of emails were afforded a security classification so top secret that some on the Congressional committees tasked with oversight did not have sufficient clearance to be advised of their content and that even redacted copies cannot be released. When you have the FBI investigating you for causing serious breaches of extremely sensitive classified material and you told the families of the four State Department employees were killed in the 12 September 2012 raid on the US Consulate in Benghazi, Libya because of uprisings fueled by an obscure anti Muslin video and not the security lapses that she knew about from the outset, you have major credibility issues. This is why an awkward nerdy aging socialist Senator from one of America’s smallest states is getting huge crowds, a wave of on line donors and has not been easy for her to beat.

BUT, for all of Clinton’s manifest failings, she has advantages that should carry her through to the nomination. She is highly likely to lose the NH Democrat primary to Sanders next week but that is mostly due to Sanders’ high profile in New England (Vermont adjoins New Hampshire). The next primary (aside from the obscure Nevada caucuses that produce few delegates) is the South Carolina primary. That is dominated on the Democrats side by black voters who are more inclined to support Clinton over Sanders. After SC is Super Tuesday comprising 14 States and the single largest group of states voting on the same day. Clinton has a natural advantage on Super Tuesday due to her vastly superior ground game and the larger amount of cash on hand to contest in so many states simultaneously. The delegate lead that Clinton should build by the second week in March could be insurmountable for Sanders whose grassroots funding will wither if it looks like he cannot prevail. BUT – if Clinton is indicted for the various breaches of intelligence confidentiality laws by the Department of Justice as a consequence of the FBI’s investigation into her exclusive use of her non-secure email server (and subsequent unauthorized sending of highly classified material via this unsecure network) then all bets are off. Her campaign would be finished.

3 – Trump is not done

Trump has been the most unconventional candidate to run for President since Ross Perot ran as an Independent in 1992 and 1996 (his campaign split the conservative vote allowing Clinton to win with only 42% and 47% of the popular vote respectively). He has broken all the rules and conventions of U.S. politics and got away with it. He engaged in blatant mysogony by insulting popular Fox TV presenter Megyn Kelly by accusing her of erratic ‘time of the month’ behaviour, he mocked a disabled reporter, he insulted Senator John McCain’s widely admired time as a tortured prisoner of the Viet Cong in the Vietnam War, he routinely abuses the press and verbally beats up on reporters who follow MSM standard gotcha questioning tactics, he proposes extreme sounding policies that appear to be right wing dog whistles (mass deportation of illegals or banning all Muslim migration for a period of time), he ignores and mocks PC conventions, he routinely accuses his opponents of things that aren’t factual (Cruz being ineligible because he was born in Canada), he largely self-funds and eschews and then taunts the entire GOP donor class, he gets into several fights with Fox News culminating in his boycotting the last Fox moderated GOP debate before Iowa (because Kelly was presenting) and he summed up his seeming invincibility in the polls by saying his supporters would stick with him even if he shot someone on 5th Avenue in New York! Despite Trump’s bombast, his abuse of reporters and opponents, his flip flopping on so many key issues (was all for single payer health system now opposes Obamacare that is less government intrusive than single payer and is now against abortion when he was for it), his being a Democrat for so long, being so close to the Clintons and his seemingly flakey policies and inability to grasp important foreign policy issues waved away with a “trust me – I’m a great deal maker and will hire the right people who will advise me”, Trump has defied political gravity for month after month. Most of the talking heads and commentators even on the right predicted a Trump implosion that not only never happened but with each seeming career ending move, he would go UP in the polls.

Kiwis, even those on the centre right, look on with shocked bemusement wondering how Trump could survive. To understand Trump’s rise, you must understand the intense frustration felt by many Republican voters. They watched their party’s mainstream leaders mock, marginalize and block the Tea Party movement and they’ve seen House and then Senate Republicans, once they assumed control of first the House (2010) and the Senate (2014), then cave to Obama and the Democrats on issue after issue of concern to the Republican base (the debt ceiling, sequestration and funding the military, repealing or at least constraining Obamacare, the Corker-Cardin deal on the Iranian sanctions, defunding Planned Parenthood – especially after the damning undercover videos, Islamic refugees and general lack of fiscal rectitude). The anger is palpable and Trump’s ‘take no prisoners’, say it how it is, politically incorrect truth to Republican power is music to the ears of a base that feels ignored and spurned by former Speaker John Boehner and Senate Majority Leader Mitch McConnell. Some of this group had dropped out of the political process as witnessed by the numbers of GOP voters who stayed home rather than vote for Romney in 2012. Trump also draws from blue collar workers who were Reagan Democrats who find the modern Democratic Party too left wing and captured by special interest groups to ever represent them. Add in his flamboyance, his mystique and perceived success as a billionaire and his name brand recognition from his popular reality TV show “The Apprentice” and you have the makings of a resurgent candidate. All Trump needed was a willing media to report his every outburst and comment and the U.S. media duly obliged. Like a real life soap opera going on in real time, half in disgust and half in morbid fascination, the MSM have enabled and fueled Trump’s rise and rise. By reporting his every move and comment, Trump has sucked the political oxygen out of the room for his opponents.

But in the end, there are SOME political niceties that must still be followed and one of these is a ground game and Iowa is a state where campaign boots on the ground is essential for success and Cruz and Rubio were head and shoulder above Trump in that regard. NH is more philosophically attuned to a Manhattan elite candidate so it would not surprise if Trump does win there but, we have learned from IA that he has underperformed from his polling average by some 5%. This could be because his supporters are happy to tell pollsters they love Trump but don’t actually show up because Trump’s campaign don’t even know who his supporters are or where they live.

Earned media will continue to give Trump a tail wind. But if Rubio’s surge continues and Cruz stays steady, Trump could face a length 3-way race even past Super Tuesday. Another reason why Trump will stay is because of a very important change to the Republican nominating process that was instituted post 2012 and that is that all primary/caucus states pre-March 15th must award delegates on a proportional basis whereas all Republican primaries (and caucuses) prior to 2016 were winner-take-all contests. In comparison, the Democrats have been gradually moving to a proportuional allocation culminating in a full slate of primaries and caucuses in 2008 chosen this way. It was this reform that enabled Obama to beat Clinton. He racked up proportional wins in caucus states where his ground game was superior to Clinton whilst she concentrated on the big primary States. By the time the Pennsylvania, Texas, California and New York primaries came around, Obama had amassed a near unsurmountable lead that could not be overtaken even when Clinton won a number of larger later states because she only won a proportion of the delegates on offer. A winner-take-all system favours an early front runner who can quickly amass delegates and drive his/her competitors out of the race.

Trump knows even if he slips from the No 1 slot that he will still amass delegates in all the voting that goes on prior to mid-March and leave him with enough delegates to soldier on. Trump is self-funded and so will be unaffected by the usual drop off in funding that occurs if a leading candidate funded by donors starts to slip in both the polls and actual primary votes. Even if Trump slips to 3rd later in the race but wins several key early states (say NH and SC), he could continue in the race to Super Tuesday and exert an influence on the eventual outcome denying a Cruz or Rubio campaign an outright plurality of delegates. This is why Trump is here to stay.

4 – Bush will not be the nominee

He didn’t make double digits in IA despite spending big. He’s spent even bigger in NH and is still polling just under 10% in the RCP average of all polls and is 5th behind Kasich. If the results in NH are similar to the polls (see point number 6), he’s toast. Bush has been the biggest victim of the Trump resurgency (along with a clutch of capable and articulate and mostly successful sitting Governors: Walker from Wisconsin, Perry from Texas and Jindal from Louisiana). Trump starved all of them (but particularly Bush) of valuable media oxygen all through the summer and autumn and Bush’s big early war chest has been unable to claw him out of the hole. Bush declared early and jumped to a strong lead and was favoured by the donor and chattering beltway classes and it went to his head. He, like many, waited for Trump to implode and Trump cleaned his clock. Bush sat on $70 million+ for months and did virtually nothing to challenge Trump assuming his pratfalls would collapse his vote. Now he is spending millions attacking Rubio in NH – not the strategy of a rising star. His absence from the political stage for 9 years since he was Governor of Florida showed in his initially hesitant debating style. Negatives such as being seen as soft on illegals and for the controversial Common Core can not be counterbalanced by his story of considerable success as Florida Governor and then there’s the mostly negative legacy of the Iran and Afghanistan wars his older brother got America into. At the end of the day, who really wants to see a rerun of Bush v Clinton. He’ll be out by or just after Super Tuesday.

5- Rubio is the best GOP General Election candidate

That’s what the head to head polls say although such polls at this stage are premature. That said, in watching Rubio debate, it is hard not seeing him eat Hillary Clinton’s lunch. He is a formidable debater. Yes, so is Ted Cruz but in a much more technically pure way where it’s obvious he was the champion debater in high school and university. Rubio however is rawer, visceral and at the same time fluid. He possesses the rare talent that few politicians have (like Reagan, Clinton and Blair) to boil down complex hot button issues of the day into a pithy and emotive sound bite. His back story is superb (son of the impoverished Cuban immigrant), he speaks passionately about the American project, he is telegenic and boyish and yet exhibits an almost breathtaking depth of knowledge particularly on foreign affairs. He is a whole generation younger than Clinton and is a visionary forward thinker who dwells on sunny up lit plains territory whereas Clinton comes across as an old hack deeply mired into everything wrong with U.S. politics and the grab bag of identity and grievance politics that is the hallmark of the modern progressive left. Democrat operatives fear Rubio the most for these very reasons and it’s not hard to see why.

Rubio is still vulnerable most particularly for his support for the so-called Gang of 8 immigration amnesty proposal that came out of a bipartisan Senate effort but was killed by the GOP controlled House and for his relatively short time in the U.S. Senate. But despite this, and his support for corporate welfare canards such as sugar subsidies (a big industry in his native Florida) and the ethanol mandates so big in Iowa, he seems to be peaking just about the right time. He exceeded expectations in Iowa and entry polls (the caucus equivalent of exit polls) saw him pick up late deciding voters in IA 2:1 over Trump and Cruz. He came within 1% of pushing Trump into 3rd place and he seems to be enjoying a statistically measurable bounce coming into the NH primary. This against the backdrop of sustained attacks from Cruz, Bush and Christie.

Will GOP primary voters forgive Rubio for the ‘sin’ of the Gang of 8? Rubio has uttered many mea culpas and stronger more hawkish rhetoric on this subject as have all the candidates since Trump’s more extreme proposals gained traction. He is racking up high level endorsements: several of the former candidates who are sitting Governors have endorsed him (Walker and Jindal) as has recent drop-out Senator Rick Santorum. He scored the conservative wing’s new darling African-American freshman Senator from South Carolina Tim Scott. There are whisperings that Mitt Romney may endorse Rubio as early as this weekend if it looks like he gets within striking distance of Trump. Romney was Governor of neighbouring Massachusetts and many residents of NH are in the Boston TV station viewing range plus Romney has long owned a cabin the NH woods so he is well regarded in the Granite State. Romney’s endorsement, whilst an anathema to the more conservative followers of Cruz, would play very big amongst the more moderate centrist NH GOP primary voters many of whom are independents. An upset win in NH (or running a very close 2nd to a weakening Trump) would propel Rubio to the front of the race especially if Kasich and Christie drop out. Rubio has many electoral strengths and few damaging weaknesses especially when you factor in the more moderate centre that must be won to win the Presidency. His final trump card (pun intended) is he is Hispanic and he could improve on George W Bush’s high-water mark of winning 42% of Hispanics in 2004 (versus the low point of the 27% Romney got in 2012). Yes, Cruz is Hispanic too but his more abrasive combative style is going to be easier for the Clinton camp to exploit than Rubio’s breezy eloquence. Greater electability versus Clinton in the General is a potent argument and Rubio is exploiting it to the hilt.

Primary polls are notoriously unreliable and yet are still reported as if they are

Polling in general has become a more difficult business across the globe even in general elections. Pollsters missed the late surge to National in the NZ 2014 election, the Conservative win in the UK 2015 election, the scope of the GOP wave in the 2014 mid-term elections and the easy Likud victory in the 2015 Israeli elections. Polls for U.S. primary elections are even more fraught for a variety of reasons. The sample sizes tend to be smaller for most (but not all) polls so the margins of error are higher. Primary voters are fickler and a much higher percentage make up their mind at the last minute compared to general elections. Late breaking surges for a particular candidate are missed or more frequently, their extent is understated. This is because of the tighter time frames over which primary polls are often conducted (which is part of the reason why their sample sizes are smaller). Polls conducted in the next major primary/caucus state right after the previous state results are often tainted by the immediate euphoria and media reporting binge surrounding the victory or failure of specific candidates which has the effect sometimes for instance, of overstating the support of an Iowa winner over a candidate that will be more popular in New Hampshire. But if a pollster waits for the post primary vote reporting frenzy to dissipate, they may have too small a window in which to accurately poll before the next vote. And then add into the mix in New Hampshire the fact that over 40% of registered voters are Independents and that NH electoral law allows Independents to vote in either the Democrat OR Republican primary (but not both), one of the hardest things to predict (because the ratio of Indies voting in Dem or GOP primaries swings from election to election based on how competitive the ballot is for each party) is not only WHO Independents will vote for but even which contest they will enter. In a small state like NH, these swings to GOP over Democrat (or vice versa) can bring a larger than expected number of voters into a specific party’s race and if there is a late surge to one candidate in that party’s race, it is much more difficult for pollsters to pick that up. Bottom line: treat the NH polls in the lead up to Tuesday February 9 primary in New Hampshire with a grain of salt.

Australian High Court rules in favour of off shore detention

February 5th, 2016 at 3:00 pm by David Farrar

The SMH reports:

The High Court has ruled that Australia’s offshore detention regime at Nauru and Manus Island is lawful, dashing the hopes of asylum seekers that detention centres would be closed and they would be settled in Australia.

This ruling will save lives. The hardline policy has stopped hundreds of people from drowning by trying to reach Australia.

Here’s the deaths by drowning by year:

  • 2015: 0
  • 2014: 0
  • 2013: 236
  • 2012: 421
  • 2011: 235
  • 2010: 168
  • 2009: 132

The drop to zero for two years in a row is not a coincidence. It is a direct reflection of removing the incentive for people to pay tens of thousand of dollars to people smugglers.

The full bench of the High Court on Wednesday ruled that the federal government has the power under the constitution to detain people in other countries, finding that its conduct was within the law.

Prime Minister Malcolm Turnbull has been under pressure to allow child asylum seekers to stay in Australia regardless of the court’s decision. The Greens said on Wednesday that forcing their return amounted to “child abuse”.

No child abuse is when they drown at sea because they are incentivised to try and sail to Australia.

Rhodes stays

February 2nd, 2016 at 3:00 pm by David Farrar

Dan Hannan writes in The Telegraph:

With some embarrassed throat-clearing, Oriel College has announced that it won’t, after all, be tearing down the statue of its controversial Victorian benefactor, Cecil Rhodes. A small knot of angry students had been demanding that the offending stonework be removed, because they suffered “violence” every time they had to walk past it. Rhodes, they said, was a racist, an imperialist and a symbol of colonial oppression.

Unbelievably, instead telling them to mind their own business, the authorities at my former college launched a consultation exercise about what to do with the statue. The wholly unsurprising answer came back, from students and former students of all ethnic backgrounds, that the statue should stay. Most Orielenses understood, even if the protesters didn’t, that accepting a bequest in 1902, and honouring the benefactor, doesn’t mean endorsing his opinions today.

Exactly. Should we tear down the statues of George Washington because he owned slaves?

James Delingpole also writes:

The #RhodesMustFall campaign by loony entitled race hustlers to topple a statue of Cecil Rhodes at Oriel College, Oxford,  of one of the university’s most generous benefactors has failed.
Donors were so furious at Oriel College’s cowardice in the face of this student activism that they threatened to withdraw millions of pounds in bequests.

Right decision; wrong reason.

The Oriel College authorities could have said no to #RhodesMustFall because it was orchestrated by a bunch of chippy, ungrateful, politically correct, spoilt, vexatious, posturing bullies with connections to some of the most viciously unpleasant elements in the cess pool of South African politics.

They could have argued that Cecil Rhodes was a man of his time and that it’s quite ludicrous to judge a hero of the Great Imperial Age by the standards of the age of safe spaces, “Islamophobia” and Caitlyn Jenner.

They could have stood up for the principle that students may come and go but the fabric of the University and the generosity of its benefactors must remain inviolate from wanky posturing by early twentysomethings whose frontal lobes haven’t been properly formed.

Instead, though, Oriel College’s decision was motivated not by high principle but by terror and desperation at losing so much money.

Oxford University is no the institution it once was. They should have just ignored the radical activists, rather than give them legitimacy. The end result is Oriel College looks silly.


Clark vs Rudd

February 2nd, 2016 at 12:00 pm by David Farrar

The Herald reports:

Malcolm Turnbull’s Australian cabinet may overturn a commitment given by former Prime Minister Tony Abbott to back Helen Clark for Secretary General of the United Nations if she becomes a candidate, according to The Australian newspaper.

The paper revealed that Mr Abbott and Prime Minister John Key committed in letters to conduct a joint strategy to promote Ms Clark as the successor to Ban Ki-Moon whose term ends at the end of this year.

But that commitment looks set to be compromised by two factors: Mr Abbott did not consult his Foreign Minister, Julie Bishop, before giving the undertaking to Mr Key.

And former Australian Prime Minister Kevin Rudd has made it known he is interested in the job.

Ms Clark has not publicly expressed her interest in the job but it is an open secret she would like it and Mr Key would not have been seeking Australia’s help without her consent and private ambition for the post.

Mr Key has publicly expressed strong backing for her, should she put up her hand.

I think it is good that the NZ Government will back Clark for the job. I do wonder though whether a Labour-led Government would be so supportive of a former National PM. I suspect not.

According to The Australian, the letter Abbott wrote to Mr Key said Ms Clark would prove “a strong voice at the top of the United Nations” and that she had “the leadership, management skills and purpose to drive the United Nations forward for the benefit of the entire international community.”

If Mr Rudd sought the post, Australia would be obliged to support him.


Kevin Rudd was sacked by his own caucus and colleagues because he was impossible to work with. Why on Earth would the Australian Government think he could be Secretary-General of the UN – a job where good relationships are critical.

Socialism working well

February 2nd, 2016 at 9:00 am by David Farrar

The Washington Post reports:

The only question now is whether Venezuela’s government or economy will completely collapse first.

The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever. Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.

Chavez, the hero of the left is dead but his legacy lives on.

That’s not an easy thing to do when you have the largest oil reserves in the world, but Venezuela has managed it. How? Well, a combination of bad luck and worse policies. The first step was when Hugo Chávez’s socialist government started spending more money on the poor, with everything from two-cent gasoline to free housing. Now, there’s nothing wrong with that — in fact, it’s a good idea in general — but only as long as you actually, well, have the money to spend. And by 2005 or so, Venezuela didn’t.

Spending money you don’t have.

Why not? The answer is that Chávez turned the state-owned oil company from being professionally run to being barely run. People who knew what they were doing were replaced with people who were loyal to the regime, and profits came out but new investment didn’t go in.

A good reason for Governments not to own businesses.

Even triple-digit oil prices, as Justin Fox points out, weren’t enough to keep Venezuela out of the red when it was spending more on its people but producing less crude. So it did what all poorly run states do when the money runs out: It printed some more. And by “some,” I mean a lot, a lot more.

The policy Russel Norman was promoting – just print more money.

It turns out Lenin was wrong. Debauching the currency is actually the best way to destroy the socialist, not the capitalist, system.


There’s a good reason for that. Venezuela’s government has tried to deny economic reality with price and currency controls. The idea was that it could stop inflation without having to stop printing money by telling businesses what they were allowed to charge, and then giving them dollars on cheap enough terms that they could actually afford to sell at those prices. The problem with that idea is that it’s not profitable for unsubsidized companies to stock their shelves, and not profitable enough for subsidized ones to do so either when they can just sell their dollars in the black market instead of using them to import things. That’s left Venezuela’s supermarkets without enough food, its breweries without enough hops to make beer, and its factories without enough pulp to produce toilet paper. The only thing Venezuela iswell-supplied with are lines.

This is the NZ under Muldoon that some people think were the good old days.

And it’s only going to get worse. That’s because Socialist president Nicolás Maduro has changed the law so the opposition-controlled National Assembly can’t remove the central bank governor or appoint a new one. Not only that, but Maduro has picked someone who doesn’t even believe there’s such a thing as inflation to be the country’s economic czar. “When a person goes to a shop and finds that prices have gone up,” the new minister wrote, “they are not in the presence of ‘inflation,’ ” but rather “parasitic” businesses that are trying to push up profits as much as possible. According to this — let me be clear — “theory,” printing too much money never causes inflation. And so Venezuela will continue to do so.

Looks like Venezuela is going to go the way of North Korea.

January Public Polls

February 1st, 2016 at 11:00 am by David Farrar


The January Curia newsletter is out. The summary is:

Curia’s Polling Newsletter – Issue 93, January 2016


There was one political voting poll in January – a Roy Morgan.


The average of the public polls has National 19% ahead of Labour in January, down 1% from December. The current seat projection is centre-right 59 seats, centre-left 51 which would see the Maori Party hold the balance of power.

We show the current New Zealand poll averages for party vote, country direction and preferred PM compared to three months ago, a year ago, three years ago and nine years ago. This allows easy comparisons between terms and Governments.

In the United States as voting in primaries is about to start Donald Trump leads by 7% in Iowa, 215 in New Hampshire, 16% in South Carolina and 14% in Nevada.

On the Democratic side Clinton leads by 4% in Iowa, Sanders by 13% in New Hampshire and Clinton by 30% in South Carolina.

In the UK there is only a 6% chance of a Labour-led Government.

In Australia since the accession of Malcolm Turnbull, the Coalition has maintained a strong lead over Labor, with an election due within the year.

In Canada despite gloomy economic news, a plurality of Canadians think Canada is heading in the right direction.

We also carry details of polls on US ship visits plus the normal business and consumer confidence polls.

This newsletter is normally only available by e-mail.  If you would like to receive future issues, please go to to subscribe yourself.


Karl du Fresne on Islamic refugees

January 29th, 2016 at 1:00 pm by David Farrar

Karl du Fresne writes:

Let me see if I can get this straight. Millions of oppressed, dispossessed Muslims have risked their lives fleeing the Middle East and North Africa.

They are mostly victims of Islamic regimes from a part of the world where democracy is virtually unknown (Israel aside). They are escaping sectarianism, persecution, civil war, anarchy, corruption and starvation.

None of them want to go to other Islamic countries. Why would they, when Islam represents all that they’re trying to get away from? …

Besides, hardly any Islamic regimes offer them refuge. With the honourable exceptions of Lebanon and Jordan, most Islamic countries – including some that are fabulously wealthy – appear impervious to the suffering of their co-religionists.  

No, the place these Islamic refugees want to be is Europe – Western Europe, to be precise. And what attracts them there? Presumably freedom, for a start. 

Western Europe is democratic. People actually elect their governments. The rule of law is enforced not by religious zealots but by courts that apply principles of fairness and impartiality.

In Europe, people’s prospects don’t depend on having been born into the right sex, religious sect or clan. They enjoy civil rights – the right to dress the way they want, to vote, to speak their minds, to have educational opportunities, to drive cars and enter into romantic relationships without fear of being murdered in “honour” killings. 

And presumably these refugees are also attracted to capitalism, because more than any other “ism” it gives them the greatest chance to fulfil their human potential.

You can understand why they want to come to Europe.

So, having been drawn to this benevolent part of the world where people enjoy freedom, opportunity and prosperity, what do they do? 

A large number of them, it seems, immediately want to replicate the conditions that they’ve just fled from. This is the bit that I just don’t get.

As events in Germany on New Year’s Eve showed, the first impulse of many young Islamic men is to abuse the hospitality extended to them. 

Some, of course, go much further than orchestrated sex attacks on young women. They want to murder the infidels who have given them shelter and succour. 

Things just don’t add up here. Why would anyone flee a cruel and repressive society, then seek to undermine the democratic institutions of their host country so that it might become another Muslim theocracy? How perverse is that?

They say Islam isn’t to blame for the barbaric acts carried out in its name, but that’s only partly true.

Yes, many Muslims respect Western institutions and want only to live in peace in the countries that have accepted them. They understand that freedom to practise their religion is one thing; the right to impose it on their host society is quite another. These Muslims are welcome. 

But Islam cannot be exonerated of responsibility for the mayhem and slaughter in the Middle East, nor for the creeping contamination of Europe. The tenets of Islam provide a theological framework that enables groups like the Taleban, Al Qaeda and Isis to flourish.

I distinguish between Islam (the religion) and Islamism (the political system based on Islam).

Many Muslims are happy to practice their religion as a private thing and don’t want the law to reflect their religion. They just want the right to practice their religion.

But a large minority believe that the beliefs of Islam should be part of the law of a country. This may be sharia law, making apostasy a crime etc. This is Islamism.

I believe that Islamism is on a par with fascism and communism. They are incompatible with democratic liberal values. They all require an all powerful state.

I would not see any barrier in the way of Muslims migrating to any country, if they support democratic values.

But if they are Islamists. If they believe their religious beliefs should be enshrined in law. Then I think taking in such migrants is a stupid thing to do, as you weaken your country.

UK election spending

January 29th, 2016 at 10:00 am by David Farrar

UK spending

The data comes from here.

UKIP did the best for votes per pound spent and the Lib Dems the worst. Conservatives and Labour fairly close to each other.

In terms of spending per seats won the SNP did best by far followed by Conservatives and Labour. UKIP did the worse.

Corbyn commits further electoral suicide

January 28th, 2016 at 1:00 pm by David Farrar

The Telegraph reports:

The Falkland Islands should be handed back to Argentina as part of a “power-sharing” deal, Jeremy Corbyn has told South American diplomats.

Alicia Castro, Argentina’s outgoing ambassador in London, said that Mr Corbyn told her that he wants a Northern Ireland-style deal for the Falklands in which her country and Britain could govern over the islands together.

The plan, originally discussed with Mr Corbyn’s Argentine allies before he became Labour leader, has caused dismay amongst his critics in the Labour Party.

I’m not sure Labour could try any harder to lose than they are.

Doomsday scaremongers

January 28th, 2016 at 11:00 am by David Farrar

Stuff reports:

The Doomsday Clock remains at three minutes to midnight, but the world is a darker place.

The Bulletin of the Atomic Scientists on Wednesday (NZ time) announced an update on on the metaphorical clock in Washington DC that reflects how vulnerable the world is to catastrophe from nuclear weapons, climate change and new technologies.

When the time of three minutes to midnight was set in a meeting last year, it became the closest to oblivion that humanity has ever been.

The Doomsday Clock is a relic of the past that has no meaning today.

Up until 1990 when the world did face a real threat of global nuclear war, the Doomsday Clock was a useful indicator of how precarious things were. A global nuclear war could wipe out humanity.

But there is very very little possibility of a global nuclear war today. So to try and remain relevant they include climate change, which does indeed pose challenges, but is not an existential threat (unless you regard it in the same way as the sun dying one day is an existential threat.

“Three minutes (to midnight) is too close,” a statement said. “Far too close. We, the members of the Science and Security Board of the Bulletin of the Atomic Scientists, want to be clear about our decision not to move the hands of the Doomsday Clock in 2016: That decision is not good news, but an expression of dismay that world leaders continue to fail to focus their efforts and the world’s attention on reducing the extreme danger posed by nuclear weapons and climate change. When we call these dangers existential, that is exactly what we mean: They threaten the very existence of civilisation and therefore should be the first order of business for leaders who care about their constituents and their countries.”

The Paris Climate Summit and Iranian nuclear agreement were good news, but “constitute only small bright spots in a darker world situation full of potential for catastrophe”.

Well if that is not enough to turn the lock back, then probably nothing is.

My prediction is that they are so wedded to their doom mongering that they will never ever turn the clock back from three minutes to midnight. And inevitably they will find some excuse to turn it forward until it is on midnight, and then people will realise its just a meaningless stunt.


Trump defends Putin

January 28th, 2016 at 9:00 am by David Farrar

The Telegraph reports:

Donald Trump has defended Vladimir Putin after a British public inquiry found the Russian president “probably” sanctioned the assassination of Russian dissident Alexander Litvinenko in London.

Mr Trump waded into the case saying he had seen “no evidence” of Mr Putin’s involvement, adding: “They say a lot of things about me that are untrue too.”

The front-runner for the Republican presidential nomination has previously said he felt a “great honour” when Mr Putin praised him as an “absolute leader”.

A 327-page report released last week by retired High Court judge Sir Robert Owen concluded Mr Litvinenko was murdered by former KGB agents Andrey Lugovoy and Dmitri Kovtun.

But Mr Trump told Fox Business: “Have they found him (Mr Putin) guilty? I don’t think they’ve found him guilty. If he did it, fine but I don’t know that he did it.

“You know, people are saying they think it was him, it might have been him, it could have been him. But in all fairness to Putin – and I’m not saying this because he says ‘Trump is brilliant and leading everybody’ – the fact is that he hasn’t been convicted of anything. Some people say he absolutely didn’t do it.

This just shows how appalling Trump is. Putin controls the Russian state so of course no court in Russia would find him guilty of anything, just as no authority would ever charge him – unless  they wanted to end up dead also.

Also Trump has now pulled out of the next Fox News debate because they won’t give in to his demands to veto Megan Kelly as a moderator. Her sin was asking him tough questions in the last debate. His response is to call him a bimbo on Twitter. Just imagine a guy so thin skinned with a nuclear arsenal!

EU says most asylum seekers are not genuine refugees

January 27th, 2016 at 10:00 am by David Farrar

The Telegraph reports:

Six in 10 migrants arriving in Europe are economic migrants with no right to asylum, one of the EU’s most senior officials has disclosed.

Frans Timmermans, the first vice president of the European Commission, said that the majority of those coming to the EU are not fleeing war or persecution.

Many are Tunisians or Moroccans who were joining the migrant trail through Turkey, he said, and they must be deported if the public is to consent to aiding asylum seekers.

How do you deport 600,000 people a year? Each one can appeal and appeal and the time and costs will be beyond belief.

This is why you need a secure border, and genuine refugees should be encouraged to go through the UNHCR system, rather than just turn up at the border.

More people die trying to get to Europe

January 24th, 2016 at 1:00 pm by David Farrar

Stuff reports:

At least 43 people, including 17 children, drowned when their boats capsized off two Greek islands near the Turkish coast on Friday (Saturday NZ Time), coastguards said, marking one of the deadliest days for migrants risking the perilous route to Europe from Turkey.

According to survivors’ testimonies, dozens were on board a wooden sailboat which went down off Kalolimnos, a small island in the Aegean Sea close to Turkey’s coast, one coastguard official said.

Twenty six people were rescued and at least 35 migrants drowned in one of the worst incidents in months, the official said. It was not clear why the vessel capsized, but witnesses said strong winds were blowing at the time.

Very sad.

But a reminder of why it is better to incentivise refugees and asylum seekers to go through the UNHCR system and refugee camps, rather than kill themselves taking dangerous journeys by sea in the hope of reaching Europe.

The benefits of Iranian engagement

January 16th, 2016 at 2:00 pm by David Farrar

Stuff reports:

Iran released 10 US sailors on Wednesday (Thursday NZ Time) after holding them overnight, bringing a swift end to an incident that had rattled nerves days ahead of the expected implementation of a landmark nuclear accord between Tehran and world powers.

Iran’s Islamic Revolutionary Guard Corps (IRGC) said it had freed the sailors after determining they had entered Iranian territorial waters by mistake. The sailors had been detained aboard two US Navy patrol boats in the Gulf on Tuesday (Wednesday NZT).

“Our technical investigations showed the two US Navy boats entered Iranian territorial waters inadvertently,” the IRGC said in a statement carried by state television. “They were released in international waters after they apologised,” it added.

Some may disagree, but the fact this incident was settled quickly is arguably due to the agreement over the Iranian nuclear programme.

In times past Iran could well have decided to keep the sailors for weeks or months, and even threaten to put them on trial.

But now it has an agreement with the US, it has an incentive not to behave in such a way which would see the agreement fall to pieces. And they would have realised that another hostage situation would make them pariahs again.

So while the agreement is far from perfect, it does have beneficial side effects in providing an incentive for Iran to behave better than in the past.

The Kiwi jihadist

January 16th, 2016 at 12:00 pm by David Farrar

Stuff reports:

A year after giving away the coordinates of Islamic State fighters on social media, the “bumbling jihadist” Mark John Taylor has apparently resurfaced online and is encouraging others to join him in Syria.

According to a Linkedin profile purporting to come from the former New Zealand soldier, Taylor has been teaching English to children in Raqqa under Islamic State since October 2014.

Taylor claims to have been teaching English to children between the ages of 5 and 12, “teaching with a puppet and enjoyed having fun with the students” .

“Living in the heart of the Islamic State is a good experience and I encourage others to come and see for themselves.”

A good experience for some men, but less so for the women who of course are treated as slaves.

He added: “There’s no danger here and a great place to bring up the family. Except Western Jet fighters that always drop bombs on Civilians!”

No danger here? Mr Taylor should announce he is gay, and then see whether that holds true!

Should England have its own anthem?

January 15th, 2016 at 4:00 pm by David Farrar

Stuff reports:

Will England bid goodbye to “God Save the Queen”?

British lawmakers agreed on Wednesday (Thursday NZ Time) to consider replacing the royalist song that serves as England’s anthem at sporting events.

“God Save the Queen” is the national anthem of the United Kingdom – made up of England, Scotland, Wales and Northern Ireland – and is played at the Olympics and other events where the UK fields a single team.

At contests where the four areas compete separately, such as the football World Cup, England and Northern Ireland generally use “God Save the Queen,” but Scotland and Wales have their own official songs – “Flower of Scotland” and “Land of My Fathers.”

Labour Party lawmaker Toby Perkins said adopting an English anthem would “re-establish the idea that the United Kingdom is a union of four separate nations with their own identities.”

Perkins told the House of Commons that said “Jerusalem,” regarded by many as England’s unofficial anthem, was the most obvious choice. The song, whose words are by mystical 18th-century poet William Blake, vows to transform a country of “dark satanic mills” into a “green and pleasant land” like the ancient England that, legend says, was once visited by Jesus Christ.

I doubt this will happen, but U think it would be a good thing – and not just because Jerusalem is such a powerful anthem.

I think the future of the UK will be as a federation of four countries, similar to the US. Four national Parliaments and one federal Parliament. So an English anthem (and English Parliament) would be steps towards that.

Pro domestic abuse speakers okay so long as Islamist!

January 14th, 2016 at 12:00 pm by David Farrar

The Herald reports:

An Islamic cleric who defends domestic violence is among a string of extremist speakers touring British universities unchallenged, the Mail Investigations Unit can reveal.

Egyptian cleric Fadel Soliman spoke at five such events last year, using them to refer Muslim students to an online lecture series in which he speaks in favour of hitting women and outlines the Islamic case for sex slavery and polygamy.

Mr Soliman told students at Sheffield University that watching his lectures could be “a turning point” in their lives.

In his extraordinary videos, he advises physical punishment for wives who have displeased their husbands, saying “the hitting must be done with a small stick”.

The left will protest and try to stop speakers who not entirely politically correct such as Germaine Greer, because of her views n transgender people. But they’re quiet when someone speaks on campus condoning violence against women – because he is an Islamist!

Explaining why it is necessary, he says that when a husband is unhappy with the behaviour of his wife, that “after passing through two stages of non-physical interaction, the next stage must involve something physical, in order to escalate the intensity of the warning”.

And he gets to preach this. I’m for freedom of speech, but when you directly advocate violence, then that verges on the criminal.

Former Australian Greens leader says GM is fine

January 11th, 2016 at 7:00 am by David Farrar

This is a big story. ABC reports:

Federal Greens leader Richard Di Natale has partially broken with his party’s policy, saying that he does not believe genetically modified crops pose a significant risk to human health.

The Greens oppose the use of genetically modified crops, arguing they pose significant risks to agricultural ecosystems and human health.

But Senator Di Natale told the ABC that there is no concrete evidence on potential health harms to people.

“The literature so far, on the issue of human health, hasn’t produced evidence of widespread and significant health harms,” he said.

Will any Green MP here be brave enough to agree?

The Cologne attacks

January 10th, 2016 at 7:00 am by David Farrar

Marc Champion of Bloomberg writes:

Germany is reeling from the news, hidden for several days because of its political sensitivity, that as many as 90 women were sexually assaulted by a crowd of young men of Middle Eastern appearance outside Cologne’s majestic Cathedral on New Year’s Eve.

This is, as the local police chief put it, a “whole new dimension of crime” for Germans to confront.

No woman in North Africa, however, would be the least bit shocked.

There is a lot we still don’t know about the Cologne attacks, including whether they were organised ahead of time on social media and whether the actual culprits were refugees, petty criminals who have been plying the area around Cologne’s train station for years, or both. All the police have said is that the complaints were made, in one case of rape, and that the men were aged 18 to 35, many of them drunk and of “Arab or North African” origin.

The attacks are not a reason to not take in refugees. They are a reason to be selective of which refugees you take in, and vet them through the UNHCR system rather than just let them stream over the border.

No matter what the details, this will be political dynamite for Chancellor Angela Merkel. The new mayor of Cologne, who was stabbed in the neck during her election campaign over her support for Merkel’s pro-refugee policies, is already being hounded on social media for absurdly advising women to keep “an arm’s length” from strange men during the city’s carnival season next month.

Almost the ultimate in victim blaming.

Taiwan wants to join TPP

January 9th, 2016 at 4:00 pm by David Farrar

The Premier of Taiwan writes:

I extend sincere congratulations to New Zealand for its role in the complex 12-nation negotiations for the Trans-Pacific Partnership (TPP) agreement concluded in October.

I would also like to take this occasion to reiterate Taiwan’s interest in joining the trade bloc. …

The two countries already have strong foundations in merchandise and services trade.

New Zealand’s fruit and nut products are popular with Taiwanese consumers and its butter, dairy, meat and fruit command large market shares here.

Meanwhile, demand for services continues to grow here.

By supporting Taiwan’s inclusion in the TPP, New Zealand would not only create business opportunities for itself but also support the two countries’ common desire for peace and prosperity in the Asia-Pacific. 

So as more and more countries line up to join the TPP, the opposition in NZ still maintain we should not be part of it!

Brazil in a deep recession

January 7th, 2016 at 12:58 pm by David Farrar

The Herald reports:

Brazil’s economy will contract more than previously forecast and is heading for the deepest recession since at least 1901 as economic activity and confidence sink amid a political crisis, a survey of analysts shows.

Latin America’s largest economy will shrink 2.95 per cent this year, according to the weekly central bank poll of about 100 economists, versus a prior estimate of a 2.81 per cent contraction. …

Brazil’s policy makers are struggling to control the fastest inflation in 12 years without further hamstringing a weak economy. …

The last time Brazil had back-to-back years of recession was 1930 and 1931, and it has never had one as deep as that forecast for 2015 and 2016 combined, according to data from national economic research institute IPEA that dates back to 1901.

Brazil currently has unemployment of 7.5% and inflation of 15.4% and negative economic growth. How did it manage this?

The Economist reports:

In 2014, as Ms Rousseff sought re-election, the budget deficit doubled to 6.75% of GDP (the bill has since swelled by another 2.7 percentage points). For the first time since 1997 the government failed to set aside any money to pay back creditors. Its planned primary surplus for this year, which excludes interest owed on debt, of 1.2% of GDP is now expected to turn into a 0.9% deficit. Brazil’s gross government debt of 66% may look piffling compared to Greece’s 175% or Japan’s 227%. But Brazil’s high interest rates of around 14% make borrowing costlier to service. Debt payments eat up more than 8% of output.

It’s the old story of having spending get out of control in a bid to win re-election. They won, but the economy tanked under the burden of their promises.

Red tape, poor infrastructure and a strong currency have rendered much of industry uncompetitive. So consumers have been the main source of demand. A low unemployment rate pushed up wages. In the past ten years wages in the private sector have grown faster than GDP (public­-sector workers have done even better). That allowed consumers to borrow more, which encouraged still more spending. Now the virtuous circle is turning vicious. Real wages have been falling since March, compared with a year earlier, mainly because Brazilian workers’ productivity never justified the earlier rises.

You can’t sustainably rise wages by legislation or even agreement. To be sustainable it has to be on the back of productivity gains.