Kiwiblog

This week France just achieved the rare distinction of undergoing a triple dip recession.

A year ago France elected a socialist President. Since then the French economy has shrunk for three out of four quarters, with the overall economy 0.5% smaller than a year ago. That compares to around 3% annual growth in New Zealand.

This table is from Stats Chat.

So every country thinks Germans are the most trustworthy, except the Greece who think they are!

For least trustworthy, the British choose the French (fair enough), three countries choose Greece, Italy chooses itself (which is hilarious but perceptive) and Greece and Poland choose Germany. Maybe due to invasions but how do Poles say Germany is both most and least?

France and Germany are the only two countries chosen for most arrogant (also fair enough) while interestingly citizens of each country choose themselves as most compassionate – which suggest we see compassion locally.

As I’ve previously blogged, the Australian Government have been unable to get a path back to surplus, despite the mining boon and previously strong economic growth.

So yesterday’s Budget saw $43 billion of spending cuts and tax increases on the back of a $13 billion deficit for the upcoming year. This is what happens when you let spending get out of control.

Some of the major announcements:

• Scrapping family tax benefits and bonuses $4.9b
• A 15% surtax on super fund earnings over $100,000 a year

It will be interesting to compare and contrast the NZ and Australian budgets on Thursday.

Charlie Cooper in The Independent writes:

Whether or not one accepts a link between thePhilpott case and the argument for welfare reform, the tragedy has focused attention on one of the most difficult questions in modern politics: how the state should discourage people on benefits from having large numbers of children and expect the welfare system to pick up the bill.

And the options:

Docking benefits when children miss school:

One proposed policy, already in place in some US states, is for the parents of children who miss school to be docked benefits. In Michigan, parents whose children play truant for ten days see their social security cut.

In the UK, a senior government advisor suggested that the UK employ a similar strategy, extracting truancy fines from family’s state benefit.

Pros: encourages parents to be responsible for children’s education, without automatically removed their child benefit.

Cons: does not address issues of welfare dependency.

NZ has gone down this path.

Capping benefits:

A policy that is about to come into force in four London boroughs and will soon be rolled out nationwide, is that total benefits payments will be capped at £500 a week, or £26,000 per year for families of all sizes. The aim of the policy is to “make work pay” by bringing maximum benefit payments below the average full time salary.

However, the impact is expected to be predominately felt by large families, who make up the largest number of people currently receiving benefits above the cap. 73 per cent of households affected have three or more children.

The Institute for Fiscal Studies said in its Green Budget 2013 that the policy may have an impact on fertility rates “since the cap will effectively reduce the state financial support for some large families”.

Pros: tackles the problem of families having children for the sake of the benefit they bring while also encouraging people into work.

Cons: will cut the income of families by an average £93 per week – plunging many into poverty.

I wouldn’t do this for current families, but you could announce this as a policy so people in future know that if they choose to keep having more children on welfare, they won’t keep getting more money.

Cutting the number of children eligible for benefits:

An idea that would once have been considered extreme now has the backing of senior Conservatives and is being considered by Iain Duncan Smith, the Work and Pensions Secretary. David Davis, a former Tory leadership challenger, has said in the wake of the Philpott case, that there is “a strong argument to restrict child benefit whether it is to two, three or four children”, although he added that policy should not be made “on the back of one story”.

His words echo Mr Duncan Smith last year, when he suggested that he would consider capping benefit payments for new claimants after the birth of the first two children – a scheme that was dubbed the “two-child policy” and earned comparisons to China’s population control methods. Charities said any such move would have “a devastating impact on children”.

Pros: directly targets the problem of families having children for the sake of the benefit award they bring.

Cons: will unfairly penalise the children of families that exceed the cap.

The Clinton reforms cut off funding for any additional children if the parent/s were already on welfare.

Membrella reports:

Peter Fray, the former publisher and editor-in-chief of The Sydney Morning Herald, has today launched his newpolitical fact checking website PolitiFact Australia and says he is close to announcing a media partner for the site.

Politifact Australia is based on the format of its US counterpart, created by the Tampa Bay Times, and seeks to test political statements categorising them along a ‘truthometer’, with different ratings from true to half true to “pants on fire” for completely untrue statements.

I’d love to see a NZ version of a site such as this of Fact Check.

What is absolutely key is those involved in the site must be absolutely non-partisan and aligned.

The Australian site is here. So far they have given the following ratings:

• Tony Abbott – a mostly true and a mostly false
• Julia Gillard – a mostly false
• Lee Rhiannon (Greens) – a mostly true
• ALP – an outright false

Iain Martin writes in the Daily Telegraph:

Another day, another deranged report on the future of Heathrow. This time it is the Transport Select Committee suggesting that London’s main airport be extended to four (four!) runways, doubling the airport’s size and blighting the lives of millions of people who live in West London. Forget the various horse racing scandals. We must ask: were the members of the select committee doped? Or is it just that they wrote their report without looking at a map?

It is – once again from the current political class – the sheer lack of ambition and vision that it is so depressing. Extending Heathrow rather than looking for a proper long-term solution is simply corporatist defeatism. As though all the airline industry has to do is launch another of its interminable public affairs campaigns and the country will roll over.

Heathrow suits the airlines, because they are already there and they think extending it would be cheap and easy for them. A larger Heathrow suits some politicians because it seems like a good idea, until you think about it and look at a map. Incidentally, aviation is merely another industry that should be at our beck and call rather than the other way round.

So what did Boris say?

What a relief it was then to hear the Mayor of London on the radio today being uplifting and knocking the report into touch. Boris is spot on. London needs to look eastwards rather than compounding a planning mistake made at Heathrow in the 1940s. ….

Imagine as the crown jewels of London’s expansion, a new four or five runway airport built further out east, the best airport in the world in the world’s greatest city, on land reclaimed from the sea. That is not an outlandish idea. Just ask the Dutch, or look at Hong Kong’s airport. The new transport links feeding the airport could also involve new commuter lines to the major employment hubs of the centre.

But, responds the ruling elite, it’s too expensive, we’re a rubbish country now, we can’t do this sort of stuff in Britain. Let’s just give in to the airlines and hope for quieter planes which seem forever to be just around the corner but never arrive.

Boris says “piffle” to all that. He blows a raspberry in the face of the defeatists. Would building the world’s greatest airport, serving a city where people want to live not be the most marvellous money-spinner and investment opportunity? Get the world’s sovereign wealth funds and hungry investors to pile in. Issue London bonds. Fire up the architects. For the good of Britain expand London. Build, build, build and increase the opportunities available to London’s poorer citizens. Get moving!

Boris says this stuff in such an uplifting way that I am convinced increasingly that he could be Britain’s Ronald Reagan. I mean that as a compliment. Like the great American president, he exudes optimism about his country’s capacity for renewal and recovery.

And the future:

Boris need not be made prime minister this minute. But eventually, when the rhetoric of austerity is exhausted, and the current leaders have fought themselves to a standstill, there will be an opportunity for someone to emerge with a bit of anti-politics oomph and pizazz. Someone who says that actually the 2020s and beyond could be great for Britain if we don’t overload the economy with high taxes and use a bit of imagination. We have so much going for us in terms of language, culture, ideas, science, industry, sport, innovation and pubs. We need an injection of the feel-good spirit and some dynamism.

There will eventually be an appetite for optimism, and Boris seems keen to supply it. There is another aspect of his potential appeal. Who can cut a deal with UKIP’s Nigel Farage in 2017 or thereabouts, in the Rose Garden of Number 10? Boris can.

Boris’ term as Mayor ends in 2016. It will be very interesting to see what seats come up around that time.

The Daily Mail reports:

Pensioners’ taxes should increase, their benefits be cut, and a tax on property wealth should be introduced in order to share the pain of austerity with today’s hard-up workers, a think-tank said today. 

The income gap between pensioners and workers has shrunk massively in the last few decades, so taxes should be raised on those in retirement, the Fabian Society said.

Middle-income working households enjoyed an income 93 per cent above that of middle-income retired households when Margaret Thatcher came to power in 1979, but that figure is now 37 per cent.

I don’t think we should raise taxes on the elderly, but I do think NZ Superannuation should be means tested and linked to the rate of inflation rather than the average wage. Otherwise the gap between it another benefits will continue to grow significantly.

‘Old age is no longer a proxy for poverty’, the Fabian Society said. ‘In public policy and deficit reduction measures, ministers should adopt a presumption of equality across age groups.

‘In financial terms alone, older people are no longer distinct, and blanket policies favouring them should be reviewed.’

I agree.

Tim G looks at some election chokes – where the party or candidate that should have won, choked and didn’t. His top 5 are:

1. Victoria Premier Jeff Kennett in 1999
2. Thomas Dewey in the 1948 US Presidential election
3. Shimon Peres repeatedly
4. Australian Liberal Leader John Hewson in 1983
5. Al Gore in 2000

If Tony Abbott doesn’t win this September, he will make the list.

The Herald reports:

Tiszavasvari is the stronghold of the Jobbik Party which is causing Hungarian Jews to fear for the future. …

Yet gypsies are not the only bogeymen Jobbik has in its sights, as a sign on the green opposite the mayoralty building suggests. In Hungarian and Persian it proudly announces that Tiszavasvari is twinned with Ardabil, a town in Iran.

There is no obvious reason why a drab rust-belt town in Hungary’s former mining area should seek links to a city in a hardline Islamic Republic 3220km away. The real purpose is to show their mutual loathing of Israel. …

“You can see Jobbik’s true nature through this,” said Peter Feldmajer, the president of the Federation of Hungarian Jewish Communities, which represents an estimated 100,000 Hungarian Jews, nearly 90 per cent of whom still refuse to disclose their religion publicly. “They hate the Jewish people, and so does the Iranian Government.”

How sad that 90% of Jews have to hide their religion.

But as the global banking crisis hit Hungary hard, leaving more than one in 10 jobless, Jobbik revived a folk devil – the wealthy, all-controlling Jews, who were traditionally influential in the finance world.

Jewish community leaders have been attacked in the street and cemeteries desecrated. As well as anti-Semitism rallies, far-right biker gangs have held ugly demonstrations known as “Step on the Gas” days. Gyongyosi was castigated recently for saying that a “security” register should be created of Hungarian MPs and civil servants who were of “Jewish origin”.

I find an MP calling for a Jewish register chilling. We have seen this happen before. This is one of the reasons why I support Israel as a safe country for Jews – the history of persecution in Europe was not just about the Holocaust.

Jobbik are vigorously anti-globalisation being populist and nationalist. They rail against “Israeli businessmen of buying up property in the country wholescale.”

The Jobbik candidate for President of Hungary has made the following statements:

• I would be glad if those who call themselves proud Hungarian Jews would go and play with their own little circumcised pricks instead of slurring me
  
• “advised” the “liberal-bolshevik zionists” to “start thinking of where to flee and where to hide” in a 2008 speech
• The only way to talk to people like you is by assuming the style of Hamas. I wish all of you lice-infested, dirty murderers will receive Hamas’ ‘kisses

Jobbik are somewhere between neo-Nazis and actual Nazis. They are now the third most popular party in Hungary.

In 1938 the Hungarian Government banned Jews from government employment and from editing newspapers.No private employer could have more than 12% Jewish employees. Most Jews lost the right to vote. In 1941 Jews were banned from marrying non-Jews. Note Germany did not invade Hungary until 1944.

Winston Churchill in 1944 said:

 ”There is no doubt that this persecution of Jews in Hungary and their expulsion from enemy territory is probably the greatest and most horrible crime ever committed in the whole history of the world….”

Never Again.

Luke Malpass writes in the Australian Financial Review:

How exactly is it that New Zealand – a country that went into recession in early 2008, had a collapsed non-bank finance sector, didn’t have a mining boom, has a historically high dollar and had its second biggest city basically levelled by an earthquake – is on track to record a budget surplus as scheduled and on time in 2014-15? This question raises a second one: why is Australia not in this position?

I think we don’t give enough credit to the Government for the very challenging task they have had, where they had to both have an expansionary fiscal policy during the depths of the global recession, but also impose spending restraint so that the projected structural deficit would have a path towards becoming a surplus.

Australia has shown how easy it is to blow a projected surplus.

The odd thing about this is that Swan and his government perpetually cast themselves as victims: of a global downturn and an unappreciative public.

But in fact, a look across the Tasman shows Swan and Labor are victims only of their own appalling policy choices. Overall Kiwi growth is at about 3 per cent – NZ grew 1.5 per cent last quarter alone. Unemployment and welfare numbers are dropping, virtually every export sector, including manufacturing has been growing. Businesses everywhere are complaining they can’t get skilled labour.

The growth in Australia is hugely variable. Western Australia has been growing faster than China. Queensland has had strong growth. But the larger states of Victoria and New South Wales were actually contracting for a while.

The Gillard government is now in the ridiculous situation that despite revenue increases since 2010, historically high terms of trade, and relatively low unemployment, any surplus has been shunted away into the future. Comparatively, New Zealand, despite relatively poor growth until recently, no mining boom and an enormous earthquake, will complete a bigger surplus than expected, earlier than forecast.

Go New Zealand!

A little known fact is that Denis Thatcher’s father was born in New Zealand. That made Denis a Kiwi, and hence Margaret Thatcher a Kiwi by marriage.

Thomas Thatcher was born in 1848 and emigrated to New Zealand in 1878. He founded Atlas Preservatives, originally a sheep dip and weed killer manufacturer.  His son Thomas Herbert Thatcher was born in New Zealand in 1885 and married Lilian Kathleen Bird, a secretary at Atlas. Their son was Denis Thatcher.

Thatcher Street in Castlecliff is named after Thomas Thatcher and Thomas Herbert attended Wanganu Collegiate from 1894 to 1897, when they moved back to England.

The BBC reports:

The court has previously heard that Ms Fleming, who is not attending the three-day hearing, is confined to a wheelchair, physically helpless, lives in constant pain, cannot swallow and suffers choking sessions which wear her out.

She wants to be allowed die peacefully with dignity at home, when she chooses, in the arms of her long-term partner, Tom Curran, without him facing the threat of jail.

Brian Murray, senior counsel, told seven judges hearing the appeal in Dublin on Wednesday that his client was being denied what she seeks for fear that without an absolute ban on assisted suicide there could be more relaxed practices by doctors.

“It is our position that it is possible to design legislation that facilitates the plaintiff in a way that does not present any risk to the involuntary death of others,” he said.

Mr Murray said it may be legitimate government policy to discourage people from choosing death over life, but he argued it was not a proper basis for telling people what decision they can make about their lives.

What strikes me in cases like this, is provision for assisted suicide may allow those in this situation to live longer. If you know your partner or a doctor can assist you to end your life when your quality of life has become intolerable, you can put that day off until as long as possible.

But if you know that once you reach the point of being physically unable to do it yourself, then there is no legal way for you to end your suffering, you may commit suicide years before you otherwise would have to.

That is not just a theory. It has happened here in New Zealand. I’ve blogged on such a case before.

Just as I think the rights of someone when living should be paramount when it comes to issues such as organ donation and burial location, I think you should also have the right to decide to die, and gain assistance if necessary.

Of course there must be stringent safeguards. But the debate should be on what those safeguards should be, not on whether people should be made to suffer.

In December, Ms Fleming told a three judge division of the High Court court the ban on assisted suicide was forcing her to live against her will in a life of pain and indignity.

The former lecturer is almost completely physically incapable and would need help to take her own life.

The irony is that if she was not in such an agonising condition, should would be able to kill herself without assistance.

The Press editorial:

The United States and the international community have to respond to a suspected nerve gas attack by Syrian government forces on civilians in Aleppo.

If the attack is confirmed – and it seems likely that it has happened – President Bashar al-Assad’s regime cannot be allowed to get away with this atrocity.

The trouble is there are no good solutions, just a variety of different intensity bad ones.

The difficulty for the West is that any imaginable military response is dangerously complicated. Even a no-fly zone over Syria, which would work to the obviously military advantage of the rebels battling Assad’s forces, cannot be easily enforced.

Assad is believed to have 600 fixed surface-to-air missile sites and about 300 mobile units, some of which would survive any first strike by US cruise missiles or planes flying from the Royal Air Force base in Cyprus. Putting Assad’s anti-aircraft capability out of action could be difficult and costly.

Most can be destroyed easily enough, but enough would survive to take down some aircraft. However if drones are used, the loss of life to US or NATO forces could be minimised.

If the chemical attack is confirmed, Assad has to go. Any regime which carries out nerve gas attacks on its own civilian population has lost all pretence of legitimacy.

The trouble is the alternatives are not overly appealing.

The Dom Post urges caution:

Barack Obama warned Syria that if it used nerve gas against its people it would “cross a red line”. The president meant that if the Assad regime was guilty of such a war crime, the United States would have to do something.

And now the evidence is mounting that Assad might have used sarin. And so now the president is in a difficult position, largely of his own making.

It would be easy to scorn Mr Obama over this. It would be easy to interpret his hyper-caution as shillyshallying and even cowardice. It would be easy to demand he stick to his word and start bombing. Predictably, some senior American politicians are now urging him to do so.

I don’t think he should bomb, but I think he was stupid to talk about a red line, and not be prepared for what to do if it is crossed.

This is MEP Licia Ronzulli, with her daughter Victoria. I love it that they allow her to be on the floor of the European Parliament, so long as she isn’t disruptive. A great way to allow female MPs be to bother mothers and legislators.

She has had her daughter attending Parliament with her since she was six weeks old.

I wonder what would happen if a MP in New Zealand wanted to do the same?

Hat Tip: Daily Mirror

The Herald reports:

The two brothers suspected of bombing the Boston Marathon appear to have been motivated by a radical brand of Islam but do not seem connected to any Muslim terrorist groups, US officials said after interrogating and charging Dzhokhar Tsarnaev with crimes that could bring the death penalty.

Tsarnaev, 19, was charged in his hospital room, where he was in serious condition with a gunshot wound to the throat and other injuries suffered during his attempted getaway. His older brother, Tamerlan, 26, died after a fierce gunbattle with police.

The Massachusetts college student was charged with using and conspiring to use a weapon of mass destruction. He was accused of joining with his brother in setting off the shrapnel-packed pressure-cooker bombs that killed three people and wounded more than 200 a week ago.

The brothers, ethnic Chechens from Russia who had been living in the US for about a decade, practiced Islam.

Two US officials said preliminary evidence from the younger man’s interrogation suggests the brothers were motivated by religious extremism but were apparently not involved with Islamic terrorist organisations.

In one sense it is more concerning they were not dupes put up to it by a terrorist group, but decided to turn to terrorism based solely on their religious beliefs.

There are approximately 1.6 billion Muslims, and it goes without saying that the vast majority do not practice or support terrorism. Just mindlessly ranting against an entire religion achieves nothing.

And of course there have been terrorists motivated by other religions – Northern Ireland, for one.

But to my mind there is a difference with terrorism done by extreme Islamists. It is that religion seems to be the sole reason for the terrorism.

Most terrorism involves territorial disputes. Northern Ireland was part-religious but partly an fight over the partition or Ireland.

Terrorism in Kashmir is linked to control of disputed territory. Religion is part of it, but not all of it.

Other factors involved in why people turn to terrorism can be extreme poverty, lack of education etc.

But when it comes to terrorism involving relatively well off, well educated citizens, with no territorial dispute – the sole factor often is just their belief in an extreme version of Islam. And to be frank that is scary.

Tony Blair and the IRA managed to find a political settlement that has almost stopped terrorism in Northern Ireland. The same has happened in other areas.

But I’m at a loss to know how you stop people like the Tsarnaev brothers concluding that their God wants them to blow up children who are watching the Boston Marathon. When a religion doesn’t unambiguously condemn violence and killing, and many priests promote rewards in the afterlife for those who kill in God’s name – no wonder. When Iran’s mullahs hand out fatwas encourging people to kill the likes of Salman Rushdie, it is no surprise that you have others decide that killing people for their God is a good idea.

Christianity has it faults, and a chequered history. But the number of Christian priests who in modern times ever call for someone to be killed is almost zero – the odd lunatic excepted. But sadly in Islam, all too many religious and political leaders (and the two are linked) do preach violence in God’s name.

The solutions are not easy. Just condemning 1.6 billion Muslims for the sins of a few is not a solution – just prejudice. But neither is there merit in ignoring the problems and almost unique challenges of Islamic terrorism. The lack of a central authority in Islam, and the inability to modernise their teachings, makes change very challenging.

In the end the only practical long-term solution is to encourage moderate Muslim leaders, to speak out and condemn the extremists, and make clear that terrorism is evil and sinful – no matter what.

But I have to admit I am pessimistic. I don’t see an end to religious terrorism in my lifetime.

Reuters reports:

Canadian security forces have thwarted an al Qaeda plot to blow up a rail line between Canada and the United States, police and intelligence agencies say.

US security and law enforcement sources said the suspects had sought to attack the railroad between Toronto and New York City. Two men had been arrested after raids in Toronto and Montreal.

With this plot and the recent terrorism in Boston, it seems a very bad time to be arguing that there should be no capability to do intercept domestic communications in New Zealand. One professor was recently in print saying that this would make us a totalitarian state in a hysterical rant.

Of course any domestic spying must be strictly controlled and have rigorous oversight.  But those who argue New Zealand never has and never will have domestic threats are dangerously naive.

The SMH reports:

Against all expectations, US emissions of carbon dioxide into the atmosphere, since peaking in 2007, have fallen by 12 per cent as of 2012, back to 1995 levels. The primary reason, in a word, is “fracking”. Or, in 11 words: horizontal drilling and hydraulic fracturing to recover deposits of shale gas.

Yet the Greens wanted it banned here. This is the difference between being pro-environment (which many people are) and anti-science (which the Greens often are).

One can virtually prove that shale gas has been the major influence driving the fall in US emissions. Just ten years ago, the natural-gas industry was so sure that domestic production was reaching its limit that it made large investments in terminals to import liquefied natural gas (LNG). Yet fracking has increased supply so rapidly that these facilities are now being converted to export LNG.

Natural gas emits only half as much CO2 as coal, and occupies a rapidly increasing share of electricity generation – up 37 per cent since 2007, while coal’s share has plummeted by 25 per cent. Indeed, natural gas has drawn close to coal as the number one source of US power.

Half the emissions of coal? If the Greens honestly thought climate change was the planet’s biggest threat, they’d be promoting fracking.

Hat Tip: Whale Oil. Original here.

Magnus Wilberg writes in the Financial Times:

Europe is making a mistake. In February, the European Commission published a proposal for a financial transaction tax – also called a Tobin or “Robin Hood” tax – in the EU. Eleven states have been granted the right to impose a minimum 0.1 per cent tax on equity and debt transactions and a minimum 0.01 per cent charge on derivatives transactions. If the experience of Sweden’s use of such a tax is anything to go by, this move is extremely unwise.

Why do some people advocate for a FTT?

One aim of the proposed tax is to improve the efficiency of financial markets by reducing speculation. Another is to generate tax revenues. Those were also the reasons why Sweden introduced a transaction tax in 1984.

If an FTT actually worked, and it was used to lower income tax rates, then it could be worth considering as part of a policy of broad base and low rates. But do they work?

Initially, the tax rate was 0.5 per cent in connection with the purchase and sale of shares. In mid-1986, the rate was doubled and the tax base was broadened to cover share options and convertibles. The trading volume on the Stockholm stock exchange changed dramatically when the tax was increased. Average turnover fell 30 per cent during the second half of 1986 and throughout 1987. The turnover in the 11 most traded shares fell 60 per cent. It seems unlikely that this sharp decrease reflected a decline only in speculative trading.

Later, in 1989, the tax base was broadened to include bonds. This, in turn, led to an 85 per cent reduction in bond-trading volume and a 98 per cent reduction of trading volume in bond derivatives. The increase in tax revenues resulting from the broadening was less than 5 per cent of what had been expected.

By 1990, shortly after the last vestiges of the currency controls were abolished in Sweden, more than 50 per cent of the trading in Swedish shares had moved to London. Conversely, once the tax was abolished in December 1991, trading on the Stockholm stock exchange recovered.

We live in an increasingly mobile and borderless world. Companies can decide where to locate, where to pay tax, and where to do financial transactions. The best way to have a good tax base is to have low rates.

This conclusion is reinforced by studies on the effects of the Swedish tax, which suggest that it reduced market liquidity but not volatility. Since increases in speculative trading tend to be associated with more volatility, this also suggests that the tax had little substantial effect on speculative trading.

So it didn’t even achieve its main aim.

Audrey Young reports:

Trade Minister Tim Groser says his bid to become the next director-general of the World Trade Organisation is no longer “a long shot”.

From the original nine candidates, Mr Groser has made it through the next round of five candidates.

Over the next few weeks, they will be reduced to a shortlist of two.

“What we thought was a very long shot I don’t think you could describe as a very long shot any longer,” he told the Herald.

Mr Groser is a former trade ambassador to the World Trade Organisation (WTO), based in Geneva.

He is competing with candidates from Indonesia (Mari Pangestu), South Korea (Taeho Bark), Mexico (Herminio Blanco) and Brazil (Roberto Azevedo).

He said he needed strong support from developed and developing countries to survive this far.

“Given that three out of four members in the WTO, 120 out of 159, are a developing country, I needed to get strong support from developing countries to survive politically.

I would not be surprised if Tim makes the final two. However my expectations are that while Groser is the strongest candidate (by far) on a personal level, being from a developed country will count against him with most of the voting countries. Hence when it gets down to the final two, the other candidate will win through.

I hope I am wrong, as we need a strong WTO to liberalise world trade and Groser would do an excellent job.

The Guardian profiles the five remaining candidates. I think Roberto Azevedo from Brazil could be the one to beat.

The Herald reports:

Former Prime Minister Helen Clark has been appointed for a another term in her role at the United Nations.

Miss Clark was first appointed as the UN Development Programme Administrator in 2009.

She said it had been an “honour and a privilege” to serve in the role for the past four years.

“I thank the Member States of the United Nations General Assembly and the Secretary-General for their confidence in me to lead the organisation for another term,” she said.

Four years goes quickly.

The position has a tax free US$450,730 salary and US$240,000 housing subsidy which is a total package of US$690,000 tax free. That is NZ$803,500 net which is equal to NZ$1.19 million gross. A lot better than being PM! I suspect she’s still like her old job back though.

Her new term will expire in April 2017.

A reader writes in:

I was a journalist in London in 1973 when the IRA bombing started.

We had continual strikes, three working weeks, power strikes and just about everything you could think.   I well recall an article by the central union leader, Vic Feather I think, which blamed the UKs poor position on the fact it did not get Marshall Plan aid like some in Europe did.   The unions were in a state of denial and biz leaders and conservative MPs lacked the wit and guts to sort things out.

It is true Thatchers reforms were very harsh on some areas and people and more could have been done to help them thru the transition, but without Margaret the UK would have slid away, just as NZ would have moved closer to South America without Roger Douglas.

Can you believe it? The UK was so badly off, they were blaming the lack of aid under the Marshall Plan!

Professor Alexander Gillespie writes in the NZ Herald:

North Korea’s young leader must be allowed to claim small victory in order to avert a crisis nobody wants. …

The way that this has happened in recent years is that the North has lashed out, militarily, at the South. They have shelled disputed areas, and sunk South Korean vessels. In such instances the South has exercised “heroic restraint” and not risen to such extreme provocation. This has allowed the bully to maintain his facade, and peace to remain. It is unlikely that South Korea is willing to pay this price any longer. It is no longer politically acceptable to turn the other cheek. This means that if Kim Jong Un tries to lash out, to save face, he will get a blood nose in reply. If this young man gets a blood nose, the population he rules will become emboldened.

To avert this risk, he must strike harder at the external enemy. If that happens, complete escalation of every weapon in the arsenal could take minutes. This is especially so if the South hits, intentionally or unintentionally, any of the North’s strategic assets.

What this suggests is that some other method has to be found to get the North Korean leader out of the trap he is creating for us all. The key here is finding something symbolic, that gives the appearance that he has won a small victory.

On the military level, it may be that we accept a further missile or nuclear test, which is signalled in advance so there is absolutely no misunderstanding. It may be that we tone down the military exercises in the South, or that the armed forces in the South publicly reposition a military asset, away from the potential conflict. If this blink is done, then the North can reciprocate.

Promises of talks on peace treaties, food, fuel and disarmament can be part of the following package. But first, a symbolic step, away from the precipice is required. In any other situation, the bully should be confronted, toe-to-toe. But this is not that instance.

I can’t think of an argument that is more wrong. All the history of the world is appeasement fails. If you allow North Korea to attack South Korea with no retribution, then all that will do is encourage them next time to go even further.

The argument by Gillespie, while well intentioned, is as fatally flawed as Chamberlain’s appeasement of Hitler.

Hat Tip: No Minister

Audrey Young writes:

Why does the world biggest country pay so much attention to such a small country as New Zealand?

Before the changing of the guard in the Beijing leadership last month, of the nine former members of the powerful group Standing committee of the Politburo, seven had visited New Zealand.

The only other country to receive such a concentration high-level visits is said to be Singapore.

The new Standing Committee has been reduced to seven and only two have been to New Zealand, but the most important two, the President Xi Jinping (three times) and the Premier Li Leqiang in 2009 both in former capacities.

New Zealand has had annual talks with Beijing for some time. Australia has just got them this week.

Prime Minister John Key is being accorded time with both the Premier and President this trip.

So why does one of the smallest countries in the world have such a good relationship with the largest country in the world?

New Zealand is also small enough for China to test out ideas without complications, such as the joint aid project to provide Rarotonga with clean water. …

China is usually secretive and defensive about its aid budget. The Cook Islands joint aid venture is a first for them.

I wasn’t aware of that. The Pacific was in danger of becoming an arena for competing aid diplomacy. A co-operative approach is in fact much better for the Pacific.

One of the least recognised reasons China is so well disposed to New Zealand is the late Rewi Alley, the New Zealander who lived in China for 60 years helping to establish co-operatives -though these day the most famous Kiwi is probably Sir Peter Jackson.

No Hobbit or Jackson haters in China.

Peters Saunders from CIS looks at the Thatcher legacy:

In 1970s Britain, the state was involved in everything, yet nothing seemed to work. It owned great swathes of industry – supplying water, gas and electricity, digging coal and making steel, running the railways and a major airline, building motor vehicles and aero-engines, monopolising post and telecommunications – and was landlord to more than a quarter of the nation’s households. But nobody wanted to buy the cars it built, British Rail was a laughing stock, the coal and steel industries were on their knees, and it took months to get a telephone connected.

Governments in the 1970s operated in fear of the union bosses who were treated to ‘beer and sandwiches’ in Downing Street as they told successive prime ministers what the unions would and would not tolerate. Political scientists began writing books about the emergence of a ‘corporatist state.’

A few years before Thatcher won office, Britain’s homes had been plunged into darkness by a miners’ strike that put industry on a three-day working week. At the shops there was a run on candles. Then in the winter of 1978–79, public sector militants stopped rubbish being collected from the streets, disrupted meal deliveries to the housebound elderly, and left corpses unburied at graveyards.

Time and again, union militancy was bought off with unaffordable pay deals that pushed annual inflation past 25% and sent the Callaghan-Labour government scurrying, cap in hand, to the IMF for emergency loans. Britain became known as ‘the sick man of Europe.’ Political scientists began writing books about the country being ‘ungovernable.’

In their increasingly fruitless attempts to control the mounting chaos, successive Conservative and Labour governments increased controls over many aspects of everyday life. You were not allowed to take more than a couple of hundred pounds with you if you went abroad for a holiday. Your wages were pegged by law. A government hotline was set up for informers to report shopkeepers whose prices exceeded those laid down by the state.

Britain was locked into a downward spiral, and nobody seemed to think it could be reversed. Except Maggie.

She scrapped the price and wage controls, arguing that governments cannot possibly know how investment is best directed or who should be allowed to trade at what price. She sold off the nationalised industries, opening them up to the cleansing blast of competition and setting an example that the rest of the world quickly followed. She allowed working-class families to buy their council houses at a discount (a policy that infuriated middle-class socialists but which at last prompted me to re-evaluate my socialist beliefs).

A great summary of how bad things were.

But taking her record as a whole, the balance is clearly and overwhelmingly positive. The proof is that no succeeding government has tried to reverse her key reforms. For all the left-wing bluster, nobody has ever seriously suggested that industries be renationalised, union bosses be re-empowered, or that governments should again try to fix prices, wages and dividends, or direct private investment. Margaret Thatcher found a country on its knees in 1979, and in just 11 years, she reversed decades of miserable decline.

Put the Great back into Great Britain.