Archive for the ‘United States’ Category

Trading Private Bergdahl

June 6th, 2014 at 4:00 pm by David Farrar


Mad Magazine are the latest to pile into Obama on his trade of an American POW for five Taliban held at Gitmo. Bergdahl appears to be a deserter, and while this doesn’t mean you don’t try and recover him, it does suggest the five to one trade was far too high. Even Democrats are now attacking Obama on this.

James Taranto at the WSJ writes:

“If I’ve lost Neuman, I’ve lost Middle America.” That’s how we imagine President Obama reacting to being scathed by MAD magazine. The Usual Gang of Idiots tweeted a parody poster yesterday for “Barack Obama’s Unfortunate New Movie,” titled “Trading Private Bergdahl.” The tag line: “They got five Taliban leaders. We got one deserting weasel. The mission is a disaster.” Obama is depicted as the lead actor, with the Taliban quintet in supporting roles. The picture is rated “NC” for “No Congressional Approval.”

How in the world did an administration known for political competence, if for no other kind, manage to pull off such a public-relations disaster? The answer is that the left has a very large blind spot when it comes to military culture.

There’s been speculation that the White House intended the Bergdahl release as a distraction from the Veterans Administration scandal. Certainly it has served as such a diversion, not to mention a reminder to be careful what you wish for.

Adding to Obama’s woes is that there is a law saying the President must notify Congress 30 days before the release of any prisoner from Gitmo. Obama ignored the law, as he indicated he might do when signing the law.  This is not uncommon – but the heads of the relevant congressional committees were not even given a heads up in advance – and they are very peeved.

Obama is in his final term. This will however reduce his ability to get much done in the last two and a half years of his term. It also gives the Republicans another weapon for the mid-terms.


What do moderates want?

May 20th, 2014 at 10:00 am by David Farrar

Molly Ball writes at The Atlantic:

It often seems there’s no center in American politics anymore. Increasingly polarized camps on the right and left hold diametrically opposed, irreconcilable views on seemingly every issue.

And yet more than a third of American voters call themselves neither liberal or conservative but moderate, indicating a substantial chunk of dissenters from the left-right paradigm. Are they just confused? Are they closet ideologues with strongly partisan opinions but a distaste for labels? Are they politically disconnected? What, in short, is their deal?

The folks at Third Way, a Democratic think tank that urges moderate positions, decided to find out. They commissioned a poll of 1,500 American registered voters, asking detailed questions about a variety of issues to find out whether those who called themselves moderate were a distinct group and what sets them apart. The Democratic pollster Peter Brodnitz of the Benenson Strategy Group conducted the inaugural “State of the Center” poll last month; it carries an overall margin of error of 2.5 percentage points in either direction.

What the poll found is fascinating. Moderates, according to the poll, aren’t tuned-out or ill-informed, but they tend to see both sides of complex issues—for example, they want the government to do more to help the economy, but they worry that it may be ineffective or counterproductive. 

Is a very sensible position – want to do more, but sceptical it will be effective.

Moderates’ perspective on the role of government has elements in common with both liberals and conservatives. Only 23 percent of moderates favor a larger government that provides more services (compared to 54 percent of liberals and 13 percent of conservatives); 37 percent favor a smaller government with fewer services (compared to 12 percent of liberals and 62 percent of conservatives).

So moderates are sceptical of government, but not hostile to it. While many on the left have a belief that there is nothing Government can’t do.

Liberals overwhelmingly (75 percent) worry government isn’t involved enough in the economy, while conservatives mostly (60 percent) worry government is too involved in the economy; moderates lean toward the liberal side of the argument, with 53 percent saying not enough involvement to 40 percent who cite too much. Still, more moderates fear big government (52 percent) than big business (41 percent). Two-thirds of moderates think government often gets in the way of economic growth, and a majority (54 percent) think that if government is involved in something, it often goes wrong.

Moderates are, well, moderate.

Majorities of moderates believe government should play a role in creating equal opportunity and that a strong safety net is important even if “a few lazy people game the system,” but moderates also largely believe the government has created incentives for poor people not to work. Most interestingly, even as they see society as unequal, seven in 10 moderates disagree with the idea that “the deck is stacked against people like me.” In fact, it was conservatives who were most likely to see themselves as victims: 35 percent said the deck was stacked against them, versus 28 percent of liberals and moderates.



Mr Key goes to Washington

May 20th, 2014 at 8:22 am by David Farrar

The PM has announced:

Prime Minister John Key has welcomed an invitation to meet the President of the United States during his upcoming visit to the US.

The White House has announced President Obama will meet the Prime Minister in Washington DC on Friday, 20 June.

“The invitation underlines the very close relationship between the United States and New Zealand,” Mr Key says.

“I look forward to meeting with President Obama.  We are likely to discuss the Trans Pacific Partnership negotiations, to take stock of our bilateral relationship, and to exchange views on current regional and international issues,” he says.

The Prime Minister is travelling to the United States from June 16 to 20.

While in Washington DC, the Prime Minister will also meet with a range of senior administration figures, Congressional representatives and business leaders. 

The Prime Minister will also undertake a full programme in New York in support of New Zealand’s bid to win a non-permanent seat on the UN Security Council for 2015-16.

This is no surprise, yet still welcome.

A diplomat commented to me a couple of months ago how extraordinary it is that the New Zealand Prime Minister is the national leader that has probably spent the most time in the last 12 months with both the President of the United States, but also the President of China.

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Government Has Made America Inept

May 14th, 2014 at 10:00 am by David Farrar

Philip K. Howard writes:

In February 2011, during a winter storm, a tree fell into a creek in Franklin Township, New Jersey, and caused flooding. The town was about to send a tractor in to pull the tree out when someone, probably the town lawyer, helpfully pointed out that it was a “class C-1 creek” and required formal approvals before any natural condition was altered. The flooding continued while town officials spent 12 days and $12,000 to get a permit to do what was obvious: pull the tree out of the creek.

Government’s ineptitude is not news. But something else has happened in the last few decades. Government is making America inept. Other countries don’t have difficulty pulling a tree out of a creek. Other countries also have modern infrastructure, and schools that generally succeed, and better health care at little more than half the cost.

Reforms, often embodied in hundreds of pages of new regulations, are tried constantly. But they only seem to make the problems worse. Political debate is so predictable that it’s barely worth listening to, offering ideology without practicality—as if our only choice, as comedian Jon Stewart put it, is that “government must go away completely—or we must be run by an incompetent bureaucracy.”

The missing element in American government could hardly be more basic: No official has authority to make a decision. Law has crowded out the ability to be practical or fair. Mindless rigidity has descended upon the land, from the schoolhouse to the White House to, sometimes, your house. Nothing much works, because no one is free to make things work.

Automatic law causes public failure. A system of detailed dictates is supposed to make government work better. Instead it causes failure.

The simplest tasks often turn into bureaucratic ordeals. A teacher in Chicago who called the custodian to report a broken water fountain was chewed out because he didn’t follow “broken water fountain reporting procedures.” On the first day of school he was required to read to his students a list of disciplinary rules, including this one, just to start things off on the right foot: “You may be expelled for homicide.”

It would be hilarious, if it wasn’t so sad.

Budgets are out of control because government executives lack flexibility to shave here and there to make ends meet. Soon after his election, New York Governor Andrew Cuomo thought he had found an easy way to save $50 million when he learned that a large juvenile detention center was empty, with no prospects of use anytime soon. There it was, sitting upstate, with several dozen employees—doing nothing but costing taxpayers millions of dollars. But no one had the authority to close it down, not even the governor. There’s a New York law that prohibits closing down any facility with union employees without at least one year’s notice. 

I look forward to Labour adopting this as policy!

Even matters of life and death are sometimes asked to yield to the rigid imperatives of a clear rule. In 2012, Florida lifeguard Tomas Lopez was fired for leaving his designated zone on the beach to rescue a drowning man just over the line. “On radio I heard Tommy saying ‘I’m going for a rescue but it’s out of our zone,’” said another lifeguard, who added that the “manager told him not to go and to call 911.” Lopez said he couldn’t just sit back, and was prepared to get fired, adding, “It wasn’t too much of an upset, because I had my morals intact.” After publicity about the incident, Lopez was offered his job back. He declined.

These are extreme examples, but they show why it is important to rely more on values and judgement than strict rules.

Let this be our motto: Just tell me the rules. In 2013, an elderly woman collapsed at an assisted living facility in Bakersfield, California, and a nurse called 911. The operator asked the nurse to try to revive the woman with CPR, but the nurse refused, saying it was against policy at that facility. “I understand if your boss is telling you, you can’t do it, but … as a human being … is there anybody that’s willing to help this lady and not let her die?” “Not at this time,” the nurse replied. During the seven-minute, sixteen-second call, the dispatcher continued to plead with the nurse: “Is there a gardener? Any staff, anyone who doesn’t work for you? Anywhere? Can we flag someone down in the street to help this lady? Can we flag a stranger down? I bet a stranger would help her.” By the time the ambulance arrived, the woman had died. The executive director of the facility defended the nurse on the basis that she had followed the rules: “In the event of a health emergency … our practice is to immediately call emergency medical personnel for assistance … That is the protocol we followed.”

Very sad.


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Why do we get media slant?

May 6th, 2014 at 10:00 am by David Farrar

Greg Mankiw writes in the NY Times:

Consumers of the news, both from television and print, sometimes feel that they are getting not just the facts but also a sizable dose of ideological spin. Yet have you ever wondered about the root cause of the varying political slants of different media outlets?

That is precisely the question that a young economist, Mathew Gentzkow, has been asking. A professor at the Booth School of Business at the University of Chicago, Mr. Gentzkow was recently awarded the John Bates Clark Medal by the American Economic Association for the best economist under the age of 40. 

And what did he find?

Mr. Gentzkow and Mr. Shapiro went to the Congressional Record and used a computer algorithm to find phrases that were particularly associated with the rhetoric of politicians of the two major political parties. They found that Democrats were more likely than Republicans to use phrases like “minimum wage,” “oil and gas companies” and “wildlife refuge.” Republicans more often referred to “tax relief,” “private property rights” and “economic growth.” While Democrats were more likely to mention Rosa Parks, Republicans were more likely to mention the Grand Ole Opry.

With specific phrases associated with political stands, the researchers then analyzed newspaper articles from 2005 to determine which papers leaned left and which leaned right. (They looked only at news articles and excluded opinion columns.) That is, they computed an objective, if imperfect, measure of political slant based on the choice of language.

A nice way to do it. Wonder if that could be done here?

With a measure of political slant in hand, the researchers then analyzed its determinants. That is, they examined why some papers write in a way that is more consistent with liberal rhetoric while others are more conservative.

A natural hypothesis is that a media outlet’s perspective reflects the ideology of its owner. Indeed, much regulatory policy is premised on precisely this view. Policy makers sometimes take a jaundiced view of media consolidation on the grounds that high levels of cross-ownership reduce the range of political perspectives available to consumers.

From their study of newspapers, however, Mr. Gentzkow and Mr. Shapiro, find little evidence to support this hypothesis. After accounting for confounding factors like geographic proximity, they find that two newspapers with the same owner are no more likely to be ideologically similar than two random papers. Moreover, they find no correlation between the political slant of a paper and the owner’s ideology, as judged by political donations.

Fascinating, and reassuring. So when people go on about ownership, there is no data to back up that an owner’s ideology slants most newspapers’ coverage.

So, if not the owner’s politics, what determines whether a newspaper leans left or right? To answer this question, Mr. Gentzkow and Mr. Shapiro focus on regional papers, ignoring the few with national scope, like The Times. They find that potential customers are crucial.

If a paper serves a liberal community, it is likely to lean left, and if it serves a conservative community, it is likely to lean right. In addition, once its political slant is set, a paper is more likely to be read by households who share its perspective.

So it is about meeting market demand. That’s one reason Fox News has done so well. For decades there was no TV broadcast presence that didn’t lean left.

Religiosity also plays a role in the story, and it helps Mr. Gentzkow and Mr. Shapiro sort out cause and effect. They find that in regions where a high percentage of the population attends church regularly, there are more conservatives, and newspapers have a conservative slant. They argue that because newspapers probably don’t influence how religious a community is, the best explanation is that causation runs from the community’s politics to the newspaper’s slant, rather than the other way around.

The bottom line is simple: Media owners generally do not try to mold the population to their own brand of politics. Instead, like other business owners, they maximize profit by giving customers what they want.

Makes sense.


The comedian in chief

May 5th, 2014 at 8:20 am by David Farrar

President Obama in self-deprecating mode at the White House Correspondents Dinner.

I think it is a great tradition that the most powerful politician in the world takes part in what is effectively an annual roast at his expense. Can’t imagine it happening in Russia!


A Mega lawsuit

April 9th, 2014 at 11:00 am by David Farrar

Stuff reports:

Internet Party leader Kim Dotcom is facing a new lawsuit in the United States from six Hollywood film studios.

They claim in their suit the Megaupload founder “facilitated, encouraged, and profited” from illegal file-sharing on the site.

The Motion Picture Association of America (MPAA) filed the suit on behalf of the studios this morning (NZ time).

The lawsuit was filed by Twentieth Century Fox Film Corporation, Disney Enterprises, Paramount Pictures Corporation, Universal City Studios Productions, Columbia Pictures Industries, and Warner Bros Entertainment in the US District Court for the Eastern District of Virginia.

The US Government is already seeking to extradite Dotcom to face charges of copyright conspiracy, racketeering and money-laundering allegedly carried out by his file-sharing company, Megaupload.

It’s an interesting move. Does that signify concern over whether the criminal case will succeed, or was this always planned?

Dotcom is specifically named in the suit, under his most famous name as well as Kim Schmitz and Kim Tim Jim Vestor.

Kim Tim Jim Vestor???

According to the Government’s indictment, the site reported more than $175 million (NZ$203.4m) in … proceeds and cost US copyright owners more than half a billion dollars.

The studios allege Megaupload paid users based on how many times the content was downloaded by others. But the studios allege the site didn’t pay at all until that content was downloaded 10,000 times.

This is a key detail in both the criminal and civil lawsuits. Other file-sharing websites do not pay people based on how many downloads they get for content they upload. This is how they allege they incentivised copyright infringement, rather than just provided a file sharing platform (such as the new Mega).

This does not mean the lawsuits will be successful. But it is a key factor in why Megaupload was targeted, and not other file-sharing sites. If someone can earn say $10,000 by uploading the latest movie release, well that is a pretty good incentive to do so.

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US Supreme Court and patents

April 3rd, 2014 at 2:00 pm by David Farrar

Stuff reports:

The US Supreme Court has grappled with the standards for software patents, considering the issue for the first time in decades in a case that has divided the computer industry. …

The case concerns claims that CLS Bank International, a New York-based provider of settlement services, infringed patents owned by Melbourne-based Alice Corp. The patents cover a computerised system for using an intermediary to limit the risk that one party to a derivative trade will renege on its obligations.

CLS says Alice’s patents run afoul of Supreme Court decisions that say abstract ideas aren’t entitled to legal protection. Alice, which is partially owned by National Australia Bank, said the abstract-idea exception to patent eligibility is a narrow one.

Justice Ruth Bader Ginsburg suggested that Alice’s argument was doomed by a 2010 Supreme Court decision that limited patents on business methods by rejecting a proposed patent on a system for hedging energy trades. She asked Alice’s lawyer, Carter Phillips, how his client’s idea was any “less abstract than hedging.”

Other justices were similarly sceptical. Justice Anthony Kennedy said a group of college engineering students could probably write the computer code for Alice’s idea over a weekend.

“My guess is that that would be fairly easy to program,” he said.

You can’t always tell how a decision will go by the questioning, but it sounds like the Court is skeptical over overly broad patents that block innovation, That would be a good thing.

The Obama administration is urging the court to issue a broader ruling that would put new limits on the availability of software patents. Solicitor General Donald Verrilli told the court that software was eligible for patenting only if it “improved the functioning of the computer technology” or “is used to improve another technology.”

Software can generally no longer be patented in NZ, unless it is basically embedded in a machine.


The new McCarthyism

April 2nd, 2014 at 3:00 pm by David Farrar

Stuff reports:, the popular online dating site, called for a boycott of Mozilla Firefox to protest the world’s Number 2 web browser naming a gay marriage opponent as chief executive.

OkCupid visitors who accessed the website through Firefox on Monday were told in a message to use other browsers such as Microsoft’s Internet Explorer or Google’s Chrome.

“Mozilla’s new CEO, Brendan Eich, is an opponent of equal rights for gay couples,” the message said. “We would therefore prefer that our users not use Mozilla software to access OkCupid.”

“Especially in the kind of modern hero culture, the CEO is equivalent to the company,” said Christian Rudder, an OkCupid co-founder. “We have users who are trying to find other people and we wanted to point out that this browser might be in conflict with their own values.”

The non-profit Mozilla Foundation’s appointment of Eich as CEO on March 24 has attracted criticism from software developers, including its employees who have publicly called for Eich’s resignation on social media.

Eich, the inventor of the programming language Javascript and a Mozilla co-founder, donated US$1000 in 2008 in support of California’s Proposition 8, which banned gay marriage in the state until it was struck down by the Supreme Court in June.

I find this outrageous. Eich made a $1,000 donation to a cause he supported in 2008 (a cause around 40% of Americans agree with) and those with an opposing view basically say he should be blacklisted from employment.

I disagree with Eich on same sex marriage, but his views do not affect his ability to be CEO of Mozilla.  One can absolutely legitimately have a view against same sex marriage, but still be an excellent employer and CEO. Remember Barack Obama was against same sex marriage until 18 months ago – and Bill Clinton was also when he was President.

Turning that issue into a sort of litmus test of acceptability of employment is a new form of McCarthyism.


The biggest presidential lies

March 29th, 2014 at 7:00 am by David Farrar

The Washington Post has compiled a list of what it says are the biggest President lies since WWII. They include:

  • Eisenhower on the U2 spy plane, which he lied about
  • JFK stating that the US does not intend to militarily intervene in Cuba
  • LBJ on the Gulf of Tonkin incident which allowed him to escalate the Vietnam War
  • Nixon and secret bombings on Cambodia and Watergate
  • Reagan in denying Iran-Contra
  • Bush 41 on claims Iraq had pulled Kuwaiti babies from incubators
  • Clinton on not having sex with Lewinsky
  • Bush 43 on claims Iraq had WMDs
  • Obama on claims Americans will be able to keep their insurance plans if they want to

The Bush 41 and Bush 43 ones are debatable as there is no evidence that they did not believe what they said was correct. The other earlier ones are all clear lies, where the President knew what they said was false.


A hateful man

March 21st, 2014 at 10:00 am by David Farrar

Stuff reports:

The Reverend Fred Phelps Sr., the fiery founder of a small Kansas church who led outrageous and hate-filled protests that blamed almost everything, including the deaths of AIDS victims and US soldiers, on America’s tolerance for gay people, has died. He was 84.

Daughter Margie Phelps said Phelps, whose actions drew international condemnation, died around midnight on Wednesday (local time). She didn’t provide the cause of death or the condition that recently put him in hospice care.

The so called church was basically his extended family. The sad thing is that such a small sad bunch of people could generate international media coverage when they did one of their relentless protests.

Phelps is a disbarred lawyer who physically abused his wife and children, and even got excommunicated from his own church eventually. Scarily in 1992 he got 31% of the vote in Kansas in the Democratic primary for the US Senate!

It will be interesting if his own funeral is picketed by members of his former church.


Monday Motivator – Monument Valley

March 10th, 2014 at 12:09 pm by Richard Hume

Monday Motivator 13

Monument Valley, USA

After several days photographing in and around Monument Valley I captured one of my favourite shots from that trip literally from one of the main viewing carparks. Photography is interesting this way  in that sometimes the shot is right there in front of you and other times you need to work damn hard for the shot.

Still uploading to the site so no larger view of it this week.


Richard []

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The CPAC presidential poll

March 10th, 2014 at 10:00 am by David Farrar

Stuff reports:

Kentucky Senator Rand Paul won the conference’s presidential preference straw poll, a symbolic victory that reflects his popularity among conservatives who typically hold outsized influence in the GOP’s presidential selection process.

Not really. Here’s a list of poll winners, and most of them never became the party nominee:

  • Ronald Reagan (became nominee)
  • Jack Kemp
  • Phil Gramm
  • Steve Forbes
  • Gary Bauer
  • George W Bush (became nominee)
  • Rudy Giuliani
  • George Allen
  • Mitt Romney (lost nomination in 2008, won it in 2012)
  • Ron Paul
  • Rand Paul

Rand Paul is more politically acceptable than his father Ron Paul, and is a serious contender. But I wouldn’t call him the front runner.



March 4th, 2014 at 4:00 pm by David Farrar

The Cato Institute is a libertarian free market think tank in the US that is very pro free trade.

However they have string reservations around the TPP, specifically the intellectual property chapter. The fact these come from normal champions of free trade agreements makes them harder to rebut.

They have a webinar on the TPP on Thursday morning for those interested.

The blurb is:

 Intellectual property has been a focus of U.S. trade policy for many decades, and the Trans-Pacific Partnership negotiations include an especially ambitious effort by the United States to strengthen international intellectual property laws. At the same time, however, there is serious debate within the United States over the proper scope and level of intellectual property protection. Is it in the interests of the United States to seek to harmonize intellectual property rules around the world, or is the U.S. position overly influenced by special interests hoping to export bad policy abroad and to lock it in at home? Come hear our panel of experts discuss why trade agreements cover intellectual property law, whose interests are served, and what, if anything, should be done about it.

Hopefully the NZ negotiators will maintain their position of opposition to the proposed US text for the intellectual property chapter.

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The NY battle over charter schools

February 20th, 2014 at 7:00 am by David Farrar

The Wall Street Journal writes:

For several months running, the Bill and Eva Show has been the talk of New York City politics. He is the new mayor, Bill de Blasio, an unapologetic old-school liberal Democrat, scourge of the rich and of public charter schools. She is Eva Moskowitz, fellow Democrat and educational-reform champion who runs the city’s largest charter network.

Note she is a Democrat. Many Democrats support charter schools as they have done so much to improve educational outcomes for the most disadvantaged.

As she reminds every audience, the 6,700 students at her 22 Success Academy Charter Schools are overwhelmingly from poor, minority families and scored in the top 1% in math and top 7% in English on the most recent state test. Four in five charters in the city outperformed comparable schools.

One can understand why some in public schools hate them.

Union leaders dismiss the charters as a boutique effort, with only 4% of the national school population—yet teachers unions and their political allies also treat charters as an existential threat. Charters hire teachers who don’t have to join and pay union dues, and who work outside the traditional system.

This is the real motivation for some. Charter schools don’t pay protection money to the unions.


More charter school benefits

February 9th, 2014 at 10:00 am by David Farrar

Alex Tabarrok at Marginal revolution blogs:

Private and charter schools appear to have significant but modest effects on test scores but much larger effects on educational attainment and even on long-run earnings. A new working paper from Booker, Sass, Gill and Zimmer and associated brief from Mathematica Policy Research finds that charter schools raise high school graduation, college enrollment and college persistence rates by ~7 to 13%. Moreover, the income of former charter school students when measured at 23-25 years old is 12.7% higher than similar students. Similar in this context is measured by students who were in charter schools in grade 8 but who then switched to a traditional high school–in many ways this is a conservative comparison group since any non-random switchers would presumably switch to a better school (other controls are also included).

The effect of charters on graduation rates is consistent with a larger literature finding that Catholic schools increase graduation rates (e.g. here and here). I am also not surprised that charters increase earnings but the earnings gain is surprisingly large; especially so when we consider that the gain appears just as large among charter and non-charter students both of whom attended college (i.e. the gain is not just through the college attendance effect).

I wouldn’t bet on the size of the earnings effect just yet but what we are learning from this and related research, such as Chetty et al. on teachers, is that better schools and better teachers appear to have a significant and beneficial long-run impact that is not fully captured by higher test scores.

Wouldn’t it be great if we could replicate that impact in New Zealand.


Beyond the hyperbole

February 6th, 2014 at 7:00 am by David Farrar

Stuff reported:

The Government wants to override privacy laws to supply the US Government with private details about Americans living in New Zealand.

As part of a global tax-dodging crackdown, the US is forcing banks and other financial institutions to hand over the private financial details of US “persons” and companies based overseas.

From July this year, Kiwi banks and insurers will be required to provide US tax authorities with American customers’ contact details, bank account numbers and transaction history.

The move is already deeply unpopular among banks and expat Americans overseas, some of whom have accused the US of “fiscal imperialism”.

In New Zealand, it has left banks stuck between defying the US and breaking domestic privacy laws that protect all New Zealand residents, including Americans.

But now the Government is stepping in with plans to “override” privacy laws to help banks meet the US demands and reduce costs.

And who is complaining about this:

Council of Trade Unions economist Bill Rosenberg said the US’s tax reporting requirements were another example of US interests dictating New Zealand law.

“There is clearly a breach of privacy here.”

It’s amusing to have the CTU defend the rights of US tax evaders. They are the ones that are affected by this. The next time the CTU goes on about people not paying enough tax, we should recall their support for US citizens to be able to evade tax through NZ banks.

A banking source e-mails:

The first thing to point out is that the only people with something to worry about with FATCA are American tax evaders…not the people you’d normally think the CTU would worry about. The actual number of people affected in NZ will be very, very small. If you’re a New Zealander you’ve got nothing to worry about, if you’re an American and you’ve met you tax obligations you’ve got nothing to worry about.

Secondly, it’s not as though the NZ Govt is an outlier in taking these steps. In fact as this site shows virtually every developed nation is in the process of taking similar steps. The brutal reality is that if NZ does not meet our FATCA obligations the U.S will put us on black list and whack a 30% odd withholding tax on any US transactions by NZ financial institutions – this will cost all NZers. This is why NZ and pretty much every other developed country is meeting its FATCA obligations.

In fact the Government has actively pushed back to protect NZers privacy as much as possible – the Bill is drafted so as to ensure that only bare minimum of data required to meet our FATCA obligations is passed over.

End story is that no one really wants to be doing this but just as in Australia, the UK, Norway, Spain, South Africa, Brazil, Switzerland, Thailand, Russia etc etc we have no choice. 

The CTU standing up for the rights of Americans to evade tax. What champions they are.

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More on poverty and school results

January 30th, 2014 at 2:00 pm by David Farrar

Amanda Ripley at Talking Points Memo writes:

There is just one valid way to compare how students from different socio-economic backgrounds do on this same international test. And that’s to look at the scores for kids at different income levels, data the Organisation for Economic Co-operation and Development (OECD) routinely collects. What we see from the data is that our poorest kids perform worse than their peers in other countries—and so do our richest kids. Even our middle-class kids score worse than middle-class kids in Germany, Finland, New Zealand and Korea, among other places. Our kids do better in reading than in math or science—but they don’t tend to score at the very top of the world in any subject.

Countries with significant levels of child poverty now outperform the U.S. on international tests (Canada, Estonia, Poland and Vietnam, for example). So the urgent question is not whether we must fix poverty before we fix schools (or fix schools before we fix poverty). The question is, What did these other countries do to help mitigate against the toxic effects of poverty? And what can we learn from them?

Poverty is a factor, but as the US results show it is not a determining one.

To me, the value of the international educational comparisons is not to prove who is right or wrong; it is to see what is possible, to find the outliers and try to learn from them. Poland, which has a 16 percent child-poverty rate and spends dramatically less than we do per pupil, had worse PISA scores than we did in 2000. Today, Polish 15-year-olds outscore their American peers in math, reading and science. Poland has more teenagers performing at an advanced level in math than Finland (which has a mere 4 percent child poverty rate). Meanwhile, other countries have very low levels of child poverty but end up with worse education outcomes than Poland (Norway and Sweden come to mind).


The Huffington Post also reports:

The data was provided to The WorldPost by Pablo Zoido, an analyst at the Organisation for Economic Co-operation and Development, the group behind PISA. It shows that students’ wealth does not necessarily make them more competitive on an international scale. In the United States, for example, the poorest kids scored around a 433 out of 700 on the math portion of PISA, while the wealthiest ones netted about a 547. The lower score comes in just below the OECD average for the bottom decile (436), but the higher score also comes in below the OECD average for the top decile (554).

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Mankiw on income inequality and parental resources

January 27th, 2014 at 12:00 pm by David Farrar

Greg Mankiw is the Chairman and Professor of Economics at Harvard. His blog is ranked No 1 in the US by economic professors. He blogs:

When people think about inequality of incomes, a key issue is inequality of opportunity. Some people are born to rich parents who can afford private schools, summer camp, SAT tutors, etc., while others have poorer parents who cannot easily afford such things. One might wonder how much of the income inequality we observe can be explained by differences in the resources that people get because of varying parental incomes.

Let me suggest a rough calculation that gives an approximate answer.

The recent paper by Chetty et al. finds that the regression of kids’ income rank on parents’ income rank has a coefficient of 0.3. (See Figure 1.) That implies an R2 for the regression of 0.09. In other words, 91 percent of the variance is unexplained by parents’ income.

I would be willing venture a guess, based on adoption studies, that a lot of that 9 percent is genetics rather than environment. That is, talented parents have talented kids partly because of good genes. Conservatively, let’s say half is genetics. That leaves only 4.5 percent of the variance attributed directly to parents’ income.

Now, if you let me play a bit fast and loose with the difference between income and income rank, these numbers suggest the following: If we had some perfect policy invention (such as universal super-duper pre-school) that completely neutralized the effect of parent’s income, we would reduce the variance of kids’ income to .955 of what it now is. This implies that the standard deviation of income would fall to 0.977 of what it now is.

The bottom line: Even a highly successful policy intervention that neutralized the effects of differing parental incomes would reduce the gap between rich and poor by only about 2 percent.

This conclusion does not mean such a policy intervention is not worth doing. Evaluating the policy would require a cost-benefit analysis. But the calculations above do suggest that all the money the affluent spend on private schools, etc., explains only a tiny fraction of the income inequality that we observe.

The best way to reduce the gap between rich and poor is education, in my opinion.

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Dotcom issues

January 22nd, 2014 at 12:00 pm by David Farrar

Josie Pagani blogs at Pundit:

If the FBI case is weak, that begs the question, why are the New Zealand Police continuing to pursue it?

Because it is not their role to decide if a case is weak. If a valid extradition request is received, the NZ Police are obliged to act on it, just as we expect the FBI to respond to extradition requests from NZ.

Whether a request results in extradition will be effectively decided by a New Zealand Judge (and rubber stamped by the Minister of Justice). It is a legal decision, not a political decision.

The NZ Judge does not decide if someone is guilty or not, just that the charges laid are ones that would also be crimes in NZ, and that there is a prima facie case to answer.

So the fate of Dotcom in a legal sense is a decision for Judges, not politicians. First a NZ Judge has to decide if he can be extradited, and then a US Judge (and possibly jury) will decide if he is guilty of the offences he has been charged with.

As I have said in the past, he may have run Megaupload in such a way that it stayed within the law. Again that is a decision for a judge (or jury to make). The US is not Albania. It has a robust court system, with guaranteed rights under the Bill of Rights.

If a NZ Judge finds that he should not be extradited, then good on him. And if he is extradited, and is found not guilty, then also good on him.

The New Zealand government better hope that Dotcom doesn’t get extradited and then win his case, because the damages owed will be in the millions. It was our police who shut down a multi-million global business. It’ll be New Zealand tax payers who pay the reparation.

This is not correct. NZ Police did not shut it down. The FBI did. NZ taxpayers are not responsible for reparation. What NZ taxpayers may be responsible for is mistakes made by the Police in his arrest, and that is (as it should be) being heard in court.

Now we turn to the politics, and that should be separate to the legal issues, but they get mixed up. National has the misfortune to be in Government when the charges were laid and extradition requested. Hence Dotcom blames them. If Labour had been in power, I suspect exactly the same would have occurred to him, and he would now be railing against the evil Labour Government and Helen Clark.

Dotcom is obviously not keen to face trial in the United States. He is trying to turn a legal issue into a political one. I don’t blame him for that. If I was in his shoes and with his money, I’d try to do exactly the same.  If you are a political party leader, then that make extradition a political issue, not a legal issue. You extradite alleged criminals, not politicians.

So whenever Dotcom does something in the political sphere, I ask a simple question. Would he be doing this, if he wasn’t facing extradition to the United States on these criminal charges?

My preference is for Dotcom to have his day in court (first NZ and then if extradited, the US). If he wins at either of these, then I’d welcome all his plans to invest in a new cable, promote more fibre, have encrypted file sharing etc. But again, would he be throwing parties for 25,000 people if he wasn’t facing extradition?

I am no fan of the way the Hollywood entertainment industry have tried to cripple the Internet and some of the laws they have tried to get countries to enact. In fact I have fought against them. But in terms of applying the law, that is a decision for courts, not politicians.

In terms of the political impact of the proposed party, Liam Hehir writes in the Manawatu Standard:

Is Kim Dotcom’s new “Internet Party”:

a) A new party geared towards internet- conversant millennials;

b) Another Left-wing party entering an already crowded field; or

c) Some new force poised to tap into massive disillusionment with politics-as-usual?

No matter what the party’s founders intend, the voters will come to their own conclusions. The answer will determine what impact (if any) the new party has on the electoral landscape.

The first possibility would be a potential threat to the National Government. More than a few libertarian-ish millennials vote National by default. The “ish” suffix is appropriate because these voters are not particularly ideological. They can abide neither Labour’s slavish political correctness nor the Marxian economics of the Greens. They do not have any particular love for National.

They do care about issues an internet-oriented party could capitalise on.

Take, for instance, the matter of geo-blocking. This occurs when media rights holders prevent access to pay-services by New Zealand addresses. The most obvious example is the popular service Netflix, which streams television and movies over the web for a pretty reasonable cost. Like many such services, it is closed to New Zealanders.

Geo-blocking is one of my pet hates. It is not something that NZ can do anything about, but eventually I believe it will die, and we will have one global market for content.

On the other hand, if the Internet Party is seen as just another anti- John Key party – along with Labour, the Greens, Mana and New Zealand First, then I think any threat to the Government will be negligible. Its existence could even help National in a tight election year.

The Greens are sounding rather hostile to the party, and Labour less than enthused. If even 2% of their supporters vote for it, and the vote is wasted, that may be enough to keep National in power. Intentions and impacts are not the same thing.

The final possibility is that the Internet Party could become a true protest party – absorbing the votes of the disenfranchised and generating new voters from among the increasing numbers of those who would otherwise not turn out.

This is the hope of at least some of Mr Dotcom’s Left-wing boosters. In a gushing write-up by socialist commentator Chris Trotter, for instance, the Internet Party was heralded as a potential parallel to Italy’s Five Star Movement, an ‘anti- politics’ party which rode a wave of voter disgust to a stunning electoral performance in that country’s elections last year.

But New Zealand is not Italy. Going into its last election, the latter country had been forced into austerity by a sovereign debt crisis. Things were so bad that, at the time, Italy was actually being governed by an unelected proconsul of the European Union. By contrast, our leaders have generally steered a good path through the recession and the economic forecast is now fairly sunny.

One can understand why the Government’s antagonists might be frustrated at the apparent immovability of the polls. If they are counting on some groundswell of disenchantment with New Zealand politics to wash John Key away, however, I think they do so at their peril.

It will be interesting to see the impact, if they ever get around to an actual launch, policies and candidates. I’ll probably like some of their policies. But there are policies I like (to varying degrees) in most political parties (except Mana probably).

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Waldegrave on living wage

January 21st, 2014 at 12:00 pm by David Farrar

Rev Waldegrave defends his living wage calculations:

Second, she shamelessly selects luxury categories out of the Household Economic Survey (HES) database which is used for all New Zealanders, including the very wealthy, to imply the living wage includes international travel, Sky TV and the double counting of mortgage insurance simply because the questions are there. HES data is the record Statistics NZ gathers to show movements in income and expenditure for all New Zealanders. Everyone is asked all categories, but lower income households are hardly likely to be recording owning yachts or regular international travel. People who rent houses don’t record mortgage insurance, just as homeowners don’t fill in the rent columns.

Actually many low income households have Sky TV. The point is Waldegrave could have asked Stats NZ for data that excluded the costs of luxuries, but then that would not have produced such a high number. And he states why:

A living wage, on the other hand, refers to having those necessities, but also having the ability to participate modestly in society. Examples include being able to afford a computer, especially for children in a household, and a modest insurance policy. It could also include a trip to family in Australia or Samoa for an important occasion where savings have been put aside or extended family contribute.

So Waldegrave’s living wage is designed to include overseas travel. Clear.

Waldegrave misses the key issue around the living wage, and doesn’t mention it once, because it is so fatal to his cause. Only around 10% of those who earn the living wage are in the sort of household his calculation is based on.

We see this issue also in the minimum wage. Tyler Cown blogs a recent paper on the US minimum wage:

Only 11.3% of workers who will gain from an increase in the federal minimum wage to $9.50 per hour live in poor households…Of those who will gain, 63.2% are second or third earners living in households with incomes three times the poverty line, well above 50,233, the income of the median household in 2007.

A stunning figure.

I once was earning at (actually below) the minimum wage. That didn’t mean I was poor, or in a poor household. It meant I was young.


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A sad case

January 18th, 2014 at 10:00 am by David Farrar

Stuff reports:

With a ventilator slowly inflating her lungs and forcing oxygen into a bloodstream moved through her body by an artificial heartbeat, Marlise Munoz is unaware that she has become the focus of yet another American debate over what it is to live and die, and over abortion.

Marlise, a paramedic, was 33 years old and 14 weeks pregnant when she collapsed in November, probably from a pulmonary embolism, a fatal blood clot in a lung.

Her husband Erick, a firefighter, found her slumped on the kitchen floor in the middle of the night and called for help even as he fought to resuscitate her.

At the John Peter Smith Hospital in Fort Worth, Texas, doctors used drugs and electric shocks to restart her heart. They were too late. Doctors discovered that though machines were able to artificially maintain some of the mechanical processes of her body, Marlise’s brain was silent. She was dead, clinically and legally.

The family gathered by her bedside in the hospital’s three-storey intensive care unit and prepared to farewell her. They were stunned when doctors refused to turn off the ventilator.

Having detected a foetal heartbeat hospital authorities said they were bound by a Texas law that prohibits doctors from withholding “life-sustaining treatment” from a pregnant woman.

Erick protested. He and Marlise had lived their professional lives close to life and death and had discussed circumstances like these. Marlise did not want such artificial medical intervention. Marlise’s extended family and Erick’s colleagues agreed.

Marlise’s mother, Lynne Machado, 60, told The New York Times: “It’s about a matter of our daughter’s wishes not being honoured by the state of Texas.” Her father, Ernest Machado, 60, a former police officer, told the Dallas News: “That poor foetus had the same lack of oxygen, the same electric shocks, the same chemicals that got her heart going again. For all we know, it’s in the same condition that Marlise is in. All we want is to let her rest, to let her go to sleep. What they’re [the hospital staff] doing serves no purpose.”

This shows the problems of legislating in an area, where doctors and families should have discretion.

Assuming the courts do not over-rule the hospital, then we have three broad possible outcomes:

  1. The baby/feotus dies or is still-born, meaning Munoz was kept on life support for no reason for several months, causing huge anguish to her family.
  2. The baby is born, but is severely brain damaged. Who then looks after him or her?
  3. The baby is born and is healthy, and grows up learning that if his family had got their way, they would not have been born.

So whatever happens, the outcome looks to be pretty sad.


Well they are annoying

January 15th, 2014 at 10:00 am by David Farrar

Stuff reports:

A retired police officer has shot and killed a man who wouldn’t stop texting during a movie in Florida, US police say.

To be fair it is a very annoying habit, and it may have been a very good film.

71-year-old Curtis Reeves asked Chad Oulson, 43, to stop texting.  When he didn’t, Reeves allegedly shot him.

The major problem with that, is you probably then don’t get to see the rest of the film.

No tag for this post.

Monday Motivator – Scenic Highway 163

January 13th, 2014 at 9:39 am by Richard Hume

Monday Motivator 9

Scenic Highway 163, Monument Valley, USA

I love visiting the USA and am always blown away by the amazing photo opportunities this incredible country offers.

If you have ever been to Monument Valley then you will know how immense this landscape is. This photograph was taken early one morning along Sate Highway 163 as I looked for an alternative view of the famous spires.

Click on the image for a larger view of this photograph.

Free Wallpaper – Desktop or iPad

You can download it as a free Desktop Wallpaper HERE  – Last weeks photo ‘Delicate Arch’ is also available – please share with your friends.


Richard []


Duty by Robert Gates

January 11th, 2014 at 7:00 am by David Farrar

A book I’ll definitely be buying is Duty by Robert Gates. Gates was rated by the Washington Post as the best Defence Secretary since WWII, and had served numerous Presidents (he is a Republican) over the decades. Some of his roles include:

  • CIA staffer in Nixon presidency
  • NSC staffer in Ford presidency
  • senior CIA director in Carter presidency
  • DDI and DDCI in Reagan presidency
  • Deputy NSA in Bush 41 presidency
  • CIA Director in Bush 41 presidency
  • Secretary of Defence in Bush 43 presidency
  • Secretary of Defence in Obama presidency

The Wall Street Journal has the top 10 excerpts from his memoirs. They include:

  • Mr. Gates expresses open disdain for Congress and the way lawmakers treated him when he testified at hearings. “I saw most of Congress as uncivil, incompetent at fulfilling their basic constitutional responsibilities (such as timely appropriations), micromanagerial, parochial, hypocritical, egotistical, thin-skinned and prone to put self (and re-election) before country.”
  • Mr. Gates expresses particular dissatisfaction with Vice President Joe Biden. He describes Mr. Biden as a “man of integrity” who “has been wrong on nearly every major foreign policy and national security issue over the past four decades.”
  • Mr. Gates writes. “His [Obama] White House was by far the most centralized and controlling in national security of any I had seen since Richard Nixon and Henry Kissinger ruled the roost” in the 1970s.
  • “The controlling nature of the Obama White House, and its determination to take credit for every good thing that happened while giving none to the career folks in the trenches who had actually done the work, offended Secretary Clinton as much as it did me,” Mr Gates writes. In one meeting, Mr. Gates says that he challenged Mr. Biden and Thomas Donilon, then Mr. Obama’s deputy national security adviser, when they tried to pass orders to him on behalf of the president. “The last time I checked, neither of you are in the chain of command,” Mr. Gates says he told the two men.

A good analysis of the book is from John Dickerson at Slate.