Some interesting data in the Herald about the impact of Labour’s free tertiary frees policy:

• Increased students from wealthy areas (deciles 6 to 10) from 62% to 69%
• Decreased students going to polytechs from 33% to 30% of all students
• Decreased students going to wananga from 1.7% to 0.5%
• 42% of fees free students who studied for two years failed at least one course
• Enrolments fell by 7.000

So the summary is it resulted in fewer students overall, more students failing, fewer students from poor areas and fewer students going to polytechs or wananga.

Well done Labour.

The US House of Representatives has impeached Donald Trump (for the second time) by a vote of 232-197.

10 Republicans voted for the impeachment. This is the most votes ever in the House for an impeachment from members of the same party as the President. The other votes have been:

• Andrew Johnson was impeached with 126 Republican votes and 0 Democrats
• Bill Clinton was impeached with 223 Republican votes and 5 Democrats
• Donald Trump in 2018 was impeached with 229 Democrats, 1 Independent and 0 Republicans
• Donald Trump in 2021 was impeached with 222 Democratic votes and 10 Republicans

The trial in the Senate will start on 19 January and not conclude before his term expires on 20 January. However a conviction would not be inconsequential as the Senate could also vote to bar Trump from any future federal office.

The GOP leader in the Senate, Mitch McConnell, has said he will only decide how to vote after listening to the evidence. This is significant as in the previous trial, McConnell and most Republicans said outright they would not convict before the trial started.

Was saddened to read that photographer Kent Blechynden had died. There is a very good obituary from former DP Editor Tim Pankhurst. What I like about the obituary is it doesn’t whitewash Blechynden’s life detailing both his incredible skills but also his alcoholism.

A guest post by a reader:

There is a story regarding the 1929 sharemarket crash involving Patrick Kennedy (the father of assassinated US President John F Kennedy).  At that time, Mr Kennedy was a leading stock market investor and entrepreneur (this was the original source of his personal wealth, which after the crash he then allegedly applied even more successfully to bootlegging during the prohibition error of the great depression that was to follow). 

But the story explains why, unlike virtually all of his fellow investors in the over-heated US stock market in 1929, Mr Kennedy still had any wealth left to invest in illicit alcohol after the spectacular Black Monday crash in October 1929.  In fact, Mr Kennedy was one of the very few investors who shrewdly foresaw the impending crash and sold his shares for a handsome profit.

The storey explaining why Mr Kennedy knew to sell his over-priced shares in mid-1929 may be apocryphal but it is still relevant.  At that time, the movement and developments on the US stock market were followed closely and widely discussed by both investors and watchers alike.  It was the historic equivalent of the current New Zealand public and media’s fixation on property prices and everyone joined in.

And at its peak in mid-1929 Mr Kennedy is reported to have fallen into conversation with one of the many shoe-shine boys who worked around the New York Stock Exchange.  To Mr Kennedy’s surprise the shoe shine boy started swapping stock tips with the million investor.  Intrigued, Mr Kennedy enquired as to the boy’s stock positions and predictions for the market. 

Afterwards Mr Kennedy pondered how a nearly impoverished child could possibly have invested all he had in the stock market – and what this meant for the market over-all.  He quickly realised that, once the shoe shine boys were investing, there was literally no one left to sell too and the market had become saturated – so he then liquidated all his positions and sold his holdings, mere weeks before his predication proved true.

Mr Kennedy’s decision to sell his shares was an instinctive example of what economists call “the greater fool” theory.   That theory goes that, when a market is “hot” and everyone is participating, investors stop properly weighing the risk of future losses but instead focus upon the fear-of-missing-out (FOMO) on future price rises. 

Each new sale provides evidence of price rises and so draw in even the most cautious investors.  Soon prices become detached from the inherent value of the asset (its actual financial return from normal ownership or use).  Instead, the focus is now upon the profit from a future on-sale of that asset and not from its financial return in the interim.  

An investor may be prepared to take a short-term loss while it owns the asset provided s/he thinks that asset can soon be on-sold at a profit.  But this strategy is based on the assumption that there will be someone willing to buy that asset at an even higher price – a “greater fool”! 

But eventually the music must stop and someone will be left holding the asset – and s/he will be the greatest fool of all, who suffers both an ongoing loss while they continue to hold that asset and also a loss if they try to sell it.

Applied to the New Zealand property market, for nearly 40 years the tax system effectively guaranteed the profit of each greater fool.  Ongoing losses could be offset against other sources of current income (thereby providing a cushion against poor rental investments) and the proceeds of any future sale to another fool were tax exempt.  So any fool who could wait out market corrections was largely protected until the music started again and a greater fool could be found.

But in the past 5 years those tax protections have been stripped away.  Ongoing rental losses are now “ring fenced” and cannot be offset against other income – the cushion has been removed.  And under the Brightline rule, tax is now routinely imposed on most on-sales of rental properties (and may soon be imposed on repeated sales of the investor’s own home). 

These tax changes leave the fools exposed – yet fools continue to flock to the over-heated New Zealand property market.

In my professional capacity I advise many career property investors.  For almost 20 years I have had a ring-side seat to the activities of these professionals.  These are hard-bitten men and women who have spent years to learn and understand the market, know how to weigh the risks and crunch the numbers, and have nerves of steel.  The skill and courage necessary to succeed in “the property game” is beyond me – and it is not for the faint hearted.   But win or lose, they know what they are doing.

Unfortunately in the past year I have noticed a different calibre of clients.  These are mum-and-dad investors with no previous experience in property development or trading.  Accordingly, their understanding of the market is lower and correspondingly their risks are greater.  They are risking it all to enter the property market, driven by FOMO and the hope of a greater fool. 

This cannot end well.  With the New Zealand economy shut in its bubble, Covid-19 ravaging all our international trading partners, local business suffering and unemployment rising, the market is propped up solely by the historically low interest rates upon which all profit projections are based.  But even a small change to those interest rates could prove devastating to many of my new clients.  There may be no greater fools left.  Because in 2021 all the shoe shine boys have become property developers …

Reuters reports:

President Donald Trump’s iron grip on his party showed further signs of weakening on Tuesday as at least three Republicans, including a member of the House leadership, said they would vote to impeach him after his supporters stormed the Capitol.

Liz Cheney, the No. 3 Republican in the House of Representatives, said: “There has never been a greater betrayal by a President of the United States of his office and his oath to the Constitution,” as the Democratic-led chamber moved forward on a path to remove Trump from office.

Trump “summoned this mob, assembled the mob, and lit the flame of this attack” on the Capitol last Wednesday, Cheney, the daughter of former Republican Vice President Dick Cheney, said in a statement, adding: “I will vote to impeach the president.”

Two other Republican House members, John Katko and Adam Kinzinger, said they would also vote for the historic second impeachment of the Republican president, who leaves office in just eight days.

If inciting the invasion of the Capitol to disrupt the counting of the votes of the electoral college doesn’t warrant impeachment, then hard to imagine what would.

It is still highly unlikely the Senate will convict Trump, but that may depend on McConnell. If he was to vote for conviction, then he would probably carry 20 or so Senators with him. Without McConnell you probably get 56 votes max for conviction, 11 short of the 67 needed.

Also of interest is that if convicted, the Senate can vote by simple majority to bar the person convicted from any future federal office.

A guest post by Hon Dr Michael Bassett:

If modern New Zealand History is to be taught to all students in schools the curriculum should not start in 1840. By then Maori had been 500 years in Aotearoa, the last forty of them in a state of almost perpetual warfare. One historian, Angela Ballara, has noted that warfare “was endemic in Maori society; it was an integral part of the Maori political system”. Once chiefs acquired muskets wars were waged with a new intensity. Between 1800 and 1840 most traditional iwi were raked fore and aft, and between 40,000 (Keith Sinclair’s estimate) and 50,000 (Ron Crosby’s estimate) Maori were killed, eaten or enslaved. This was approximately 25% of all Maori in the country at that time. More lost their lives during the Musket Wars than all the Kiwis killed in World Wars One and Two combined. Lands were pillaged, iwi borders changed, and livelihoods disrupted on a huge scale.

As the late Michael King observed in the introduction to Ron Crosby’s The Musket Wars: A History of Inter-iwi Conflict, 1806-45, applying the 1840 rule for starting New Zealand history “has as much logic and fairness” as the application of a 1940 rule would have for Europe after Germany had over-run much of the Continent. The Waitangi Tribunal that I sat on for a decade was required to examine Maori grievances dating back to the Treaty of 1840, but not before that. In reality, as I soon discovered, many of the grievances had an earlier origin. This became clear when inquiries were made into disputes over the Crown purchase of lands in the 1840s and 1850s that led on to the New Zealand Wars of the 1860s. Historian Ray Fargher has shown in his biography of Donald McLean, the Crown’s Maori-speaking chief land purchaser, even at his most scrupulous in earlier times where he tried hard to ascertain which iwi owned what before buying, McLean ran into conflicting claims. They often came from Maori who had been dispossessed of their land by other Maori during the Musket Wars. The large number of Maori who supported, or fought alongside the Crown in the 1860s – Kupapa (or friendly) Maori – were often people with grievances against other tribes which had destroyed their homes and/or dispossessed them of their lands before 1840. Many were happy to see General Cameron and his forces deliver rough justice to their old enemies.

What this all means is that bleeding heart versions of our history (Australia’s John Howard called it “black armband history”) need to be treated with great caution. Those who push the line that everything was lovely in Aotearoa until the colonists arrived, and that they were responsible for depriving Maori of their ancestral lands, are telling selected and often misleading bits of our story.  In reality, Maori society was in a parlous state when colonists arrived in significant numbers in the 1840s and 1850s. Yes, governors, politicians and settlers wanted access to Maori land. Some cut corners acquiring it. But even the most scrupulous land purchasers found many parts of Maori society a minefield of ancient hostilities and were worn down by conflicting assertions about historical ownership. It needs to be remembered that while the wars of the 1860s did terrible damage to what remained of the Maori economy, much damage had already been done to it by other Maori before the colonists arrived.

Choosing textbooks for students will be difficult. One current contender I’ve read provides no detail about the Musket Wars and fails to mention either Ron Crosby’s or Ray Fargher’s books for “further reading”. Students will get an unbalanced version of our history from texts of this kind. The current craze for painting all Maori as innocent victims of dishonest Europeans also needs to be evened up with stories about how welcome were the new traders, settlers and Pakeha authority amongst Maori in areas like Auckland. By 1840 Maori numbers in what we now call the City of Sails had been reduced to barely 800 people inhabiting one million acres between Kaipara and east Tamaki because of the depredations of Ngapuhi over the previous twenty years.

Teaching a fair and accurate version of New Zealand history won’t be easy unless the Ministry of Education seizes control of the process and ensures that it doesn’t become the preserve of single-minded fanatics claiming to be historians but with axes to grind. They have the potential to stir unwarranted racial animosity in a country which, for much of its existence, tried to be fair to all people according to the norms of the day.

Dr Bassett taught New Zealand history at the University of Auckland, Georgetown University and the University of Western Ontario and sat on the Waitangi Tribunal 1994-2004. He was a Cabinet minister in the 1980s.

1. China 9.00 million
2. US 8.99 million
3. US 2.68 million
4. Israel 1.85 million
5. Italy 701k
6. German 613k
7. Spain 406k
8. Canada 320k
9. Poland 203k
10. France 138k
11. Romania 125k
12. Denmark 116k
13. Argentina 108k

NZ will probably not be vaccinating a single person until June!!!

The Australian reports:

Australia has banded together with three of its Five Eyes security partners to demand China respect the freedoms of Hong Kongers, in a joint statement attempting to ensure Beijing can’t single out the Morrison government for punishment.

Government sources confirmed the show of diplomatic force, made days after the arrests of 55 politicians and activists in Hong Kong, was designed to make clear that China’s aggressive actions there following the passage of a new security law were a global concern. There would be more joint statements in the months ahead when people’s freedoms and rights were under threat.

Analysts said it would enforce the message that Australia was not acting alone. Foreign ministers Marise Payne, Francois-Philippe Champagne (Canada), Dominic Raab (UK) and US secretary of State Mike Pompeo ­expressed their “serious concern” at the mass arrests in Hong Kong for subversion under the national security law.

Sad that NZ Govt decided not to support Australia in standing up for Hong Kong.

There have been several joint statements issued by Five Eyes countries concerning Hong Kong in recent months but in this latest rebuke New Zealand remained mute. A New Zealand Ministry of Foreign Affairs spokesperson said the country had “serious concerns” about the situation in Hong Kong. While it would make joint comments with allies, on this occasion Foreign Minister Nanaia Mahuta responded independently last week.

The Australian understands there was a delay in issuing the joint statement following 72 hours of diplomatic exchanges between all five partners resulting in just the quadrilateral statement.

NZ deliberately decided to stay mute. This will embolden China as they will see that fear of retribution works.

The Herald reports:

Donald Trump’s former ally and Vice President Mike Pence has not ruled out invoking the 25th Amendment in the last days of Trump’s presidency, sources say.

The move would strip the President of his powers, transferring them to Pence, but CNN reports he is saving the option in case Trump “becomes more unstable”.

The report comes as disturbing new details emerge about the apparent murderous intentions of some of the pro-Trump rioters who stormed the US Capitol this week, including killing Pence and House Speaker Nancy Pelosi.

What happened was bad enough with five dead, including a police officer. But it could have been far worse.

A Reuters photographer recounted what rioters were discussing as they tore through the Capitol on January 6 – including hanging the Vice President from a tree for being a “traitor”.

Despite being a Republican, Pence is now loathed by a number of Trump supporters after endorsing Joe Biden’s electoral college victory.

They loathe him because Trump lied to them and told them that Pence could unilaterally ignore the results of the election and declare Trump President again. He incited a mob against his own VP.

Pence did not endorse anything. He simply did his job – oversaw the counting of the votes.

It is highly unlikely the 25th amendment will be triggered, but if it is, here is the process:

1. The VP and a majority of the Cabinet inform the President pro tempore of the Senate and the Speaker of the House of Representatives that the President is unable to discharge the powers and duties of his office
2. The Vice President immediately assumes the powers and duties of the office as Acting President.
3. The President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that no inability exists.
4. The VP and a majority of the Cabinet affirm to the President pro tempore of the Senate and the Speaker of the House of Representatives their view that the President is unable to discharge the powers and duties of his office
5. Congress must meet with 48 hours to determine if the President is able to discharge the powers and duties of his office
6. The President resumes his powers 21 days after the Congress meets, unless Congress votes by two-thirds majority in each house that The President is unable to do do the job.

If the 25th was invoked, then Trump’s term would expire before the 21 days is up.

Personally I don’t think the 25th amendment should be used, unless Trump tries to do something like declare martial law. It is not designed to remove a bad President from office (impeachment is for that). It is designed to allow an Acting President if the President is unconscious or has had some sort of breakdown that they can’t function.

Wayne Brown writes:

Do we really care about the Spratly Islands? Do we really need to make a fuss over Uighur rights in China when we don’t do the same over US Police shooting black citizens?

Trade sanctions of the type Australia is facing are a weapon used by both USA and China.

So let’s have a debate on whether we need Five Eyes, or whether it’s time for us to trade on independently.

Brown reminds me of the “useful idiots” who used to defend the USSR by claiming it was no worse than the US and Nato etc.

Comparing the treatment of Uighurs to US police shootings of black citizens is not an argument I believe can be made in good faith. It is offensive and ridiculous.

There have been 192 blacks shot by Police in the US (and 370 whites and 12 hispanics). Of the 192 certainly some of them have been unjustified and the protests against them have (in my opinion) been justified.

That can not be compared to the treatment of Uighurs with an estimated one million sent to mass detention re-education camps. To compare the actions of the occasional rogue police officer with official Government policy to detain one million people who have committed no crimes, leaving 500,000 children without parents and force into state boarding schools.

The Herald reports:

A man who attacked a police officer with an axe said he planned to decapitate him and wave his head at other officers so they would shoot him.

It was one of the stunning revelations made by 25-year-old Ruairi Kern Taylor in an interview with a Corrections officer just weeks after the incident in September 2019.

The details of that discussion can now be revealed after the defendant was jailed for three years, three months before the High Court at Dunedin last month.

He got a mere 39 months for this. He could be eligible for parole after just 13 months.

“I’ve been planning to kill someone for three to four months before I did it,” he said.

“This was the first police officer I came across that was a good target.”

Doyle-Franklin, who gave evidence at a hearing in the High Court at Dunedin in July last year, attempted to have her interviewee rationalise his actions.

Why would he kill someone who had never wronged him?

“Because that’s something I could do that sits right for me … that just works for me,” Taylor said.

Doyle-Franklin said his manner was unnerving.

“His facial expression would get very animated — smirking and smiling — his eyes were really wide. It was quite clear from that he was getting enjoyment from retelling his offending,” she said.

Sounds like he’ll be safe to release!

Despite his ruling, shortly afterwards the Crown dropped the charge of attempted murder.

Taylor pleaded guilty to attempting to cause grievous bodily harm, intentional damage and assault with a weapon.

Because of the time he spent in custody awaiting resolution of the case, he will see the Parole Board this month.

Why did they drop the charge? His admission was admissible. A conviction would have been easy.

Stuff reports:

A hospitality business owner says the Government is sending mixed signals after ignoring advice about delaying the minimum wage increase and recommendations for a smaller rise after Covid-19.

The minimum wage report by the Ministry of Business, Innovation and Employment (MBIE) published in December 2020 advised delaying the increase until October, and by 25 cents, or 1.3 per cent, due to the economic uncertainty.

However, the Government ignored this advice and confirmed the minimum wage would rise by $1.10, or 5.8 per cent, to $20 an hour from April 2021, sticking to its election promise.

Auckland cafe owner Chris Monaghan said 2020 was a tough year for every hospitality business, and the 5.8 per cent increased wages would add greater pressure on the sector.

Businesses can handle increased wage costs when they have increasing revenue. But when they have declining revenue, increasing wage costs will send many under.

Alone in his office, Trump has failed. Despite everything he threw at it, the US system was resilient enough to stop his coup and the Congress of the United States has just this minute certified Joe Biden as the President-Elect and Kamala Harris as the Vice-President Elect.

The objection to Arizona was defeated 93-6 in the Senate and 303-121 in the House. The objection to Pennsylvania was defeated 92-7 in the Senate and 282-138 in the House.

He has less than 14 days left in office at which point he will lose his immunity for prosecution and the indictments will start to form up.

For those not following, pro Trump forces have broken through multiple lines of Police to storm the Capitol, disrupting the election certification.

Both the House and Senate have gone into recess and VP Pence has been taken to a secure location.

What an image. A terrible day for the US and democracy.

If a former Republican President is calling it an insurrection, then we can conclude this is not just a protest.

And a Republican Governor is calling for Trump to be removed from office.

Also in other news the GOP has lost the Senate with the Democrats having won both seats in Georgia.

Golriz Ghahraman tweeted this fake headline which is a modern version of the old Jewish blood libel.

It implies Israel is excluding the vaccine from Palestinians. It is a vicious lie designed to smear the Jewish state.

Here’s the facts:

1. The Oslo Accords (Article VI, 2) between the Palestinian Authority and Israel stipulate that the Palestinian Authority is responsible for healthcare, including vaccinations, for Palestinians in their territory.
2. The Palestinian Authority has not asked for help from Israel
3. Israel last year held training courses for medical teams and lab technicians in Palestine and donated coronavirus testing kits
4. The Palestinian Authority has chosen to secure four million Russian-made vaccines against COVID-19 which they are expecting in February
5. Israel has vaccinated Palestinians who reside in East Jerusalem in line with the Oslo Accords
6. Israel’s vaccine operation has run in predominately Arab areas in Israel
7. The Israeli PM recently visited two Arab cities (in Israel) to encourage more vaccination

The tweet was an offensive smear. But I doubt there will be an apology.

With almost 80% of ballots counted, the NY Times is projecting the two Senate seats to go to the Democrats by 1.8% and 1.0%. They note:

Republicans have taken a narrow lead in the tabulated vote, but the Democrats are clear favorites in both races. The overwhelming majority of remaining votes are in the Atlanta metro area, and while the race remains competitive, there’s no indication that the Republicans are poised to outperform expectations. The big Democratic vote left: the DeKalb County early vote. We expect these 170,000 votes to break for Ossoff by an 85-15 margin.

So the outcome is not certain, but things look good for the Democrats. If the GOP loses both seats, it will be due to Trump so his parting gift will be giving the Democrats control of the Senate as well as the House and the Presidency.

538 point out:

Best I can tell, Perdue and Loeffler are running slightly behind Trump in margin. We’re up to 107 counties that have reported 95 percent or more of their expected vote, and if you total up the votes in those places, Trump won them by 25.7 points in November. But Perdue is only up 25.3 points in those places and Loeffler is up 24.8 points. Plenty of votes left to count, but that’s not what the GOP wants, especially as many of these are Republican-leaning places.

The two Republicans did better than Trump in the first round but Trump’s refusal to concede appears to have motivated the Democrats to turn out more than Republicans.

Still far from over yet, so we’ll see how it goes over the next 24 hours.