Monday, 9 November 2020

Free Press, 9 November 2020


Founding Fathers 45, Tyrants 0

Another person has held the highest office in the US without becoming a tyrant. It’s an extraordinary record. Trump thought himself bigger than the system, but the Founding Fathers broke him. America’s founders knew English and French kings, so they sought to make laws nobody could rise above.

The New President

Biden and his party would like to increase the size and scope of the American state. There’s a lot about him to oppose, but it’s better to be opposed within a framework of the rule of law and democracy. Even if you agree with Trump’s tweets, you have to ask: what is the end game of democracy in 280 character missiles?

The US Re-Engages

A world without America is a very scary place for a small democracy. We believe the Biden election is a geopolitical positive for New Zealand. Free Press recommends Biden in his own words: “The most effective way to meet that challenge is to build a united front of US allies and partners to confront China’s abusive behaviours and human rights violations, even as we seek to cooperate with Beijing on issues where our interests converge.”

Back To The Future

If there has to be a world police officer, it might as well be a democratic one, but will Biden be a more effective sheriff than Bush, Clinton and Obama? Second, the US is hasn’t been the home of free enterprise for a long time. New Zealand regularly outranks the US for adopting free market policies. Biden must avoid the return of a sclerotic economy with an over-extended empire.

The Other Big Winner

Some people think Labour won our election. They just got the most votes. Winning means getting your policies implemented. The clear winner of the 2020 election in New Zealand is therefore Social Credit. Each announcement by Adrian Orr, the Reserve Bank Governor, is more otherworldly than the last.

Sound Money

It’s been a while since monetary policy was politically sexy. Adrian Orr could change all that. The Bank is apparently a Kauri tree, the God of the financial forest. Now the Bank has a job fighting climate change. There is no plausible way that monetary policy can affect the climate (we suppose hyperinflation helped destroy the Venezuelan oil industry), but that hasn’t stopped Orr.

$100 Billion

Most of Orr’s antics are just amusing or tiresome, depending on your mood. His decision to print $100 billion puts New Zealand at the forefront of Covid-19 money-printing. His entrepreneurial approach to new ways of creating New Zealand dollars, such as Funding for Lending, following on from Large Scale Asset Purchases, is frankly terrifying. We face a massively inflated housing market and what amounts to enormous redistribution from workers to owners of capital.

Under Which Government?

A Labour Government has seen the largest redistribution of wealth from workers to owners in the history of our country. Property owners and shareholders are busy salting Orr’s wash of cash into the walls of their homes and bottom lines of their portfolios while the working class can only look on. Social Credit won the election, the poor lost. Labour probably doesn’t know what’s going on.

What’s The Answer?

Free Press predicts that monetary policy will become a major issue in this term of Parliament. Without sound money, you cannot plan your future. When the future does unfold, it’s arbitrary and unfair. Political unrest, populism, and instability follow. Maybe not like the 1930s, but it doesn’t need to be that bad.

ACT Leads The Debate

As David Seymour is reported saying in an article titled ‘Judith Collins flirts with ACT's Reserve Bank house price policy’: “At present the Reserve Bank is focused on keeping the price of frozen chickens, haircuts and petrol stable, they even consider the price of cigarettes, but they don’t consider stable prices for assets.” Indeed.