Cunliffe: Neither good nor effective

 

The theme building around David Cunliffe’s departure is that he was a disaster as a leader, unpopular with caucus and colleagues, a fake and a phony – all true – but despite that, say the eulogists, he was still a brilliant man who did wonders for telecommunications*.

Bullshit.

His knowledge of history, economics and much else was bunk. (See here, here, here, and here for instances.) And it was always his set-piece speeches that bore the least connection to either reality or humility. (Here, here and here.)

And what he did to telecommunications and property rights was disastrous. (Q: How do you get a nice small business?  A: Take a large one, and make Obergruppenfuhrer Cunliffe the minister in charge.). What he did was neither brilliant nor remarkable; it was simply dismemberment of NZ’s largest company. And after distributing its parts and services to vultures like Annette Presley, rather than the dismemberment encouraging the investment in high-speed telecommunications he’d promised, instead we saw a slow-speed govt takeover. Because as I said over and over and over again at the time, "No one but an idiot or a cabinet minister would expect to see businessmen or women making a long-term investment in infrastructure when theft of such an investment is imminent, or the breakup of that investment is on the cards." And so they didn’t.

He did not “do wonders” at all. He created disasters. He was the sort of fellow who when fact checking his sentences you’d begin to doubt even the words “and” and “the” – and who after shaking his hand you’d check to make sure all your fingers were still there.

The fact the only people he ever managed to sell himself to were geeks who hated Telecom and the trade unionists who elected him to leader tells you everything about how gullible they both are. Good and effective? Only at flushing out wankers who rate him.

---

* Rob Hosking at NBR for example: “One of Helen Clark’s more effective ministers during the last Labour government and his role in regulatory reform of telecommunications should not be forgotten. He did a good job there.” Vernon Small at Stuff: “But he could also be a highly effective minister, and never so much as when he was busting Telecom’s local network monopoly or taking a hard line with DHBs.” And National’s pollster David Farrar, who understands how much Silent T did to make National’s last victory possible: “He was also a very good Comms and ICT Minister in the Clark Government… Always enjoyed working with him when he was a Minister…”

These men and others like them all need to look in the mirror and examine what they find there.

.

Cunliffe v Key: Two sides of a Muldoon

In his first day in the House yesterday, in the only chance he will have in four weeks to demonstrate he has what it takes to back up his windy rhetoric about “having John Key’s number” and showing the PM with his pants around his ankles, David Cunliffe did at least choose a real target on his first chance to defenestrate his opponent, which is John Key’s prevalence when “supporting business” to take that line too literally by supporting the shareholders of particular businesses.

No customers please, we’re Telecom

Telecom were once the country’s largest company. They’ve been nobbled several times by big government, but their slow slide has also been due to manifest incompetence.

Take the way they’ve chosen to end their CDMA Network—a directive to 600,000 subscribers that as of tomorrow their expensive phones will no longer work, so get on and sign up for a new plan on their XT network.

Why would you stick with a company that treated you like that?

It’s not the first time. They’ve done it before. It’s an exact parallel to their decision a decade ago to end their 025 network—handled exactly the same, and then as now a direct invitation for all those customers to stampede (as I did) towards Telecom’s competitors. 

Who, naturally, are waiting with open arms.

Sometimes, you have to wonder whether there’s a brain upstairs at Telecom at all.  Or any interest in looking after their customers.

Stephen Fry, Steven Joyce and Government broadband

He loves gadgets and he’s tweeted from many places around the world, but Stephen Fry was less than satisfied with government broadband here in EnZed. And he reckons we EnZedders should rise up and take on those responsible.

“You wouldn't put up with potholes in your roads,” he says, though we do, don’t we, “so you shouldn't have to put up with Third World broadband standards as well.”

But we do, don’t we.  We not only put up with it, you vote for it.

So who’s responsible for the potholes in local broadband? Well, it’s fashionable to blame the private telcos, of course.  But consider that around six years ago, right when those private telcos were considering plans to roll out the next generation of broadband across the country, Labour’s David Cunliffe began dismembering Telecom—to the loud applause of  Labour hacks, National stalwarts and Telecom’s competitors—and announcing plans to “roll out” government fibre.

Would-be private investors in next-generation broadband began quietly reconsidering their own investment plans. Why put your own head in the noose when you could reap the benefit of a taxpayer “investment.”

Then around four years ago in a throwback to its Think-Big Muldoonist past the incoming National government began announcing that it would be they who would be “rolling out” the next generation of high-speed, bells-and-whistles broadband, the “roll out” of which would be a flagship policy of their first term.

Potential users and rival telcos alike waited with bated breath while nothing continued to happen. And now that the former promoter of National’s next generation of high-speed, bells-and-whistles broadband Steven Joyce has moved on to bigger, better and brassier things, the non-roll out has been left to first-time minister Amy Adams—who instead of being photographed in front of new high-tech equipment sits in her new office writing press releases boasting :

The Government has set aside $1.5 billion for ultra-fast broadband, and aims to have the service reaching 75 percent of New Zealand in the next 3 5 7 10 years… contracts had been locked in, the rollout was under way, and competitive wholesale prices had been secured, but it was up to the industry to ensure New Zealanders got the quality and performance they expected at prices they could afford…

Or in other words, “we’ve spent lots of your money already with only paper promises and electioneering hype to show for it. But stop whining, because you’ll get it when you get it.”

At least she recognises, if only partially, that government itself delivers nothing. That in the end it is still “up to the industry.” But perhaps she and other EnZedders might reflect that the industry might have done better and much earlier—that big private investment might have been directed into this area much sooner—if big government hadn’t been flexing its muscles for the last six years in the hope of  a political windfall.

After all, it looks like up to $33 billion could be the real return to NZ from the investment, if it ever comes to pass, some of which would have rubbed off on private investors. But when any private investment would have been drowned out by government and (no doubt) damned by luddite nationalists in every party, and when NZ’s largest telecommunications company is being dismembered and partially nationalised as a reward for owning and having rolled out the last national network, it’s no wonder no private investor wanted to take the risk.

As a blogger who’s now left the building once said:

If telecommunications companies think someone is going to steal their networks,they won't build any more of them! It's really simple. Now we are stuck with waiting for the government to waste my tax money building something that every private interest is now too scared to.

Former Telstra Australia head Sol Trujillo said much the same when similar threats were directed his way from the Australian government. He:

derided Kevin Rudd's election-promised "partnership" to build an across-Australian broadband network, calling it a "kumbaya, holding hands" theory. It might have been an election promise, but looks like no- one stopped to ask the company supposedly being partnered. Said Trujillo: "We are only going to participate in the things that we own and control."
    Mr Trujillo, firmly backed by chairman Donald McGauchie, said Telstra was happy to invest $4 billion or more of its own money rather than the taxpayers' - but only on its terms and pricing…
Australia needs a fast, modern telecoms infrastructure [says Trujillo]. And the quickest way to get there is to allow unfettered competition. Mr Trujillo says that America and Europe learned long ago that “to foster competition the government cannot control the levers, it must let the market work. Virtually every other country has moved towards less regulation in telecoms” …
    Worried that giving rivals a free ride would undermine his profits, Mr Trujillo is threatening not to lay the fibre: “My duty is to our shareholders—including 1.6m ordinary Australians. I will only invest where I can earn an economic return.”

So when private investors aren’t able to earn a return? Or they are (falsely) led to believe they can be given an unearned free ride on someone else’s network? Then you end up where you are today. As our late friend Anna Woolf said back in 2008: Remove the Red Tape, the Fibre Optics will follow. Or don’t, and it won’t.

So when you’re complaining about your broadband service today, it’s government broadband you’re complaining about.

Potholes and all.

NOT PC’s patented, principled voting guide

So Liberty Scott has posted his own voting guide for tomorrow—who to vote for in which electorate, and why—and I promised I’d do something similar.

So here goes.

First of all, remember that in ninety-nine percent of electorates the sitting MP and one of other buggers is already going to parliament whatever you and every other voter does to throw them out, which means the only vote that really matters as fare as the make-up of parliament is concerned is the party vote.

Which means your electorate vote is your “protest vote.” The vote that tells your MPs what you’re really thinking.

I’ve based my choices unswervingly on two rock-solid principles: either that a candidate advances or is at least sympathetic to freedom, OR that I know them, and they’re not a complete arsehole.

And since the marginal value of votes for smaller parties are higher than votes for larger, I’ve tended to favour those.

There is one basic difference between my choices and Scott’s. He wants to offer you a vote in every electorate. I don’t. My basic default position is that, unless there’s a good reason to do otherwise, you should stay home.

If however you insist on voting, then I suggest your default position should be voting Libertarianz in your party vote (since a vote for any other party is a vote for more government, not less), and leaving your electorate vote blank—unless, that is, you are in one of the electorates mentioned below:

Auckland Central – David Seymour – ACT
The ‘Battle of the Babes’ is as vacuous as they are. One’s a powerluster, and the other is dimwitted. Seymour is a good bloke in a party with too few of them. Give him your vote.

Botany – leave your ballot blank
Scott reckons National’s Jami-Lee Ross deserves your tick because he quoted Thatcher and Reagan in his maiden speech. He quote Maggie saying “the problem with socialism is that eventually you run out of other people’s money to spend.”  The problem with Mr Ross however is that he’d done nothing all his own life but spend other people’s money, and then vote for more of the same. Fuck him.

Christchurch/Ilam/Port Hills/Waimakariri/Selwyn etc – vote against the Czars
A vote for any National candidate in Christchurch is unconscionable. What the earthquake didn’t destroy, they have. And will do. Do not under any circumstances give them your vote. Punish them for punishing the city’s businessmen and women, and for ensuring home-owners are left without options. Vote for anyone, anyone at all, just as long as it’s not one of the Blue pricks. Even Lianne Dalziel.

Clutha Southland – Don Nicolson – ACT
If you vote for Sir Double Dipton, Lord English of Karori, then you need your head read. Don is a good bloke who wants the ETS abandoned. Give him your vote.

Coromandel – Hugh Kininmonth– Labour
National’s replacement for stroppy local Sandra Goudie is carpet-bagger Scott Simpson. Scott’s a family friend, but frankly he’s too wet for Coromandel—a seat that Goudie turned from marginal into a safe blue seat. Friends tell me Kininmonth is a good bloke in the wrong party—and enough votes for decent Labour electorate candidates like him might displace some of their worse ones who hope to get in on the list. So vote Kininmonth.

Epsom …
If there’s one electorate that tells you how pathetic MMP is it’s Epsom—where a vote for the National candidate will help Labour, and a vote for the “Liberal Party” candidate will get you a conservative.
I can tell you right now what I will not be doing in Epsom. I will not be lifting a finger to help the Minister of Rhyming Slang back into parliament. Not even a pencil. This is a man I wouldn’t piss on if he was on fire.
So for the first time in my life I’ll be giving my vote to a National candidate. To Paul Goldsmith. If, that is, I can bring myself to do that. And if you can. (If you can’t, then abstain.)
Because a man who talks fiscal responsibility when he was the biggest spending mayor in the country doesn’t deserve your support. He deserves a kick in the arse. Because a man who talks reform yet as MP opposed everything Ruth Richardson did deserves not a tick but a kick. Because a man who tells his own leader to go to hell when his leader, Don Brash, advocated applying their party’s principle to marijuana doesn’t deserve your vote. He deserves a belt in the face. Give it to him. Metaphorically, anyway. (And those who say you have to vote for this slime in order to get other ACT MPs into parliament, I say “fuck ‘em".” I say they should have thought of that when they picked this piece of shit to run in their anchor seat.  A vote for Banks is a vote for Banks—a vote to give him control of any caucus ACT might possibly be able to muster. If that’s not enough to make your skin crawl, then you’re not alive. And you and I have nothing to talk about.)

Hamilton East – Garry Mallett – ACT
Unlike Banks, Gary is for smaller government and (somewhat) more freedom. And he’s a good bloke. So by all means pin your picture of Labour’s Sehai Orgad up on your bedroom wall, but give your vote to Gary.

Hamilton West - Tim Wikiriwhi – Independent
The Blue Team’s candidate is an unremarkable “Blue Green”; the Reds have the unenlightened Sue Moron. And why would you vote for them anyway when you can vote Wikiriwhi—a man who eats, sleeps, breathes and writes about freedom and liberty. If only he could spell. But vote for him nonetheless.

Invercargill - Shane Pleasance – Libertarianz
Shane is Libertarianz’ president, Director of the Southland Chamber of Commerce and he believes in Invercargill, freedom and personal responsibility.  He definitely deserves it. (And yes, I did pinch that write-up from his blog. But it’s still true.)

Kaikoura – Ian Hayes - Libertarianz
Ian Hayes has them rolling in the aisles at public meetings. In a good way. So give him your vote in this safe National seat.

Mana - Richard Goode – Aotearoa Legalise Cannabis Party
Richard has swapped membership in a party promoting freedom in all things to one promoting freedom in one only. Nonetheless he’s not the Forrest Gump of Mana, Kris Faafoi. Nor is he professional Maori and token woman Hekia Parata. And he was responsible for setting up this blog for me, way back in 2005. So in return, give him your vote.

Mangere – Claudette Hauiti – National
Claudette is a lovely woman without a chance in a wall-to-wall Red seat. So help out a woman who does talk about less government and more personal responsibility by giving her your tick.

Manurewa – David Peterson – ACT
David is a libertarian and an advocate of Austrian economics—and he still needs to return one of my books.  So help me get it back, if you please, by giving him your vote, then asking him to return it. If you’d be so kind. Because he is a decent fellow, which can’t be said about his opponents—a career bureaucrat, and another Wet Blue Green. Vote Peterson.

Maungakiekie - Peseta Sam Lotu-Iiga – National
Vote Sam just to piss off Carol Beaumont, the Marxist who believes the seat is hers by right.

Nelson - Maryan Street – Labour
Maryan Street is hardly the worst Labour candidate to stand on a husting. And she has one unique qualification: she is not Nick Smith. There is neither time nor space here to recount the reasons this mad moron, this Minister of the RMA and the ETS, of the Kyoto Treaty and of forced training for ECE teachers, deserves to be given the white pill. And I don’t mean aspirin. Vote Street. And if you see Smith out and about, punch him for me. In the face. Hard.

New Lynn - Tim Groser – National
Speaking of a punch in the face, there is one other character in the current parliament who competes with Smith for the title of most deserving. Do anything you have to, anything you can, to punish the wrecker of Telecom.  Even voting Groser.

North Shore – Michael Murphy – Libertarianz
No, don’t vote Brash. As the man who hand-picked Banks, and who is therefore single-handedly responsible for the demise of his own bid to keep National honest (which bid he has now conceded is over by agreeing to be John Key’s compliant lapdog should ACT get over the line), Brash sadly doesn’t deserve a tick. He deserves a lesson in principle.
So vote for Libz stalwart Michael Murphy, someone who could give it to him.

Northcote - Peter Linton – Libertarianz
Peter is an untiring advocate for your right to self-defence. Give him the biggest and loudest tick you can muster. And then leave the polling booth happy.

Northland – Lynette Stewart – Labour
National’s Mike Sabin is obsessed with prohibition, with ramping up the War on Drugs, with criminalising victimless crimes, and is unconcerned with what this will demonstrably do to gang profits (raise them) and to peaceful people (criminalise them).
So vote for anyone instead of this egregious busybody because at 60 on National’s list he needs your vote to get in. Vote for anyone to stop Sabin, even Lynette Stewart. Tell National the time for prohibition is over.

Ohariu – Sean Fitzpatrick – Libertarianz
Ohariu, parliament and the country’s hairdressers need to see the back of Peter Dunne.  But that doesn’t mean we need to see the front of Charles Chauvel. Tell them both to go to hell and vote for the bloke who runs the most successful martial arts academy in Wellington.  And then invite him to take a trip to Nelson…

Otaki - Peter McCaffrey – ACT
Nathan Guy is like fog, wet and thick. Labour’s Peter Foster is like dross, useless and nondescript. But McCaffrey is another good young man in the wrong party, a chap who led a principled and eventually successful campaign against compulsory student unionism. Give him a big tick.

Pakuranga – Chris Simmons – ACT
National’s Maurice Williamson took the leaky home issue and as minister proceeded to make it worse by using it as an excuse to corral builders, designers, Tom Cobley and all into what amounts to compulsory state unions. Tell him to go to hell. If voting Simmons can do that (and there’s precious few other choices on offer) then do it, I say.

Tamaki – Stephen Berry -  Independent
Berry is funny, energetic, a principled advocate for freedom,  and he’s really stepped up in his campaign for this electorate. None of which you can say for National’s Simon O’Connor. Give Berry the big tick. He deserves it.

Tamaki-Makaurau - Pita Sharples - Maori Party
Even the Labour Party don’t deserve Shane Jones—and if voting Sharples keeps out the Minister for Self Abuse, then it’s worth keeping the racist seats for another term, until the Maori Part fold in the next one. So vote against Jones by voting Sharples. If you must.

Te Atatu – Phil Twyford – Labour
Tau Henare is a bloke who discovered at middle age that life in parliament is a comfortable berth. Phil Twyford is the bloke who ran a principled campaign against Rodney’s super—shitty Super City. On balance then, there’s no contest. Tell tau to get a real job, and make Twitter safe for decent people again.

Te Tai Tokerau – Kelvin Davis – Labour
Davis is sane. Hone is the opposite. ‘Nuff said, really.

Waiariki – Te Ururoa Flavell – Maori Party
Flavell has surprised me often by saying good things on property rights and the economy. Yes, it’s true. Reward him with your favour.

Wairarapa - Richard McGrath – Libertarianz
Let me just quote Liberty Scott on this one:  “Vote for NZ’s most freedom loving GP – Dr Richard McGrath for Libertarianz. He’s a fine man, and has a good profile in the electorate.  You don’t need to think twice about this.   National’s John Hayes will probably win given his comfortable majority of around 6,700, but I strongly endorse McGrath politically and personally as the one candidate of all I most would like to see elected, across the country.  He would shake up healthcare, the war on drugs and would always take a balanced and measured approach, that adds up to whether any government measure reduces freedom and individual rights or increases it.  Vote McGrath with pride.”
And vote secure in the knowledge that he trounced all the other candidates in the district quiz.

Waitakere – Peter Osborne – Libertarianz
Minister for Expanding the Welfare Rolls Paula Bennett is battling the Repulsion Camel, Carmel Sepuloni out west. Declare a plague on both their houses by voting for a bloke who knows that welfare doesn’t help those it pays for. It destroys them. Both Bennett and the Camel will be in regardless anyway, so vote for the good bloke. Vote Osborne.

Wellington Central – Reagan Cutting – Libertarianz
In this electorate you can vote for state-worshipper (Grant Robertson), state-worshipper lite (Foster-Bell), libertarian lite (Whittington) or the real thing. Accept no imitations. Vote Cutting. Do it for the Gipper.

Whangarei - Helen Hughes – Libertarianz 
As Helen told her local newspaper, “A man cannot be freed till he knows he is in bondage.'' If you do, then a vorte for Helen Hughes is your only option.
And  as  the newspaper profile demonstrates, not only is Helen Hughes more colourful, more principled and more effervescent than the wet, limp, virtually lame Phil (I’ve Done Nothing in 3 Years But Buy A Bottle Of Wine) Heatley, she is a better sculptor too. So reward her and punish him. Tell the man who’s helped make affordable housing even more of a pipe dream to go to hell. Vote Hughes.

So there you have it. A few different recommendations than Scott’s, but only a few. I make it a recommendation for

6 ACT candidates, 9 Libz, at least half-a-dozen Labour, 2 from the Racist Party, 2 Independents and 1 ALCP type. But then I can’t count for custard.

Enjoy your voting tomorrow. At least it means this turgid campaign is finally over.

And that at least is something to celebrate.

And who knows, if we’re lucky we might get a few weeks without a government.

Wouldn’t that be nice.

DOWN TO THE DOCTOR’S: Tall-poppy Telecom slashed by government weed-eater

Libertarianz leader Dr Richard McGrath invites you down to his clinic for an inoculation against this week’s stories and headlines on issues affecting our freedom.
This week: The ongoing public dismembering of what was once NZ’s largest company.

• NZ HERALD: “Telecom faces $12m penalty for high prices” – Telecom has been hit with a $12 million penalty - the highest in New Zealand history- for breaching the Commerce Act…

THE DOCTOR SAYS: In other words, Telecom is whacked wit the largest fine in NZ history for acting in commercial self-defence—breaching an act that is commercially, and morally, corrupt.
    At least the Herald reported correctly that Telecom had a “dominant market position” rather than the often misused term “monopoly” - the latter situation applies only where a government uses its coercive power to protect a business from competition.
     However the High Court has, in my humble opinion as a Telecom customer, got this one wrong. Drastically, savagely and unjustifiably wrong.
    After being forced to give competitors access to its network—in effect being punished for the size of its assets—Telecom acted to protect its market share by charging its rivals an appropriately high fee for the use of its facilities.
    The High Court however, steped in abject ignorance about even basic economics, ruled that Telecom had charged “disproportionately” high prices—ignorant of the lesson demonstrated by central planners over centuries that the “right price” is nothing more than the price people are willing to pay. In this case, Telecom’s competitors paid the high fees, preferring to do so rather than not make use of its network system. In any case, because of government interference in the telecommunications sector and a mission from Minister Cunliffe on to dismember NZ’s biggest company, Telecom has always been on a hiding to nothing.
    So if ever you find yourself about to flatulently opine that businesses run governments, just think of the case of Telecom—where at present the score is around 15-o in the government’s favour.

We assemble parliaments and councils, to have the benefit of their collected wisdom; but we necessarily have, at the same time, the inconvenience of their collected assions, prejudices, and private interests.  By the help of these, artful men overpower their wisdom, and dupe its possessors; and if we may judge by the acts, arrets, and edicts, all the world over, for regulating commerce, an assembly of great men is the greatest fool upon earth.
- Benjamin Franklin

QUOTE OF THE DAY: Politics as self-defence

We are often implored ‘not to be political’ when we approach policy subjects that affect our lives and livelihoods.
Particularly business people are often requested to ’stay out of politics.’
This would be a reasonable request if, ‘politics would stay out of business.’”
                            - Ron Manners, “Should We All Become Political”

Someone should have sent that quote to Therese Gattung when she was pretending to herself that David Cunliffe wouldn’t molest her company if she just played nice.  (Q: How do you get a nice small business?  A: Take a large one, and make David Cunliffe the minister in charge.)

The take-home message here: If appeasement of the looters didn’t work for NZ’s (formerly) largest company, it sure as hell ain’t gonna work for you.

High-speed broadband clusterf**k coming right up

While Australians are starting to realise they’re going to pay dearly for their government-run national broadband network, some New Zealanders are starting to question whether or not we even need ultra-fast broadband—particularly if it comes with a government label—and especially since New Zealanders are already world leaders in stealing films over their existing connections.  Something some of us have pointed out before.

These are the sort of people who were (and still are) cheering Obergruppenfuhrer Cunliffe’s break-up of Telecom in the hope it might make it easier to steal more movies and TV shows more quickly—cheering the vandalism of Telecom’s private property here while Telstra’s former CEO Sol Trujillo over there gave the spineless Therese Gattung a lesson in how to tell a thieving government to go to hell.

Trujillo was one chap who knew long ago that the government’s interest in high-speed broadband would only impede private investment in it; and having the government involved at all would only be a clusterfuck. As it has been both there and over here. The question, really, boils down to a simple value judgement:

“”The question is not whether there are, or might one day be, cool things that you can only do with 100mbps broadband.
    “The question is whether enough of us are prepared to pay what it would cost to make that available down every suburban street.”

And if we’re not prepared to pay that cost upfront to a private company--and clearly most New Zealanders aren’t, or they would have—then why pretend to ourselves we won’t be paying through the nose when (having delayed private investment in those places where it might be economic) the government starts doing it themselves.  Or trying to.

Like they’re been trying to, and failing to, in Australia.

Get over it [updated]

Is it just me, or does all the jubilant Telecom-bashing this week look like just another chance to bash a big business. 

After all, Telecom were hardly the only ones this week to have outages.  There were two that I know of:

• Vodafone’s email server was out for much of Monday morning, meaning no Vodafone customers could send or receive emails—yet while bitching about Telecom filled the news wires I didn’t hear a peep about that.
• And Orcon’s internet service was out for a good part of yesterday– and once again, not a word about this from any of the news services so excitedly bashing the big boy.

Bear in mind that these are just the outages that I know about—I’m sure there’d be many more to report—yet neither these nor any other problems attracted national attention, headlines, or press conferences with apologetic CEOs using carefully chosen words of apology. (Which is a pity, because I let loose a few carefully chosen words myself at both services during both outages that would have looked really good in their apologies.  Well, maybe not.)

No, only Telecom gets picked on.  It’s almost as if it’s personal.

UPDATE: Great comment below from Matt, who suggests you get some perspective:

    “From memory around 100 people a year needlessly die in NZ hospitals. So perhaps 2 died this week because somebody put the wrong drug in the drip. Rather more serious, one would have thought, that a phone network going down.”

And a blogger waits

While the Key Government promises a nearly country-wide, $1.5 billion broadband experiment of fibre to the home, a blogger waits.

A grown adult, a married man, a blogger who just wants to run his business and do what people do online. I give you Blair Mulholland, who -- while Steven Joyce promises the earth and a whole new bureaucracy this morning (unless you live on the West Coast) -- is reduced to blogging from his Mother's computer, and from the free ones at the Whangaparaoa Library because, because . . . well, let Blair tell you:

If telecommunications companies think someone is going to steal their networks,
they won't build any more of them! It's really simple. Now we are stuck with
waiting for the government to waste my tax money building something that every
private interest is now too scared to.

Remember when the government effectively nationalised Telecom's network and you all cheered? You're paying for that now with reduced property rights protection and decreased service, just as you'll be paying for National's promises with money that could have been spent on tax cuts.

Happy?

Making us poorer

Does anyone else find it ironic that in the same month that John Key has pledged to borrow $1.5 billion to install broadband in their homes (that's a cost of about $2000 per home, the cost to be borne by the taxpayers who live in those homes), the government has told Canadian investors who wanted to voluntarily give shareholders a similar amount that they won't be allowed to?

In other words, Key wants to take $1.5 billion out of capital markets to build a network that in the current regulatory environment is going to lose money (and if it weren't going to lose money, private investors would already be doing it), while shareholders and those capital markets from which those funds will be taken have just been denuded by a similar amount because of government regulation.

In other words -- and given that greater productivity comes about from ever greater application of capital to the job of producing wealth -- government regulation is making us poorer twice over.

UPDATE: Just to restate the point: 

The more capital invested, the better equipped are our places of work;  the better equipped a plant is, the more the individual worker can produce within a unit of time; and the more the individual worker can produce within a unit of time, the higher is what the economists call the marginal productivity of his labor and, thereby, the higher real wages he gets. [ref Mises: 'Wage Earners & Employers']

Or to restate the point in even simpler terms: The more capital a country invests productively, the higher are the real wages in that country. If you want higher real wages, then you need more and more capital invested productively, not consumed destructively.

And since these two measures between them take around $3 billion directly out of NZ's capital markets, and indirectly suggest to offshore investors that their money is unwelcome here and their investments are insecure, I'll leave it as an exercise for the reader to suggest what effect this has on real wages.

Broadband, by order!

New Zealanders need broadband, you say?  Okay, then if they need it as desperately as you say, why don't they seem prepared (as things stand presently) to pay voluntarily for the investment necessary?  Why does one of the two major parties think we need to be forced to pay for nationalised broadband, withdrawing more than $1.5 billion of investment capital from those New Zealanders who voluntarily choose their own investments based on reasonable return, and transferring it to a project that in the present environment is only apparently a goer as long as government force lies behind it.

Do you think perhaps there's a good reason, or several reasons, that New Zealanders haven't paid voluntarily for the sort of broadband that's now being talked about?

The fact is that the alleged need New Zealanders have for broadband -- a need that National says is worth spending taxpayers money at the rate of $2000 per household -- is only a problem from the standpoint of central planning, which necessarily views human beings as a collective incapable of direction, and which finds it simply unfathomable that individuals are capable of understanding and acting in their own best interests.

But this is quite wrong.  In actual fact, if government meddling and government restrictions were removed, then individuals are quite capable themselves of voluntarily redirecting their efforts and their investment capital to filling this alleged need, or any real need.  The fact is that if $1.5 billion of spending were to truly attract a benefit of $4.5 billion (and this figure that's been bandied around isn't just guesswork), then this is $4.5 billion of benefit to specific individuals.  Why wouldn't they be prepared to stump up voluntarily if their risk was minimised by the removal of the various restrictions on doing so?  Or as Annie Fox puts it in itemising the particular restrictions that need to go, "Remove the Red Tape, the Fibre Optics will follow."

Restricting investment and then using government force and taxpayer dollars to pick 'winners' was the leitmotif of an earlier National Government under Muldoon.  Liberty Scott recalls some of the 'winners' that the Muldoon Government picked in its 'Think Big' programme (some of which we're still paying for), muses on the resurrection of this flagship Muldoonist failure, and has eight relevant questions that any supporter of John Boy Thinking Big must be able to answer.

John Key's National Party?  They sure as hell aren't the answer.

UPDATE:  Says Matt Burgess at Anti Dismal:

    This is Think Big 21st century style.
    The objection is not that better broadband is a bad thing. In the 1980s, more electricity was a good thing but Clyde Dam was a disaster. The problem with National's plan is that it's likely to give New Zealanders less broadband at higher cost and lower quality than might otherwise have been achieved, much as Clyde Dam did for electricity.
There are several reasons for this pessimism...

Vultures circling over "fibre future"

State worshipper David Skilling of the NZ Institute proposes the government establish and partially fund a coercive monopoly called FibreCo to "roll out" national broadband and deliver dividends to rent-seeking crony capitalists who participate. "For now, this country's fibre future remained reliant on investment decisions taken by Telecom," says the Institute, which faces "weak incentives" to invest significantly in a fibre access network. The whole panegyric to rent-seeking cronyism is here.

Those "weak incentives" by the way include the continued support for local loop nationalisation from the likes of Skilling and David Farrar and of course Obergruppenfuehrer Cunliffe himself -- not to mention all those competitors of Telecom who wish to take advantage of its networks without any investment themselves -- and of course the dismemberment of Telecom forced upon it by Cunliffe in an effort to boost his ministerial ranking. 

In other words, the faces of those "weak incentives" are themselves and others like them who support the ministerial jackboot being applied to Telecom's private property, and the sort of coercive resnt-seeking proposed by Skilling.

People like Russell Brown, who while continuing to celebrate the ongoing nationalisation of Telecom's existing networks,  regularly celebrates how the faster broadband he's now getting in Pt Chev is already allowing him to steal even more films and TV from the internet.

Good to know why he's so keen on faster broadband, anyway.

Perhaps these luminaries could read and reflect on the comments of Telstra's Sol Trujillo last year when a similar public-private partnership was proposed by Kevin Rudd -- Trujillo called this a "kumbaya, holding hands" theory he wanted no part of;  said Trujillo: "We are only going to participate in the things that we own and control."  And how else could you justify the sizeable investment involved? What incentives are there?

Perhaps too they could reflect on Morgan Tsvangirai's argument for the importance of reinstituting property rights in Zimbabwe and think about the importance of drawing up such a programme for New Zealand, instead of continuing to bang the drum for their destruction.

UPDATE: Paul Walker comments at his blog: "Its not clear to me how a state guaranteed monopoly would speed up anything... Competition gives the best incentives, especially in rapidly changing, innovative markets."  Perfectly correct.  Doesn't stop Rod Drury and, lamentably, Bernard Hickey (who should know better) joining the chorus in praise of the corporatising/nationalising state. "It goes against the grain for me to recommend that a government effectively nationalise a private asset," says Hickey, who doesn't let the splinters slow his slide into the nationalisation chorus.

What does "the public" actually own? (updated)

While nationalisation of children, seabed,  infrastructure and private property is still firmly on the New Zealand agenda -- and always sells well at Grey Lynn cocktail parties -- privatisation is supposedly so frightening for New Zealanders that politicians run from the 'P' word like they do from Owen Glenn when there are cameras around.  Despite failing schools, hospitals and roads (to name but three very public disasters) "public ownership" is still a sacred cow too scary to slaughter.

It makes no sense.

There is no value whatsoever in either the concept or the reality of "public ownership."  The "public" -- you and I -- has no more control over Capital Coast Health or Transpower, for example, than we do over Smith and Caughey or the corner dairy, substantially less in fact. As Madsen Pirie points out,

The public actually has more influence, via its choices and purchasing decisions, on private sector businesses than it can ever have over state industries and services.

If we don't like what the corner dairy or Smith and Caughey are selling, we can stop buying there or even sell off our shares, if we own some.   But if we don't like Transpower's bumbling with the Cook Strait cable or Capital Coast Health killing people then we've got no more control over that than the citizens of Soviet Poland had over "their" shipyards.

The point is that there is no reason at all to favour "public ownership" of infrastructure or businesses -- and in the final analysis, no reason at all to even consider "public ownership" as ownership at all since, as Pirie argues, none of the important attributes or rights of ownership inhere in the "ownership" we supposedly enjoy of our "public assets":

The state sector may have the name of the public filled in on the dotted line, but the public do not own it in any meaningful sense of the word. All of the attributes of ownership, such as control, the right to determine what use is made of it and under what conditions, is determined by the bureaucracy in command of it.

Read Pirie's account of the "public ownership" fallacy here at the Adam Smith Institute blog, and Paul Walker's discussion of his account here.

UPDATE: "It is in the very nature of government management (bureaucracy) that it will be inefficient, and prone to corruption," says today's article at the Mises Daily.  It was Ludwig von Mises in his book Bureaucracy who drew the important distinction between between "bureaucratic management" and "profit management," and who explained why the latter necessarily fails: "In public administration, there is no connection between revenue and expenditure … there is no market price for achievements."  Says John Chapman:

[Mises] explained that neither incentives nor exploitation of useful information are optimal under bureaucratic management, and by definition there could be no rational calculation via profit and loss...

Conversely, after privatization, operations and cost efficiencies improve because once incentives are in place and aligned, and people are empowered and incited (by the lure of profit) to utilize "particular knowledge" of markets, methods, competitive conditions, et al., performance improves.

Much more important even than this loss of "efficiency" is Mises warning of "a byproduct of bureaucratic management": the gradual vanishing of the "critical sense."

When one sees ministers in charge of hospitals that kill and schools that spit out illiterates having no sense of shame at the failure, what we're looking at is exactly what Mises warned about.

BUREAUCRACY by LUDWIG VON MISES Read more about this book...

If Telecom grew a pair ...

Telecom could do with someone in their top seat with the balls of the man in the top seat of Telstra Australia.  While Telecom meekly comply with the diktats of Broadcasting Obergruppenfuehrer Herr von Cunliffe (tugging their forelocks in obeisance to He Who Runs the Show as they scramble to dismember themselves as commanded and  make their network available to all comers) Telstra's Sol Trujillo (left) openly derides Kevin Rudd's election-promised "partnership" to build an across-Australian broadband network, calling it a "kumbaya, holding hands" theory.  It might have been an election promise, but looks like no- one stopped to ask the company supposedly being partnered.  Says Trujillo: "We are only going to participate in the things that we own and control."

Mr Trujillo, firmly backed yesterday by chairman Donald McGauchie, said Telstra was happy to invest $4 billion or more of its own money rather than the taxpayers' - but only on its terms and pricing.

Perhaps it's appropriate that Trujillo was brought up in the country in which the word 'cojones' was invented.

Dismembering Telecom

Yesterday I celebrated the two-week parliamentary lay-off with Mark Twain's words: "No man's life, liberty, or property is safe while the legislature is in session."

I was wrong to celebrate. No man's life, liberty, or property is safe when the legislature isn't in session either.

What I hadn't counted on in my all-too premature celebrations was David Cunliffe's desire to be noticed -- and the gap in the parliamentary programme gives him that -- and the Clark Government's complete disregard for property rights,

He's seen his chance. While Labour-Lite timidly put their toe in the water suggesting, just maybe, that we might -- just possibly -- be allowed to buy shares (but not all of them) in companies that the government has no business owning at all, Labour itself is forging ahead announcing plans to dismember one of New Zealand's biggest private companies.

And Labour-Lite will have nothing to say in defence of that company. Count on it.

UPDATE 1: NBR has some details of this vandalism by government, Telecom being told by the Net Nanny it has "20 days to provide the government with detail about how it will separate into three operating divisions." You can look elsewhere for those who are salivating at the statism -- and you won't need to look very far.

UPDATE 2: Those around the place excited about this dismembering and bemoaning Telecom's underinvestment in the network they've being stripped of might want to think about who's responsible for said underinvestment: themselves. As I've said before, "No one but an idiot or a cabinet minister would expect to see businessmen or women making a long-term investment in infrastructure when theft of such an investment is imminent, or the breakup of that investment is on the cards."

See all posts on Telecom here.

No broadband for Jenny

Q: What happens to investment when a government threatens to nationalise infrastructure?

A: Investment in infrastructure falls.

If you don't believe me, and you wish to ignore the mountains of international evidence supporting that answer, then ask yourself why Jenny Gibbs and the residents of Remuera, Howick and Paritai Drive are finding it difficult to get broadband. The answer in this morning's Herald is that Telecom is not investing sufficiently in infrastructure in those areas -- and why the hell should it, when that investment is subject to being taken out from under the investors by government edict. As Telstra Australia's CEO Sol Trujillo said in similar circumstances, threatening not to lay the fibre allowing an Australia-wide broadband network: “My duty is to our shareholders — including 1.6m ordinary Australians. I will only invest where I can earn an economic return.”

Unbundling Telecom's property will increase broadband penetration? Don't believe a word of it.

LINK: She's a multi-millionaire and still can't get broadband - NZ Herald
Telstra shrugs? - Not PC (May, 2006)

RELATED: Telecom, Politics-NZ

Telecom broken into again

Telecom ordered to open up lines

Taking top prize amongst all the lunacy:

"The Maori Party was unhappy that the bill did not ensure Maori gained part of the telecommunications sector which it was entitled to under the Treaty of Waitangi."

Why would you invest in telco infrastructure in NZ? Or anything, where through the wilful uncompetitiveness of your competitors, your investment may be nationalised de facto?

[Thanks to Andrew B. for this post.]

RELATED: Telecom, Politics-NZ

Telecom mugged

I've been interested to see some of the self-seeking justifications for breaking into and breaking up Telecom's private property.

No one but an idiot or a cabinet minister would expect to see businessmen or women making a long-term investment in infrastructure when theft of such an investment is imminent, or the breakup of that investment is on the cards. In Australia for example, Telstra's CEO Sol Trujillo resisted being forced to grant access to Telstra's proposed $3 billion broadband fibre network to its competitors, and indeed has resisted making the investment. Says The Economist:

Worried that giving rivals a free ride would undermine his profits, Mr Trujillo is threatening not to lay the fibre

Good for him. Says Trujillo. “Those who risk capital to earn returns shouldn't have to subsidise those that don't.” Quite right.

But what about the many and various economic advantages of such a network? The fact is, if you want those advantages you need that sort of investment, and you'll only get it if government's keep their hands off -- government intervention such as has happened with Telecom is chilling for investment, not an encouragement, and not just for investment in telecommunications. The investment effect of this dismembering will be felt further afield than just the pocket books of Telecom shareholders.

If you think the breakup of Telecom is all good and will deliver you everything you might wish for, then reflect on the words of Thomas Jefferson: that "the government that is big enough to give you everything you want is big enough to take it all away again."

UPDATE: Liberty Scott has some background on how Telecom came to this, and the alternatives to political dismembering: Telecom - the Left Has Won

LINKS: Telstra shrugs - Not PC (May, 2006)

RELATED: Telecom, Property_Rights, Politics-NZ

Operational separation for Kiwiblog

The logic of argument has forced Parliament’s Commerce Select Committee to recommend a Bill for the forced breakup of David Farrar's Kiwiblog. "This is due," said the report, "to its monopoly position in the blogosphere."

The Committee was almost unanimous in endorsing, and improving the breakup. MPs from Labour, National, NZ First, Maori, United Future and the Green Party all agreed on the report, and are expected to vote 119-2 in favour of the bill.

"This is a no-brain," said one.

Said Labour's David Cunliffe in announcing the breakup, "There are many precedents for this type of regulatory action when a company with market power is required to provide competitors with access to its network or faces controls over the prices it can charge."

Effecting an early dismembering of the Kiwiblog empire, David Farrar was nonetheless ebullient. "This is quite right to my mind. A vertically integrated monopoly is that rare beast which should be regulated if competition is stymied. And the problem is that for over four years Kiwiblog has stymied effective competition. I got too cute at blocking effective competition, so the power of regulation became the only option. Kudos to the Minister (David Cunliffe) and the Select Committee Chair (Shane Jones) for getting the Bill to this point, and also to all the members of the select committee. These fine gentlemen (and woman) clearly have their eye on the bigger picture in a way I cannot."

At the time of writing, Kiwiblog Blogshares had gone through the floor. More details of this shock move at G-Man Inc.

David Farrar is 67.

LINK: Government to separate Kiwiblog - G-Man Inc.
Operational separation for Telecom - Kiwiblog (David Farrar)

RELATED: Humour, Telecom, Property_Rights, Politics-NZ