PDT speaks in Dallas

Trump enters at 53:00. Starts speech just after 56:00. The third rally in about a week and the best one. And while there is overlap between the three, each one is a unique presentation with different themes. My favourite bit was how he showed that he could be “presidential” if he wanted. Only an hour and a half out of your life.

Posted in American politics | 6 Comments

Is it? Really?

Journalists are up in Canberra – seeking special privileges.

News Corp and the ABC have confirmed to a Senate Committee that journalists at the centre of police raids in June still do not know whether they could be criminally prosecuted.

News Flash:  Yes, you can be criminally prosecuted. The question is will you be criminally prosecuted.  Dear god – the number of people who struggle with the concepts of “could”, “would”, and “should” seems to an especial problem in the media.

News organisations, including News Corp (publisher of The Australian), Nine Entertainment and the ABC, are demanding changes to laws that include allowing media organisations to contest warrants by police, exemption for journalists from national security laws that make journalism an offence, greater protections for whistleblowers and less documentation stamped “secret” that currently represses reporting.

So hard to get excited about this – I know that a federal senator was trying to alert the media to this problem well before the parliament passed the laws. But the media were too pre-occupied with scoring cheap shots, talking about themselves, and/or promoting their own pet causes to pay any attention. Now they want a carve-out for themselves?

“We are being forcefully reminded every day that a free press is the cornerstone of a good democracy. It is in this environment that we need to find ways to empower journalism and not to penalise it,’’ Mr Reid told the committee.

This whole “media is a cornerstone of democracy” argument has become tired. I’m becoming less and less convinced that it is true.  It may well be the case that democracy provides us with media, not media provides us with democracy.

Posted in Fake News, Media, Rule of law, Shut it down. Fire them all. | 18 Comments

Gee, why won’t anyone invest?

I was quoted in the AFR earlier in the week:

RMIT economics professor Sinclair Davidson suggests criticisms of the government could go further, saying that sluggishness in the economy should be fully placed at the feet of Canberra. He sees the anti-business sentiment, and lack of control over various government agencies, including ATO, ASIC, ACCC and APRA, as driving the lack of investment. Taxes are too high and red tape too constraining. Moreover “the rule of law is being eroded by rolling protests and protesters who are not being adequately policed”.

This morning I read this:

“Overseas institutions do not want to invest in Australian financial services due to the regulatory environment,” said one person briefed on the meetings.

“There were lots of questions about ASIC and APRA and the royal commission, and views that regulators are populist. Several investors said they liked the company but asked why should they take the regulatory risk and they are not close enough to Australia to assess it.”

That is a problem – “views that regulators are populist” – we saw earlier this week Josh Frydenberg engaging in populist bank bashing.  Our friends in Canberra need to start getting serious about the economy. There is a lot of work that needs to be done if they want to secure our economic prosperity. Right now all this talk about eleventy zillion quarters of uninterrupted growth smacks of complacency.

Posted in Economics and economy | 11 Comments

Detraining Day

The white climate elitist kicks the black worker in the head from on high. Symbolically perfect.

Report: Extinction Rebellion activist dragged from roof of London Underground train.

Posted in Liberty Clip, Politics of the Left | 40 Comments

Dislocated Albo

Very little about Australian politicking – distinguishing that from affairs of state – interests me these days. In my adolescence I became a politics tragic. That probably had something to do with the aggressively delineated sides that existed in the later days of the Bjelke-Petersen government. As just one example: when the militant Electrical Trades Union went on strike in 1985 over the Premier’s move to privatise some of the work customarily done by the old, Brezhnevian SEQEB, schoolyard debates were common. Boys took sides, much as they did about Ford versus Holden after the Bathurst 1000 (and with as much expertise). They argued the case they’d heard their fathers make at the kitchen table. Joh was either a god or the reincarnation of Adolf Hitler.

Fast forward many years to the ouster of Tony Abbott. After that, the old zeal for daily political battles, for red meat brawls in Question Time, for adherence to a side … that all died. It should have died earlier; one of my regrets is that I ever backed John Howard’s war in Afghanistan or his cynical, socialist use of the treasury to buy middle class voters. Howard was cut too much slack for too long by either immovable loyalists or proponents of that most hackneyed of saws: Labor would be worse. Anyway, Malcolm Turnbull’s rise signified to many on the right that Australian politics was no longer Brock versus Moffat. The drivers were all on the same team and the contest had become a noisy, meaningless race staged only for the credulous dummies still watching.

Which brings me to Anthony Albanese – or will do after one more detour. There is no better analysis of the strange takeover of the National Party by rainbow leftists – by wokels, if you will – than Paul Collits’ at Quadrant last week. Former leader John Anderson is quoted noting his old party is now well to the left of the Liberals on ‘social’ issues – to the extent that his wife and long-time fellow member Julia would be highly unlikely to join its ranks today. The Andersons’ dismay about the Nationals’ pseudo-urbane conversion to virtue-signaling is identical to that of lifelong Liberals who lost the fire when Abbott was axed.

And so to Albo. The arc wasn’t for arc’s sake. Because the only thing that does interest me about contemporary politics is why Anthony Albanese has failed to become dominant against Scott Morrison. That’s because he seemed unbeatable as a potential Leader of the Opposition if only he could have taken the job from Bill Shorten – which, per new party rules, he couldn’t. He was the man most likely if only he could become the man most likely. Albanese is likeable enough, persistent, self-deprecating and possesses the stolid-but-humane savvy of a poor Sydney boy made good that cannot be faked. Years ago, blogger Mark Bahnisch observed that Albanese looked and sounded like a Labor pol from the 1940s – in a good way. It was true.

Most people thought the Labor caucus and party members made a mistake giving Shorten a narrow 52 percent win against Albanese in the October 2013 leadership ballot. The scepticism was spectacularly vindicated when Shorten was given a Hewson-esque heave-ho in May. I don’t believe for a minute that ill-considered policies on negative gearing, franking credits and renewable energy were responsible for the loss. They didn’t help, certainly. No, I think Scott Morrison is simply a gifted retail politician whose happy-go-lucky persona – combined with an almost Hawke-like self-confidence and believability on the hustings – completely blindsided Shorten who, by comparison, came across to voters as a flustered roo-in-the-headlights. Another plus for Morrison is that he is the first party chief since Bill Hayden and the first prime minister since John Gorton who seems like he could be entirely happy, and entirely himself, if he had to leave office. Voters like that. Homely and sane in The Lodge is a big cultural change after nearly 40 years of sociopathic entitlement wars.

Several important questions arise out of Morrison’s ascendancy and Albanese’s stasis. First, does the prime minister’s win (and Gladys Berejiklian’s) mean that the left-ward tilt of the LNP has finally worked as a generational, Labor-busting triangulation? Were the now dominant Wets right to retreat from the old “battlelines” and the last warrior standing at them? Are the Nationals onto something, electorally, by pairing Tim Fischer’s Akubra with Don Dunstan’s pink shorts? Is it, in fact, the LNP’s home-brand of boof-headed dad-woke – spiced with occasional Stalinist excess by Berejiklian – that has left Albanese flummoxed? I would answer (in the voice of Dibley’s Jim Trott): no, no, no, yes.

The trouble for triangulators is that they can eventually be be triangulated and a simple, unexpected shift in personality politics can be enough to start the process. Bob Hawke and Kevin Rudd – like Scott Morrison – are examples. Who they were and how they came across changed everything immediately. Hawke’s masterful colonisation of economics discourse and Rudd’s ability to create a market for his trifecta of fake – fake expiation, fake consultation and fake catastrophe – bamboozled the Coalition for years. Principles can be drudgery but insisting on them and standing by them serve the interests of a political party (and the nation) far better in the long run. The Wets and the wokels shouldn’t get too cocky. At this moment, however, Labor’s parliamentary leader is no longer able to pick easy fruit off the old Tory sideboard. The hitherto reliable “social issue” differentiators have been largely neutralised by the LNP’s capitulations. That only leaves the class war blunderbuss in Labor’s gun safe; it still has Bill Shorten’s bloody hand-print smudged on the stock.

To break free of triangulated no man’s land, Albanese has only one option: policy. There is no return possible to the consensus governance of Hawke and Kelty, nor to the phony GFC emergency of Rudd and Swan, nor to the Emily’s List culture trolling of Julia Gillard. Those days are gone. Albanese faces textbook full employment, a budget in surplus, record low interest rates, popular consensus on sovereign borders and a dwindling appetite for ultraism on renewable energy even in Labor’s ranks. Those are not rich pickings. Wage growth, tax cuts, the immigration Ponzi, housing affordability, the crisis in Australian education, tax cuts and supply-side economic reform – these are the policy start-ups Albanese has to invest in. A hard and possibly lonely slog, it will mean standing over the Kim Carr-led neanderthals of the left, the climate fanatics, the teachers’ unions and the zombie Keynesians predicting imminent meldown and demanding deficits to forestall it. Can Albanese do anything like this? I hope so. It would be good for the country to have the LNP’s expediency exposed and a revival of Labor sanity inaugurated. But does he even want to do anything like this? That I don’t know. Nobody else does either – which, at this stage, is the essence of his problem.

Posted in Federal Politics | 43 Comments

PDT day 1000

I have seen this marker nowhere else but at Gateway Pundit: After First 1,000 Days in Office President Trump Holds 50% Approval Rating — 5 POINTS HIGHER THAN OBAMA – Despite Impeachment Scam!. This related article goes through just how exceptional these thousand days have been. I will stick to the charts but you really should read the article.

This is how the article ends and while I would like to say, “who could disagree?” there are many who do disagree, whose lack of sense and proportion is astonishing.

President Trump charges forward in spite of liberal and Deep State harassment. His results have been down right miraculous.

Overall President Trump’s first 1,000 days in office were outstanding. He was attacked from all sides and stood tall and to his principles. America is stronger and greater than ever before. The economy is growing and the world is safer. President Trump is doing all he can to Make America Great Again!

Posted in American politics | 59 Comments

Sean Stein Smith: How Are 5G and Libra Connected?

Much has been written about the struggles that Libra, spearheaded by Facebook, has been facing since the original white paper was launched in June. The testimony provided by the head of the program, David Marcus, did very little to take the heat off the project and may have actually increased the level of scrutiny brought to bear on the Libra Association.

In the midst of this continued criticism, with several founding members dropping out — and members of the U.S. Senate actively encouraging some of those members to leave the association — there have been numerous headlines bemoaning the demise of Libra. Whether or not Libra eventually gets off the ground (and if so, what form it ultimately takes) is uncertain, but there is one connection seemingly flying under the radar.

Controlling Emerging Technologies

5G, and the potential benefits and applications of 5G tech, arguably represents one of the hottest areas of investment and development in the contemporary technology marketplace. In order for other emerging technologies such as the Internet of Things and autonomous vehicles to function as expected, spectrum capacity and capabilities need to be increased. With the deluge of data produced by every organization (and individual), expanding the capabilities of digital infrastructure is an imperative for organizations seeking to leverage this information.

With organizations both in the U.S. and overseas committing funds and personnel toward an array of 5G projects, this might seem like a boon for advocates of private sector involvement in the infrastructure of the future. Taking a second look, however, uncovers an underlying force that is having an outsized impact on the development of 5G and related technologies: the government auction process over spectrum. In order for telecommunication organizations to gain access to the spectrum necessary to develop 5G services, there is only one supplier in the marketplace: spectrum auctions conducted by the Federal Communication Commission.

The auction process is certainly superior to the FCC simply allocating spectrum via an opaque process, but nevertheless the control over this valuable resource by a single political entity distorts the market. As a result, mergers and acquisitions in the telecom space are not always driven by business realities, but rather a desire to access the spectrum possessed by other organizations. This convoluted logic behind mergers and acquisitions also leads to antitrust motions being leveled at organizations, increasing costs without leading to much in the way of consumer or competitive benefits. Owing to these perverse incentives, the goal of much telecommunication M&A activity is not customer acquisition, but spectrum acquisition.

In other words, the lack of competition in spectrum development and strict control over the acquisition process can both distort current operations in the private sector and make developing new applications more costly than necessary.

So what does this have to do with Libra?

The Libra Connection 

Spectrum is a clear example of how singular government control over the supply of an asset can influence and distort the actions taken by market participants, but currency is the example of this concept played out in practice. Governments rely on their singular control of currency for fiscal, monetary, and tax sovereignty, yet monopolistic control is hardly a guarantee of effective stewardship. Dozens of examples in just the last few decades illustrate the damage that can be wrought when this singular point of control is abused — not to mention the corrosive effect of inflationary policies on both purchasing power and the propensity to save.

Competition and consumer choice are universally good for consumers but absent in both the case of 5G spectrum provision and currency options. This hurts consumers and organizations, and leads to unintended consequences that ripple through the broader economy. In the case of cryptocurrencies, however, a motivation driving this regulatory and governmental crackdown and scrutiny might indicate another goal: the adoption of this technology into the existing financial apparatus.

Bitcoin has lost much of its luster as a fiat alternative, and other private sector actors have developed and introduced alternatives that are simpler and easier for consumers to use. Against a backdrop of increased private sector involvement, it was inevitable that governments would become intrigued as to how these technologies could be adopted. The Libra initiative may have inadvertently provided central governments and financial institutions a blueprint for how this new emerging area can be brought under the umbrella of centralized institutions.

The People’s Bank of China Takes Notice

The U.S. and Chinese governments are, of course, in the middle of a convoluted and wide-ranging trade dispute/war; the benefits of hurling tariffs back and forth remain difficult to ascertain, but that isn’t the only story. Emerging technologies like 5G and the potential of blockchain/crypto for financial services may still be evolving quietly, but there is nevertheless substantial movement within the space.

Technology, not soybeans, lies at the crux of the tug-of-war currently underway between the world’s two largest economies, and the possibility of a crypto-fiat hybrid highlights the interest of both governments in these emerging tools. This includes the People’s Bank of China (PBoC), which more than the Federal Reserve in the United States is an arm of governmental policy and direction.

Several central banks, including the regional Federal Reserve Banks and the Bank of International Settlements, have issued similar statements. But the embrace of this concept within the Chinese banking establishment is noteworthy in no small part owing to how closely the proposed cryptocurrency mirrors the Libra structure.

The former governor of the PBoC, Zhou Xiaochuan, has argued that the Chinese state should take measures to strengthen the yuan even more in response to the launch of Libra. This follows statements by President Xi Jinping that have openly praised blockchain as central to the country’s plan to lead in several technology categories in the near future.

Given the central government ban on initial coin offerings (ICOs) and many other crypto-related activities, the launching of a cryptocurrency may seem ironic until one looks under the hood. The cryptocurrency announced by the PBoC looks very similar to a crypto-yuan: supported, controlled, and issued by the central bank, and potentially decreasing Chinese reliance upon the world’s reserve currency, the U.S. dollar.

Under the Hood

What follows are three specific ways in which the PBoC plan borrows heavily from the Libra Association model, and how easily other governments could emulate such a plan if so desired.

PBoC: The only official and authorized issuers of this cryptocurrency will be the central bank itself and commercial banks that have been approved by the central bank. According to the Congressional Research Service, four out of five of the largest banks have the government as a large if not their largest shareholder, resulting in de facto control by the central government.

Libra: The Libra Association will be selecting which third parties will be authorized to redeem and exchange Libra.

PBoC: Based on publicly available information, the PBoC will design, implement, and monitor all wallets used to access this cryptocurrency. Excluding sophisticated institutional investors or programming experts, retail investors and consumers will need approved wallets to access crypto holdings.

Libra: The Calibra wallet will be connected to both Facebook and the Messenger platform.

PBoC: Since the PBoC is only accountable to the state, and since the government is rolling out a Social Credit system, it is not unreasonable to see these financial transactions as part of that system.

Libra: How can Facebook, or any other centralized entity governing a cryptocurrency or similar product, guarantee that these financial transactions and holdings will be held separate from other services (like the social media business at Facebook) or governmental initiatives? (That is, if someone is banned from Facebook, will they lose access to their cryptocurrency capabilities and/or savings?)

The similarities between the PBoC project and the underpinnings of Libra are difficult to ignore, and just one example of how governmental scrutiny and crackdown could ultimately lead to the subsumption of a private market idea under the apparatus of centralized institutions.

Akin to the government control over the spectrum, any assumption of control over the market for crypto-fiat applications would likely lead to a distorted and stunted marketplace going forward. Projects like Libra should be scrutinized, and have controls in place to prevent abuse, but the private market for emerging technologies like 5G and crypto applications should be allowed to grow and develop, or fail, on its own. The alternative is an underdeveloped market rife with misallocations that benefits neither the acquiring organizations nor consumers.

Sean Stein Smith

Sean Stein Smith is a Visiting Research Fellow at the American Institute for Economic Research, focusing on blockchain, cryptoassets, and the economic impact of these technologies. He is an Assistant Professor at the City University of New York (Lehman College), serves on the Advisory Board of Wall Street Blockchain Alliance, where he also chairs the Accounting Working Group, and chairs the Emerging Technology Interest Group of the New Jersey Society of CPAs.  His research has been quoted in dozens of scholarly and practitioner publications, and he is a regular speaker at accounting and technology conferences. Follow him on Twitter.

Originally published at AIER.

Posted in Cross Post, Cryptoeconomics | 14 Comments

The long-forgotten supply side needs to be recalled

When I was the Chief Economist of the Australian Chamber of Commerce and Industry, this is what you never saw: Business Calls for Stimulus Spark. In normal English, this says, “Business Calls for More Money from Taxpayers”. There may be no better way to subvert an economy than through public spending. Modern macro is an economic death cult. It’s now more than a decade since the stimulus programs that followed the GFC were introduced, and still our economies remain stalled and stagnant. So let me take you to the words of Australia’s greatest Treasurer:

Mr Costello said fiscal and monetary policy had run out of puff and supply-side reforms such as deregulation were now the key to improving efficiency and ­restoring growth, as retailers pushed for a fresh look at lowering the company tax rate.

Despite the IMF again slashing its growth forecast for Australia from 2.1 per cent to 1.7 per cent — well below the government’s 2.25 per cent forecast — Mr Costello said he did not agree with the school of thought that it was “all doom and gloom out there”.

“We need to turn to another arm of policy which has been long forgotten and that’s the supply side,” he told a Citi investor conference in Sydney.

“After 10 years of deficits and 28 years of continuous growth, we could really get a boost by dealing with some of the imbalances that have built up in the economy.”

While the Morrison government has been under pressure to ditch its commitment to a budget surplus and pump-prime the economy by going into deficit, Mr Costello said he did not believe this held much appeal.

Remember the Costello approach? Cuts to public spending, continuous years of surplus and zero public debt. Worked like a charm. Just let me take you back to my days in ACCI. One of the questions I would ask the entrepreneurs who used to wander through our office is whether they had expansion plans sitting in their drawers that they would put into place if they had the extra revenue. And the universal answer was yes. The American economy has possibly never been as robust as it is today, and all of the efforts have been made on the supply side. That’s where the action is. Public spending as an economic stimulus is a dead end.

Posted in Classical Economics, Economics and economy, Federal Politics, Uncategorized | 21 Comments

Bammy, how I love ya, how I love ya …

Obama endorses Trudeau.

Posted in American politics | 34 Comments

Mises v Marx

Posted in Economics and economy | 7 Comments