Last Updated: Mar 25th, 2013 - 16:46:15 Newsletters : 2007 Newsletters : 31 August 2007 Thought for the Day Why is it that we search for "strong" leaders. The two "strong" leaders we have had in the recent past - Rob Muldoon and now Helen Clark have both led us down the slippery slope to poverty. We don't hear much about dropping two more places down the OECD to join the bottom group with Spain and Greece. Are we happy at our continuing slide downwards? Strong leaders demand control because "they know best" and Nanny state thrives. But this reduces private enterprise and increases the size of government - a recipe for poverty as the Soviet socialists can attest. We need leaders that understand that benign neglect is the best recipe for good government. We need a leader that will stop trying to do everything for us and just let us live our lives without continual interference from Nanny State. This will automatically boost the economy. Aug 30, 2007, 11:34 Newsletters : 2007 Newsletters : 31 August 2007 Why Government Can't Make Decisions Rationally Have you ever wondered how governments come to such weird conclusions about what people want? Here is an interesting explanation. Aug 30, 2007, 10:08 Newsletters : 2007 Newsletters : 31 August 2007 Why Don't Entrepreneurs Outsmart the Business Cycle? The credit markets are in some turmoil, and numerous market watchers and commentators are calling for or even (like Jim Cramer) demanding a rate cut from the Fed. The immediate question for these market watchers, of course, is this: how will the market react to cuts, or to no cuts? But the broader question is, how will the underlying economy react? The actions of the underlying economy are determined by business owners, entrepreneurs, who make decisions about how to invest funds, whether to expand or contract hiring, etc. So the basic issue, now and always, concerning Fed rate cuts and Fed intervention in general is, how do entrepreneurs react to Fed intervention? The Austrian Business Cycle Theory (ABCT) holds, in part, that central bank intervention often causes interest rates to be artificially low, and these artificially low rates mislead entrepreneurs into making investment errors. The result of these errors is the familiar boom and bust cycle. But other schools of economists disagree. A common argument against the ABCT is that entrepreneurs are too smart to be fooled by Fed intervention. The argument claims that entrepreneurs recognize the Fed actions and ignore the Fed by proceeding as if the interest rates were where they would be if they were set by the free market and not by Fed intervention. If this contention is true, the ABCT is wrong in its conclusions about what causes the boom and bust cycle. Do these critics of the ABCT have a point? Aug 29, 2007, 18:17 Newsletters : 2007 Newsletters : 31 August 2007 Top 25 Quotes on the Credit Crisis of 'O7 Do we have the major crisis or is this just another ordinary crisis? Some opinions on the current USA led "Credit Crunch". [ Visit Website ] Aug 28, 2007, 15:24 Newsletters : 2007 Newsletters : 31 August 2007 Does America Need a Recession? Those of you who have been following our voyage of discovery will realise that the reason we have booms and busts is that we have Central Banks and Politicians running fiat currencies and that the incentives are for them to print a little money and have a little inflation which will make everyone feel good. For the banks it is a good thing to have free money to lend out and know that if they ever have a run on their cash holdings (which is likely since money lent out and taken in has little or no asset backing) then the Central Bank will just lend them some more cash until the run stops. Governments like the idea of creating money and this is what we see happening in all countries around our modern world. They get the use of the money which costs them nothing and the people do not realise that having their money debauched by around 10% - 15% each year is the same as a tax on their savings - on top of income tax. Those people who have bought houses and have mortgages on the other hand find that their debts become less and less as the years roll by. This is why we have become a nation of borrowers and do not save our money. We haven't worked it out from first principles and current economics doesn't explain it but experience shows that borrowers are winners - unless they have big loans when the recession strikes. Simple really! Aug 24, 2007, 11:38 Newsletters : 2007 Newsletters : 31 August 2007 Sandy Springs Incorporates, Inspires New Wave of 'Private' Cities in Georgia I am indebted to Muriel Newman for this story from the good ol' USA. As Roger Douglas said, "There has to be a better way". We live in interesting times and with the internet we have the opportunity of seeing how radical ideas work out in real life. How much longer can New Zealand dribble down the slippery slope to serfdom? We have just dropped two places down the OECD wealth table - thanks to the efforts of Helen and Michael - and look to be still headed in the same direction: **** **** **** **** **** Fed up with high taxes and poor service delivery, the nearly 90,000 residents of Sandy Springs in Georgia's Fulton County voted in 2005 to incorporate, making Sandy Springs the first new city in Georgia in 50 years. The incorporation has gone so well that two new municipalities are about to be created in Fulton County, which includes Atlanta. Residents of John's Creek and Milton voted to incorporate in July. The areas will become cities on December 1. Incorporation votes in other unincorporated areas of the county are slated for next year. Have a look at this web site to get more on this story of a privately run city. . . [ Visit Website ] Jul 30, 2007, 10:34