Kiwi Polemicist

August 7, 2009

• Economic Nonsense From the Kiwi Party

The comments button is at the bottom right of this post.

Larry Baldock of the Kiwi Party

Larry Baldock, leader of the Kiwi Party

The Kiwi Party has issued a press release which is full of economic fallacies and is quoted here in blue and in full:

The anti-smacking TV One Colmar Brunton poll released today shows opposition to the law remains strong and consistent at 83% opposed to the criminalisation of good parents who occasionally smack.

Referendum Petition organiser Larry Baldock said the other result from the poll was that 3 out 4 New Zealanders felt the cost of the referendum was a waste of money, and that is not surprising.

“However, since the referendum requires the cost of at least two letters being posted to 3 million registered voters, and the return of the voting papers by prepaid return, NZ Post will be receiving a Government investment of at least $3-4 million,” said Mr Baldock.

It’s not a “government investment” in NZ Post. NZ Post is a SOE (State Owned Enterprise), so the government has taken $9 million from taxpayers at gunpoint for the referendum and given $3-4 million of that to one of its organs. It’s not a “government investment” in NZ Post, it’s a reshuffling of stolen money that the government possesses (I am reminded of those people who rearranged deck chairs on the Titanic).

“This cost could definitely have been avoided if the referendum had been held at the election last year when voters were going to the polls anyway.

Baldock twice describes the referendum as a “cost”, yet he also twice uses the word “investment”. There is an internal contradiction here, because a cost is money down the toilet (not necessarily wasteful, but definitely a reduction in wealth), whereas spending is only an investment if you have a reasonable expectation of receiving back more than you spent (a profit/increase in wealth) in the future.

Also, the cost would not have been “avoided” if the referendum had been held at the election last year, only reduced. The cost of the referendum could only have been avoided if Sue Bradford, Helen Clark, et al had listened to the people instead of imposing their will upon them.

“Given that most of the estimated $9 million cost of the referendum will be spent on postage, printing, advertising and employing staff for counting etc, it cannot be considered a waste. For a start the Government will get some of the money back from its SOEs like NZ Post and TV One, as well as the GST from money spent elsewhere in the economy.

How can the government get money “back” from SOEs, which are part of itself? You don’t put your money on your foot, then pick it up and say “I’ve got my money back”. As for the GST, that’s just government money travelling in circles at great cost to the taxpayers. Baldock is correct in describing the referendum as a “cost”: it’s a cost that taxpayers like yourself have paid at gunpoint.

“If Government spending in infrastructure is an investment in the economy and the future of our country then so is the referendum”.

This sentence and the paragraph before reek of Keynsian socialism, i.e. that government spending on the economy is a good thing. Ludwig von Mises refutes the beliefs of Baldock and Keynes very well:

At the bottom of the interventionist argument there is always the idea that the government or the state is an entity outside and above the social process of production, that it owns something which is not derived from taxing its subjects, and that it can spend this mythical something for definite purposes. This is the Santa Claus fable raised by Lord Keynes to the dignity of an economic doctrine and enthusiastically endorsed by all those who expect personal advantage from government spending. As against these popular fallacies there is need to emphasize the truism that a government can spend or invest only what it takes away from its citizens and that its additional spending and investment curtails the citizens’ spending and investment to the full extent of its quantity. [emphasis added]

Back to Baldock…

In my opinion, the cost benefit ratio of reversing this ill-conceived socially destructive law will far outweigh a similar amount spent on a road.”

I agree with this, but of course the cost should never have arisen in the first place.

“As I have been saying in my radio ads, there are now only two people who can waste this money, the voter who does not vote, and John key if he refuses to listen.”

That’s a nice sound bite, but I believe that the money spent on the referendum was in effect wasted by those who passed a law which was clearly opposed by at least 83% of the population. However, since we are forced to spend the money it is lamentable to avoid voting. Also, if John Key ignores the referendum result he will be endorsing the wastage bought about by those who passed the law.

Keynsian policies are responsible for much of the destruction of private wealth wrought by governments today. I support the Kiwi Party’s opposition to the anti-smacking law, but when it comes to economics the party is somewhere between woeful and pestilential, as shown by the economic nonsense in this press release.

John Key is also a Keynsian socialist and follows the same fallacies.

What do you think about the quote from Mises (in green) and the points that I have made?


Hat tip: Family Integrity


Related posts:

Arrant arrogance (read this first)

John Key shows his arrogance (he is the paternalistic enemy now)

If you want to be free to parent then put your money where your mouth is

The anti-smacking law will cause the death of children

Sue Bradford’s arrogance regarding the anti-smacking bill

If you want to read more use the category selector on the right.


1 Comment »

  1. It’s all a bit depressing but cheered me up a little.

    Comment by Jon — August 8, 2009 @ 7:07 pm

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