Yaron Brook speech now online

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Earlier this year, Dr Yaron Brook, the president of the Ayn Rand Institute, spoke at the Adam Smith Institute (write-up here). His excellent speech, on Capitalism without Guilt - the Moral Case for Freedom, is now available to watch online. If you weren't able to join us back in February, these videos are well worth watching:

• Part One 
• Part Two
• Part Three
• Part Four 

You can also watch the Q & A session in parts five, six, seven and eight. And as if that wasn't enough, you can also see Andrew Medworth (of the Ayn Rand Forum) interviewing Dr Brook before his speech: part one, part two, part three and part four.

Why are we ruled by the illogical?

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I've long been saying that recent events might mean we should have more regulation of the financial sector. It might also mean less and I'm certain it should mean different regulation. But could we please have an absolute moratorium on illogical, just plain counter-productive, regulation like this?

Today, as part of that effort to make markets safer, lawmakers in the European parliament are expected to back new rules that will force banks to retain 5 per cent of the securitised products they originate and sell.

Now a reasonable thumbnail sketch of what happened is that the banks went overboard in a wave of euphoria about the joys of securitisation. in fact, they thought that these whizzy CDOs were such fun that they weren't going to flog them on to the pension funds and the insurance companies as originally planned. Nope, these things were so super that they were going to keep them. And so they did keep them until everyone woke up with a hangover one day and realised that they weren't so whizzy or super duper and immediately started calling them "toxic assets". And then the banks went bust.

So the legislators suggestion to stop this happening again is that the banks should be forced to do what made them bust rather than just left to make a stupid decision like that on their own? Everyone's got to do it not just a few?

Now some will say that having to keep a portion of a securitisation will make the banks look a little harder at them and their risks. Perhaps, but this is the point. Up until 18 months ago the banks were indeed looking at these securitisations and they thought they were just peachy. Best thing since sliced bread in fact right up to the point that they thought that they weren't any more. So such a law would not have changed their behaviour at all. Except, of course,  for those people who didn't get swept away in the euphoria and so didn't keep the toxic assets on their books.

Yes, of course we need laws, of course some form of regulatory system has to be in place. But does it have to be so blitheringly stupid a one? One that forces every bank to do what has just sent half of the banks into bankruptcy?

Consult or cut?

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The Times reported last week that a management consultancy employed for its cost-cutting skills is playing a key role in helping the shadow cabinet draw up plans for power. The time-and motion crew have seconded a member of staff to the implementation unit run by Francis Maude, the paper says.

This will do no good at all. It will be like the time when Mrs Thatcher brought in a top businessman from the board of Marks & Spencer – then thought to be Britain's best-managed firm – to map out how to make the civil service and government systems more efficient. The civil servants listened politely as he explained how they could re-use the envelopes or whatever, and then after he had gone everything simply reverted to normal.

It was at this point, in 1982, that the Adam Smith Institute published its seminal report, Strategy Two. The first strategy, of trying to make government more efficient, had failed, it said. The second strategy, and the only thing that would restore the public finance, should be to make government smaller. It led, of course, to the great privatizations of telephones, utilities, carmaking and all the rest. Inside government, no amount of effort would have made them more cost-effective. Outside government, the chill wind of competition did the job in no time. Francis Maude should send the stopwatch bandits home and bring in a wrecking crew.

Dr Eamonn Butler's new book, The Rotten State of Britain, is now available to buy now. Click here to find out how.

The eYouGuide

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The gloriously named eYouGuide is the new effort by the EU to "educate" the masses on "their rights" in regards to intellectual property and things internet. This was a result of an initiative launched in 2007 by the EU to set people straight on their "rights" online. CMU digs deeper to some of the more stern warnings on the site.

The eYouguide states that copyright exists "to promote the progress of knowledge and arts", and warns that in some European countries copyright law may "provide civil or criminal sanctions even for infringements of copyright for non-commercial purposes". It says that civil sanctions "may involve paying damages or just an injunction ordering you to stop the infringing behaviour", while criminal sanctions, normally reserved for infringement for commercial gain, may include "the seizure of devices containing protected work, fines and in some extreme cases also imprisonment"."

So there, that's clarifed it for all of us right? To me it reads like a pretty strong threat with little on the specifics of what you should do to avoid such sanctions. There is really nothing that specifically speaks to those thorny issues like personal copying of material or the matter of where your site is hosted. In short, the eYouGuide is far more about telling consumers things rather than answering their queries. One issue fairly important to bloggers is whether or not you can be served with an arrest warrant if you offend some law in another EU country. Until such thorny issues are full explained its probably still best if you host your site outside the EU.

TNG with Brooks Newmark MP

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Brooks Newmark MP, marked Obama's first 100 days in office with a speech as guest speaker at this months TNG meeting. In his description of the new President of the United States, he evaluated that a lot of his policies were, “Bush-like", pointing out that his policy of ‘Big Government’ and the immense fiscal stimulus were not dissimilar to that of his predecessor.

Nevertheless, the main scope of his speech embarked on what Obama has and will achieve in his Foreign Policy. The pull out of Iraq followed by the increased number of troops in Afghanistan is very much heading in the same direction a Bush. Newmark stated that Obama has put significant emphasis on his dealings with Israel, pin pointing that he will continue to promote a two state solution.

As well as this, he highlighted the importance of Iran and how Obama has attempted to improve relations with the country. For now this has wrong-footed Ahmadinejad, though he insisted that the President might be disappointed when his outstretched arm is not taken by Iran. If and when this occurs, it will be in interesting to see how comparable his reaction will be with that of President Bush.

TNG with Brooks Newmark MP

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tng-with-brooks-newmark-mp

Brooks Newmark MP, marked Obama's first 100 days in office with a speech as guest speaker at this months TNG meeting. In his description of the new President of the United States, he evaluated that a lot of his policies were, “Bush-like”, pointing out that his policy of ‘Big Government’ and the immense fiscal stimulus were not dissimilar to that of his predecessor.

Nevertheless, the main scope of his speech embarked on what Obama has and will achieve in his Foreign Policy. The pull out of Iraq followed by the increased number of troops in Afghanistan is very much heading in the same direction a Bush. Newmark stated that Obama has put significant emphasis on his dealings with Israel, pin pointing that he will continue to promote a two state solution.

As well as this, he highlighted the importance of Iran and how Obama has attempted to improve relations with the country. For now this has wrong-footed Ahmadinejad, though he insisted that the President might be disappointed when his outstretched arm is not taken by Iran. If and when this occurs, it will be in interesting to see how comparable his reaction will be with that of President Bush.

Caught up in struggle

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Given man's nature, freedom will always be in jeopardy, and the only question that need concern each of us is if and how well we took our stand in its defense during the short period of time when we were potentially a part of the struggle.

Benjamin Rogge

Blog Review 956

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Explaining what Brown's really been doing to the poverty figures.

Of course there's a waiting list for subsidised housing. It's subsidised!

No, we really don't like asset forfeiture laws. They inevitably lead to situations like this.

Is the Chrysler bailout all about the unions? Of course it is.

What happens when you vote against an autocrat and the autocrat finds out you've voted against him. Actually, that this happens shows that he's an autocrat.

The real problem with the MPs' expenses system is that it moves them out of the tax system that the rest of us have to endure.

And finally, not an advertisement by the US Tourist Board.

Why are we ruled by the ignorant?

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It's a very cuddly idea, isn't it? That if only women had been running the banks then we wouldn't have had the crash.

Some women MPs have claimed that the 'testosterone-fuelled' financial meltdown could have been avoided if there had been more women in decision-making positions.

As we all know instinctively, there are no power crazed Gorgons and it was entirely the testosterone pumped out by all those unutterably horrid men that led to the banks falling over.  Unfortunately, as so often happens,  instinct isn't all that good a guide to complex matters.  Before we go off and do the feminine thing of what feels right, perhaps we should go and look for some empirical evidence to support our prejudices? You know, be horribly male about it all?

Hmm.

This paper investigates whether exposure to the opposite sex induces greater risk-taking in both males and females.....Both males and females viewing opposite sex photos displayed a significant increase in risk tolerance, whereas the control subjects exhibited no significant change.

Yet another beautiful theory destroyed by an inconvenient fact. The truth is that if we want to reduce risk tolerance in the banking system we have to entirely purge women from it. Or men of course.

To be honest, I don't mind all that much about being ruled by those with prejudices. I've a few of those myself. But I do mind being ruled by those that are ignorant. After all, they've got £660 billion a year of our money to educate themselves with, don't they? Couldn't they use it on something a little more productive, perhaps measuring their knee jerk reactions against reality, rather than the dross they currently splurge it all on?

Europe Day

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Today is Europe Day don’t you know? A day to celebrate the wonder that is the victory of social(ism) democracy and bureaucratization through the back door of a proto-federalist union of what were once nation states.

Despite the disastrous tumour of political institutions that permeate the political landscape of Europe, a short read of the original Declaration – the anniversary of which you are probably not celebrating today – did not necessarily set European relations on the path it sadly followed.

The Declaration calls for the creation of the European Coal and Steel Community (ECSC) in order to promote peace in Europe. In other words it was an acceptance of the classical liberal belief that “If goods don’t cross borders, soldiers will" (Bastiat); even though it was framed in socialistic rhetoric and regulated by a “Higher Authority".

We all now know what this led to and there were clues in this original Declaration. For example this sentence is simply beyond parody:

Conditions will gradually be created which will spontaneously provide for the more rational distribution of production at the highest level of productivity.

So happy Europe Day! No need to raise a toast to the bureaucrats of Europe, these nameless parasites will be toasting your good health. After all it is you who picks up the bill.