Ron Paul’s Outperforming Investment Portfolio

Presidential aspirant surely Ron Paul practices what he preaches…

From Jason Zweig at the Wall Street Journal,

Congressional financial-disclosure forms report holdings only in wide dollar ranges (for example, $15,001 to $50,000). If Rep. Paul owned gold bullion, estimating his investment performance would be fairly easy. But he doesn’t; he owns gold-mining stocks instead. And since the size of each stock holding is disclosed only within a broad band of valuation, there’s no way an outside observer can derive a long-term rate of return for Rep. Paul’s portfolio (or for any other member of Congress, for that matter). We did ask for comment, but his office didn’t respond.

And Mr. Paul’s portfolio generates investment returns almost parallel to Warren Buffett’s Berkshire Hathaway (20+% annual)…

There isn’t much doubt that Rep. Paul’s portfolio has outperformed the U.S. stock market as a whole. Ten years ago, the NYSE Arca Gold BUGS Index, a basket of stocks in mining companies, was at $65; this week, it’s at $522. That’s roughly a 23% average annual return; over the past decade, by contrast, the Standard & Poor’s 500-stock index, counting dividends, has returned some 2.9% annually.

Yet Mr. Zweig downplays Mr. Paul’s outperformance with the following self contradictory analysis…

In short, investing isn’t just about maximizing your upside if you turn out to be right. It’s also about minimizing your downside if you turn out to be wrong. Putting two-thirds of all your assets into one concentrated bet is a great idea if the future plays out just as you imagine it will – but a rotten idea if the future turns out to be full of surprises.

That’s why most investors diversify: to get cheap insurance against the two greatest risks we face.

One is the danger of other people’s ignorance and error: that governments will pursue reckless policies, that corporations will be run into the ground, that speculators will drive valuations of assets to euphoric highs and miserable lows. This is the kind of risk that Rep. Paul has insured against, so far very successfully.

The second risk is the danger of our own ignorance and error: that we will underestimate the resilience of people and markets, that we will mistake likelihoods for certainties, that we ourselves will be swept up in manias and dragged down into depression when markets go mad. Above all, it is the simple risk that we will end up so sure of our own view of the world that the future is certain to catch us by surprise. And this is the risk that Rep. Paul’s portfolio doesn’t appear to insure against at all.

Rep. Paul’s supporters admire him for the consistency of his political views. But if the future happens to unfold in ways he doesn’t expect, then his hot investment portfolio is likely to go cold in a hurry.

It would represent an oddity, if not impertinence, for Mr. Zweig to conclude that in any event that things don’t go as expected for Mr. Paul “his hot investment portfolio is likely to go cold in a hurry”. Such premises assume that Mr. Paul’s portfolio is in a permanent state, or that Mr. Zweig knows exactly what is in the mind of Mr. Paul and what Mr. Paul’s prospective actions are.

In addition, Mr. Zweig harangues Mr. Paul’s concentrated exposure on mining issues based on the vulnerabilities of ‘ignorance and error', yet ironically applies presumptive analysis and generalization of Mr. Paul’s portfolio which is also subject to Mr. Zweig's ‘ignorance and error’.

Ignorance and error would be especially magnified if we dismiss central banker’s actions as having lasting positive or “healing” effect on the markets and economy...

As for Mr. Zweig, he should heed Buddha’s advise:

Do not overrate what you have received, nor envy others. He who envies others does not obtain peace of mind.

What’s Common between Politicians and Psychopaths?

The similarities of politicians and psychopaths, writes Douglas French at the Mises Blog (bold emphasis mine)

According to law enforcement examiner Jim Kouri, politicians share a number of traits with serial killers. People with a talent for mixing charm, manipulation, intimidation, and occasionally violence to control others, to satisfy their own selfish needs are psychopathic.

Not all psychopaths are serial killers, but according to Kouri, serial killers display numerous psychopathic traits. Kouri writes,

“What doesn’t go unnoticed is the fact that some of the character traits exhibited by serial killers or criminals may be observed in many within the political arena. While not exhibiting physical violence, many political leaders display varying degrees of anger, feigned outrage and other behaviors. They also lack what most consider a “shame” mechanism. Quite simply, most serial killers and many professional politicians must mimic what they believe, are appropriate responses to situations they face such as sadness, empathy, sympathy, and other human responses to outside stimuli.”

Currency Controls: My Nightmare at the Airport

Not only has government paranoia almost cost me and my family a vacation, worst, I had to endure a traumatic episode from bureaucratic harassment from local officials.

My basic mistake was to leave my wallet and instead brought my peso cash allotted for our travel expenditures packed into a white business envelope.

At the immigration pat-down, I was asked what the lump in my left front pocket of my pants was which I promptly disclosed.

The inspector told me to step aside from the line and wait for the immigration official, stating that I had exceeded the maximum amount cash (P10,000) allowable for each local citizen to bring abroad, who would decide on my case.

The immigration official arrived and lectured me on my supposed offense. And the officer further said that in breach of the regulation, I was subject to penalty in accordance to the regulations of the Bureau of Customs.

I replied that I DID NOT know about any disclosure procedures, or of any currency exports regulations by individuals.

And prior to the pat-down all I did was to fill up a form where I affixed my signature which DID NOT contain any information about required disclosures.

The immigration departure document looked like this.

Looking back I found the said regulation from IATA’s website

Residents and Non-residents: local currency (Philippine Peso-PHP): up to PHP 10,000.-. Exceeding amounts require authorisation from the Central Bank of the Philippines. foreign currencies : up to USD 10,000.-, or its equivalent. Amounts exceeding USD 10,000.-, or its equivalent must be declared.

Information must be furnished on the source and purpose of the transport of such amount. Violation will be subject to sanctions under Philippine customs law and regulations.

This means I have to apply with the central bank for any amount exceeding 10k pesos to bring abroad! Gadzooks, what onerous red tape!

Back to the airport, the officer suggested that to circumvent the regulation, I could go out of the area and have my (slightly) excess pesos changed into US dollars or other foreign currencies.

However, because of time constraints, doing so risks that we could miss our flight, which would translate to financial losses on our flight tickets compounded by the psychic losses from our frustrated plans.

I pleaded to the officer that the marginally excess pesos (less than 5,000 per head) had been meant for my mom, who is an overseas resident, as a Christmas present. After a few minutes, the officer relented and allowed us through.

Of course, I am thankful to the officer for his ‘generous’ gesture in spite of the hassle.

But such event only reinforced my understanding of how unilateral or arbitrary laws corrupt a system.

-I became an alleged offender for bringing my personal property without knowledge of any breach of the law, and importantly without aggressing upon anybody else (except in the eyes of the enablers and implementers of the regulation, again whose regulations I didn’t know).

-For not enforcing the law, the officer can be construed as being remiss of his duties and equally culpable transgressor.

Yet he did so perhaps in the understanding of the law’s unreasonableness, in my opinion.

The officer knew such law has been repressive, selective in enforcement and would hurt citizens in good faith, thereby perhaps conscience dictated the tolerant decision.

Or it is possible too that the officer has seen enough of our mental and emotional anguish.

-The officer offered an alternative to go around the system (change excess pesos into US dollars), again for the same reasons.

-I was lucky to have that particular officer attend to me. For the outcome would have been different if someone else with malice adjudicated my case. Such regulations could have been used to mulct and extort on us.

And come to think of it, just how can one enjoy a vacation with only 10,000 pesos (USD 227 @44 pesos per USD) in the pocket, especially when visiting a country whose cost of living has vastly been higher than ours?

And considering the millions of local travellers abroad annually, I am quite certain that such regulation have hardly been implemented except for a few instances.

The implication is that such currency control regulation has not been only repressive, selective and arbitrary in implementation but also impractical.

Yet to whose benefit these regulations accrue?

One the political class.

By imposing capital controls, the political class does not want people to vote with their money, or for the markets to expose on their abuses to their constituencies.

The attempt to restrict money outflows, in the guise of preventing money laundering (applied mostly to political opponents rather than to the incumbents and their clients) and blame-the-speculators (not the policies of local politicians and bureaucrats) signify as symptoms of government repression, who coldheartedly would penalize the innocent for their upkeep.

Two, the banking class.

Obviously putting restrictions on cash movements has been designed to bring transactions to the politically privileged banking and finance industry, which have been under the ken or supervision of the political class.

Yet the unintended consequence has been to foster more underground activities, using loopholes (e.g. change to US dollars) or etc., while simultaneously breeding corruption of the bureaucracy.

Let me add that I brought spare cash as insurance from the untoward experience I had 5 years ago, where the failure to access my bank’s overseas ATM network almost left me helpless.

And I have to admit while I have some credit cards, I am an averse or an infrequent user where my credit cards have been meant for emergencies.

Yet another possible unintended consequence would be if there would be an emergency while in another country (say natural disaster), without enough CASH or access to credit cards or ATM, one will be left to suffer an undeserved fate because of such feckless regulations.

I have been reluctant to travel mostly because of my aerophobia, but now I have developed a new phobia: fear of bureaucracy-bureauphobia.

Quote of the Day: Consumption Equality

Just about every product or service that makes our lives better requires a mass market or it's not economic to bother offering. Those who invent and produce for the mass market get rich. And the more these innovators better the rest of our lives, the richer they get but the less they can differentiate themselves from the masses whose wants they serve. It's the Pages and Bransons and Zuckerbergs who have made the unequal equal: So, sure, income equality may widen, but consumption equality will become more the norm.

That’s from author and former hedge fund manager Andy Kessler in an op ed at the Wall Street Journal. Most people hardly realize that much of the improved standards of living have been a product of capitalism.

2011: The Time of My Life

Pardon me for this self-vanity post

Blogging has never been a tool which I initially expected to be.

In 2004, I acquired the idea to use the web from young people who used blogs as a journal or as channel for sundry expressions. My experiment with the blogosphere, then, was originally intended as a backup for the weekly newsletters I wrote as a sell side analyst, and additionally, as a search tool for my published archives.

However, I discovered that my blog had incrementally been generating readership from here and many parts of the world. This eventually made me change my priorities and prompted me to share more of what I have been learning, the application of my self-education through my work experiences, and importantly, the philosophical insights that I have been acquiring from my knowledge acquisition process.

Yet, important changes happen on the margins.

In 2011, I discovered that my blog had been used as reference by some international publications. I found my blog as part of the “blogroll” of a multilateral institution. I also got unsolicited endorsements from people I hardly know. And some of my articles became part of or have been cross posted in a local stock market forum. Also my blog’s readership base more than tripled.

On the investment side, the best reward came when my holdings of 8 years gave me “x baggers” in return. This not only proves or validates my long held and advocated view that the virtues of patience and prudence reap the best retuns, and that magnitude matters more than frequency. Oh, these allowed me to tide over the health challenges of my wife and have a great family vacation with mom and step dad.

My sincerest appreciation for your patronage and support for making 2011 “The Time of My life.”

Happy 2012!

Wishing you the best of 2012!!!

click to get More Happy New Year 2012 Comments & Graphics

Live life.Love Liberty. Love life.

US Equity Markets: From Death Cross to the Golden Cross

Like the Philippine Phisix, the evolving chart patterns of major US equity market bellwether appear to be on path to validate my prognosis.

Below is the imminence of the transition to the ‘golden cross’ by the Dow Jones Industrials (INDU).

The S&P 500 (SPX) will likely follow the Dow Industrials soon

This serves as further evidence of the dependability and reliability of the study of human action (methodological individualism or praxeology) in ascertaining price trends of the marketplace.

As I have repeatedly been emphasizing, contrary to popular opinion, patterns don’t drive prices, human action does. I questioned the efficacy of the current ‘death cross’ pattern here

How Global Financial Markets Performed in 2011

2011 has mostly been a mixed bag for the various asset markets.

From Marketwatch.com

Dow Industrial Average DJIA up 5.5%

S&P 500 Index SPX unchanged

Nasdaq Composite COMP down 1.8%

Gold futures GC2G up 10%

Silver futures SI2H down 9.8%

Copper futures HG2H down 23%

Crude oil futures CL2G up 8.2%

Natural gas futures NG12G down 32%

Gasoline futures RB2G up 11%

Heating oil futures HO2G up 16%

U.S. dollar index DXY up 1.3%

iShares MSCI Emerging Markets index fund EEM down 20%

Financial Select Sector SPDR Fund XLF down 18.5%

NYSE Arca Oil Index XX:XOI up 1.3%

NYSE Arca Natural Gas Index XX:XNG up 5.1%

The above suggests that 2011 had mostly been negative for the global equity markets and a mixed showing for commodities; lower metal prices (except for gold) and higher energy prices.

Although in spite of several major event risks which has contributed to this year’s heightened market volatilities, particularly the Arab Spring, Japan’s triple calamity, and most importantly, the continuing European debt and financial crisis, ASEAN markets has performed scintillatingly beyond expectations for 2011: Philippine Phisix up 4.07%, Indonesia’s JCE 3.2%, Malaysia’s KLSE .8% and Thailand’s SET down marginally by .72%.

Yet the mixed showing of global financial markets for 2011 appear to be symptomatic of a transitioning STAGFLATION economic environment.

Quote of the Day: Differentiating Law from Legislation

Legislators produce legislation, not law (although they do sometimes codify law). And the confusion of legislation with law – a confusion fueled daily in common talk – is one of the most pernicious occurrences that bestows upon the state more authority and respect than it has earned and that it deserves. This ‘man of system’ error reflects a widespread and profound failure of too many people – even many in the genuinely liberal camp – to reflect seriously upon the sources of order in society.

That’s from Professor Donald J. Boudreaux

Quote of the Day: A Political System of Lies

Every civil government is run by liars. This is the nature of civil government. We may hope for incompetent liars. We may hope for little white liars. But to hope for a civil government run by truth-tellers is utopian.

From Gary North.

To believe in the sanctity of governments represents delusion.

War On Gold: China Applies Selective Ban

China has flipped flopped over gold. Over the past years, China has openly urged her citizenry to load up on gold and silver, and even installed their first gold ATMs; now a selective ban will be applied.

Reports the CNBC (hat tip: Bob Wenzel)

Gold exchanges in China outside of two in Shanghai are to be banned, authorities said in a statement released on Tuesday…

The notice — published on the central bank website (www.pbc.gov.cn) — said the Shanghai Gold Exchange and the Shanghai Futures Exchange are enough to meet domestic investor demand for spot gold and futures trading.

Existing exchanges or "platforms" were told to stop offering new services.

The PBOC cited lax management, irregular activities and evidence of illegality which were causing risks to emerge, as the reasons for taking the decision.

The assault on gold trading could be interpreted as an attempt to suppress the public’s growing interest over gold, which alternatively means that China’s inflation figures—4.2% as of December—has been materially underreported.

Also such response are manifestations of China’s boom bust cycles.

Policies are made in the interest of the government and of the political class, and hardly about the public.

Eventually, unsustainable political economic systems will be exposed.

Quote of the Day: Emotional Economics

Emotional economics has given birth to theories that calm examination cannot justify.

From Henry Hazlitt, Economics in One Lesson p.124 (hat tip Peter Boettke).

Emotional economics easily sells to the emotionally gullible public by political agents and their pious followers, in veiled promotion of their self-interests. Thus, emotional economics represents, not only a means to advance one’s status symbol in the face of the uniformed, but as a tool of socio-political manipulation.

Quote of the Day: The Real Egalitarians

The real egalitarians are not the people who want to redistribute wealth to the poor, but those who want to extend to the poor the ability to create their own wealth, to lift themselves up, instead of trying to tear others down. Earning respect, including self-respect, is better than being a parasite.

That’s from Thomas Sowell

Merry Christmas

Wishing you the best of Christmas!

The Philippines celebrate Christmas with the traditional Parol (Christmas Lantern) as shown above, photo from Callezaragoza.com; winner of the Tacloban City Palamrag Parol Competition in 2010 (gerry ruiz photography)

Live life. Love liberty. Love life.

Quote of the Day: Myth of the Rational Voter

Public outrage is an unreliable mechanism for regulating government because the incentives to be accurately informed about public affairs are so weak. Voters often support policies that are based on faulty economic logic. The task of being well-informed about the relative costs of public policy is beyond human capabilities anyway. Since neither the public nor politicians can be vigilant regarding modern bureaucracies, the only "solution" to these problems is to restrain bureaucrats with rigid rules.

That’s from D.W. MacKenzie at the Mises.org

Quote of the Day: Keynesian Nostrum

Keynesianism is not a panacea because Keynesianism has dominated public policy making for half a century and has left us in such a state of public debt. Keynesianism broke the old time fiscal religion of balanced budgets and fiscal responsibility, and changed not only attitudes of economists and policy makers, but also eroded whatever institutional constraints existed on public spending that had existed. Keynesianism cannot work to solve our current problems because Keynesianism is responsible for our current problems. Keynesianism provided an illusion of short term prosperity, but the reality of long term stagnation. Of course, the revealing of the illusion can be put off, as I have pointed out before, if there is the discovery of new opportunities for gains from trade, and/or gains from innovation.

But the governmental habit of spending is still there and the bill has to be paid as some point. Keynesianism is a disease on the body politic because it caters to the natural propensity of politicians to focus on short run, and to concentrate benefits and disperse costs.

That’s from Professor Pete Boettke.

Keynesianism has functioned as the intellectual pillar of the 20th century welfare-warfare based political economy. Yet in applying Keynesian prescriptions to Keynesian generated predicaments would tantamount to “doing things over and over again and expecting different results”. Albert Einstein, who was attributed with the quote, call this insanity. However, modern politicians and their allies seem to know only one option thereby insisting on the same route which brought us to our present conditions.

Norway’s War on Butter Causes Crimes

The nanny state wants to control even our diets. They pretend to know what is best for us.

But each time they do so unintended consequences arise.

From NY Daily News, (hat tip Dan Mitchell)

A pair of slippery smugglers were busted in Norway looking to peddle an illicit contraband - butter.

The two men, who snuck into the country from Sweden, were arrested with about 550 lbs of butter divided into 18-ounce packets, the Norwegian daily newspaper Adresseavisen reported.

They were nabbed Saturday, and both admitted to churning up the scheme, authorities said.

So in effect, Norway’s high tariff on butter prompts some people to engage in smuggling. In short, the government’s “social engineering” regulations creates criminals. This another noteworthy example of the corrupting effect of repressive/arbitrary laws.

Worse, the shortage of butter have made many Norwegians ‘bitter’ to the point that lawmakers are considering a temporary easing of high tariffs, as shown in the video below from Al Jazeera.

I'd further say that any backtracking or implied retreat by Norway's government may eventually lead to its liberalization, a sign of government failure.

Mercantilist Politics: Making a Mountain Out of a Molehill

A common maneuver applied by the advocates of protectionism is to tunnel or fixate on specific imbalances which they use as basis to call for trade restrictions (otherwise known as the fallacy of composition).

Take for instance the debate over China’s role in the US economy, where Chinese imports have been alleged as ‘stealing’ US jobs.

From Walter E. Williams

Let's look at the magnitude of our trade with China. An excellent place to start is a recent publication (8/8/2011) by Galina Hale and Bart Hobijn, two economists at the Federal Reserve Bank of San Francisco, titled "The U.S. Content of 'Made in China.'" One of the several questions they ask is: What is the fraction of U.S. consumer spending for goods made in China? Their data sources are the U.S. Census Bureau, the Bureau of Labor Statistics and the Commerce Department's Bureau of Economic Analysis.

Hale and Hobijn find that the vast majority of goods and services sold in the United States are produced here. In 2010, total imports were about 16 percent of U.S. gross domestic product, and of that, 2.5 percent came from China. A total of 88.5 percent of U.S. consumer spending is on items made in the United States, the bulk of which are domestically produced services – such as medical care, housing, transportation, etc. – which make up about two-thirds of spending. Chinese goods account for 2.7 percent of U.S. personal consumption expenditures, about one-quarter of the 11.5 percent foreign share. Chinese imported goods consist mainly of furniture and household equipment; other durables; and clothing and shoes. In the clothing and shoes category, 35.6 percent of U.S. consumer purchases in 2010 were items with the "Made in China" label.

Much of what China sells us has considerable "local content." Hale and Hobijn give the example of sneakers that might sell for $70. They point out that most of that price goes for transportation in the U.S., rent for the store where they are sold, profits for shareholders of the U.S. retailer, and marketing costs, which include the salaries, wages and benefits paid to the U.S. workers and managers responsible for getting sneakers to consumers. On average, 55 cents of every dollar spent on goods made in China goes for marketing services produced in the U.S.

Charts from the abovementioned FRBSF study

Mercantilists have been arguing from China’s niggardly 2.5% share which makes their entirely ridiculous.

And as pointed out earlier, despite the deepening trend of globalization, the US economy, whom supposedly represents the vanguard of free market capitalism, remains virtually a closed economy.

Yet such argument shouldn’t be seen in the light of merely the share of imports but rather from the social, economical and ethical merits.

As the great Ludwig von Mises wrote,

What generates war is the economic philosophy almost universally espoused today by governments and political parties. As this philosophy sees it, there prevail within the unhampered market economy irreconcilable conflicts between the interests of various nations. Free trade harms a nation; it brings about impoverishment. It is the duty of government to prevent the evils of free trade by trade barriers. We may, for the sake of argument, disregard the fact that protectionism also hurts the interests of the nations which resort to it. But there can be no doubt that protectionism aims at damaging the interests of foreign peoples and really does damage them. It is an illusion to assume that those injured will tolerate other nations' protectionism if they believe that they are strong enough to brush it away by the use of arms. The philosophy of protectionism is a philosophy of war. The wars of our age are not at variance with popular economic doctrines; they are, on the contrary, the inescapable result of a consistent application of these doctrines.

Fruits of Capitalism: Welcoming the Industrial Internet

I have been repeatedly saying that the information age will radically change our lifestyles.

We are getting some signs of confirmation

From the New York Times (bold emphasize mine)

the Internet is growing up and lifting its gaze to the wider world. To be sure, the economy of Internet self-gratification is thriving. Web start-ups for the consumer market still sprout at a torrid pace. And young corporate stars seeking to cash in for billions by selling shares to the public are consumer services — the online game company Zynga last week, and the social network giant Facebook, whose stock offering is scheduled for next year.

As this is happening, though, the protean Internet technologies of computing and communications are rapidly spreading beyond the lucrative consumer bailiwick. Low-cost sensors, clever software and advancing computer firepower are opening the door to new uses in energy conservation, transportation, health care and food distribution. The consumer Internet can be seen as the warm-up act for these technologies.

The concept has been around for years, sometimes called the Internet of Things or the Industrial Internet. Yet it takes time for the economics and engineering to catch up with the predictions. And that moment is upon us.

More…

From the same article…

Across many industries, products and practices are being transformed by communicating sensors and computing intelligence. The smart industrial gear includes jet engines, bridges and oil rigs that alert their human minders when they need repairs, before equipment failures occur. Computers track sensor data on operating performance of a jet engine, or slight structural changes in an oil rig, looking for telltale patterns that signal coming trouble.

SENSORS on fruit and vegetable cartons can track location and sniff the produce, warning in advance of spoilage, so shipments can be rerouted or rescheduled. Computers pull GPS data from railway locomotives, taking into account the weight and length of trains, the terrain and turns, to reduce unnecessary braking and curb fuel consumption by up to 10 percent.

Thanks to capitalism, the world has been turning immensely smarter and a far better place to live in.

Typhoon Sendong Exposes the Myth of Good Government

From the MSN.com

President Benigno Aquino on Monday fought off accusations that he was partying with starlets as the Philippines was mourning hundreds of people killed by a storm.

The presidential palace said Aquino briefly stopped by the traditional Christmas party of his elite security group at their compound on Sunday to show gratitude for their services.

"The president stayed for a little over 30 minutes. But he did not go up on stage, he did not sing, he did not dance. There was no partying," the head of the presidential security group, Colonel Ramon Dizon, said in a statement.

Tropical storm Washi hit the southern island of Mindanao at the weekend, spawning swollen rivers, flash floods and landslides which left 652 dead with hundreds other missing, according to Philippine Red Cross figures.

Reports of Aquino's alleged partying spread after a local TV actress and show host, Valerie Concepcion, said in her Twitter account that she met Aquino at the party, where she performed for the troops and their families.

Concepcion said Aquino laughed at her jokes and enjoyed her performance, triggering a wave of criticism directed at both.

The 51-year-old bachelor president, who comes from one of the country's richest landowning clans, had previously been linked to female celebrities and was once criticised for buying a Porsche sports car, which he has since sold.

My comments:

1. I told you so.

2. While I am very sympathetic to the unfortunate victims of the disaster, mainstream media foolishly makes it appear that events like this function as the only political priority. They make the public expect of excessive maudlinness or overreaction from officials. Policymaking for them, thus, has mechanically been demonstrated as perpetually attempting to please public sentiment reactively.

That’s why many Filipinos end up chasing their own tail—many, if not most, don’t really know what to expect from politicians except for political melodramatics which ultimately ends up frustrating them.

Understand that politicians will HARDLY deliver us from the terrible toll of natural calamities; to the contrary more interventionism, which have been the key cause, will likely worsen such conditions.

Notes the Inquirer,

The absence of a flood warning, high tide, darkness and a false sense of security proved disastrous for people of northern Mindanao when Tropical Storm “Sendong” came over the weekend.

Add illegal logging, rapid urbanization and mining, and the result was deadly for residents of Cagayan de Oro and Iligan cities, government and Red Cross officials said.

This represents as very naïve ex-post account of what has happened.

This assumes that had been none of the above activities occurred, the current fatalities and damages wouldn’t have happened. This is simplistic and sloppy thinking. In reality, this simply isn’t so.

Unknown to the author is that illegal logging activities globally, for instance, have been mainly caused by poverty and by the tragedy of the commons where effected arbitrary laws in response to such problems, has exacerbated the incidences of these activities and engendered other untoward consequences such as more corruption, organized crimes, human rights abuses and etc….

The application of conventional prohibition laws, which tramples on property rights, represents as typical example of applying a cure which is worst than the disease.

In other words, poverty brought about by excessive regulations, the lack of trade opportunities, and or the politicization of local economics has spawned these “illegal” activities and thereby the ensuing environmental degradation.

Poor people care about their day to day survival and not the environment.

Thus the said effects has flagrantly been misread by media as the cause, and thus dumbing down their gullible audiences.

So if the political reactive response will be to curb on these activities, we eventually end up with more of what we least desire. This would represent as the law of unintended consequences.

Instead, as seen in other countries, economic freedom has vastly mitigated the destructive effects of natural calamities. Wealthier people are likely to undertake protective measures for themselves, their families and the community regardless of government actions.

Bottom line: Keeping people poor and politically dependent is a guaranteed recipe for prospective victims of natural catastrophes.

Next as I have argued before, ALL public officials are HUMAN BEINGS. This means that as humans (and not a quasi-deity whose popular delusions has been promoted by media), their actions will be dictated by personal values and preferences.

Alternatively this exposes the myth about good government. There is no such thing as good government whose employment of organized violence will always be politically motivated benefiting a few at the expense of the rest. Despite all the idealistic blarney by media, politics has not been about serving the public (hahaha!) but of the self-interest of the political leaders and their allies, followers and cronies (insider-outsider dynamics).

Lastly, more “compassionate” overreactions actions by political authorities will extrapolate to more corruption and inefficient use of resources which leads to massive wastage and higher taxes and or inflation in the future.

This subsequently translates to more poverty and the same set of troubles in the future.

Does the politically connected mainstream media ever account for why, after all these years and all the changes in political stewardship, we get the same set of problems?

Good government? Duh!