[This was written one week ago and I have been dithering around over posting it or not. I am still undecided on my final signing off, though if I had any sense I would, for the reasons given, and for peace of mind. With events yesterday with SCF, I have decided to post, regardless – having amended (quickly) some of it for current events. This piece rambles, but this once more, its allowed to.]

On one of the vitriolic economist site threads about the latest turn in the affairs of Allan Hubbard, and despite I’ve been barely partaking for reasons I shall give in this blog post, poster Cully has written the following referencing myself:

Actually Mark there's a lot more to say - like apologising to everyone involved in the statutory management decision who you bagged so baselessly in your blog. And to investors for feeding them false hope.

http://www.interest.co.nz/news...

The reason I shall never be a free man is encapsulated in this single, patronising post. I have consistently stated as far as Allan Hubbard’s investors are concerned, caveat emptor – the price of laissez faire - and thus they, and their welfare, have never been my concern. For me, this has been entirely a debate about philosophy, and specifically, a philosophy consistent with my freedom. If there was no public solicitation of funds, there was no need for the jackboot of state here. The point of whether public promises as to funds use, or even whether the public in general was solicited for funds, has still never been addressed by the SM’s or the SFO. If there was no such solicitation, no promises other than those that bind individuals through contract, with remedies in the legal system at their behest, then the State had no place here. If investors lose their money, that’s the free market, the condition of my freedom, and of their own.

In summary, my argument has always ended where the SM’s and the SFO stepped in. (There have been no allegations of fraud, whatsoever, in SCF, the vehicle that did solicit for public funds.)

The baying mob spewing their filth out in the threads on NBR and Hickey’s site, would have the State protect me from Allan Hubbard. Well I don’t want that protection, because the society that protects me from him takes away the volition I have over my life. We are a free society, or we are not. The heavy handed actions of the State here prove we are not. The heavy handed actions of State prove, as I will confirm below, we are far closer to Police States in the West, than to a state of Freedom.

Lovers of freedom whom have the correct philosophical base – correct in that it deals with the facts of reality - will understand Mr Hubbard’s fall: it’s the collectivist’s catch cry; altruism. Mr Hubbard’s Presbyterianism most likely led him to the reefs of this. All the information is by no means out there; a 25% over-valuation of dairy farms is within the realms of possibility – can the SM tell me the value of a dairy farm today? – and the ‘missing’ investments are certainly a worry, though the SFO is on record as saying their opinion changes almost daily as new facts are overturned, some of what is apparently missing may yet come to light – though all that is immaterial. However, one thing starting to look certain is that the charitable trusts may have been set up to provide interest free financing to twenty five farms that were in trouble, and various businesses. He was trying to prop up malinvestments with what he probably thought of as the best intentions, not understanding the price of this. By propping up farms and assets bought for too high a price, he may have jeopardised the investments of all his investors, in the very same manor the Welfare State breeds violence and the Bail-out Nation enslaves the lives of its citizens via the tax system.

Regarding – the separate, but related issue of - SCF the news is even worse, for the bad choices are no longer contained, as they should have been, to the investors involved. In this company, Mr Hubbard’s investors will not take the loss: I will. Thanks to a government usurping completely the mandate of free men, the taxpayer has been forced to pick up the tab for all of this under the Crown Guarantee; a guarantee no government concerned with freedom had the right to give. Indeed, it was confirmed by Sandy Maier on TV last night, that much of the reckless property (bubble) lending conducted by SCF was after they received the Crown Guarantee; the usual rule of unintended consequences of government actions has again played out, as the very instrument government believed would ‘solve’ an economic problem ended up exacerbating it. Bill English has already stated on Breakfast TV that the Guarantee was still essential when it was devised, so we can be certain no lessons have been learned. Higher taxes in the future must be assumed. A bigger State is inevitable. I, and those of you who have never invested with Mr Hubbard, or any finance company, will be the ones ultimately paying for the good but ill-informed intentions of a man we had no control over, and this by the force of the State holding a tax return to our head.

Which links me nicely to an IRD Compliance meeting I attended this week in which Mr ComplianceMan from Wellington Inland Revenue head office set out the IRD’s compliance – read coercion - program for the coming year. Here are just a smattering of the facts from that meeting that make free men scared:

IRD have downloaded every single property sale in NZ for the last five years. If you have sold your home in that time then at some stage your life is going to be sitting on a faceless bureaucrat’s desk, and he or she will be determining, according to a set of vague, badly written tax laws that nevertheless favour the State, whether you should have given something up to 38% of what you made on that sale to them to fund the p-bills and violent children born of welfare, and their own wages. That department will lead you through hell, using your own tax money to persecute you with.

With IRD’s focus on Kiwis returning all their income here and overseas, it is not unlikely they are also fishing through every overseas account and downloading those. As ComplianceMan said, ‘the IRD has information you can’t imagine, and we can slice and dice it anyway we want to extract the relevant information to lead and plan our enquiries with’: this stated, of course, with null, unnervingly gentlemanly grin of the power lusting bureaucrat, who I’ll give the benefit of a life bereft of philosophy too, and hence of knowing not what evil he does. (He may be slicing and dicing your life, going through the private parts of it, as you read this.)

For many years the University of Waikato have run a brilliant database. Business can contribute their key financials to it, and get back useful benchmarking information in return to improve their performance with. IRD have now commandeered this database. Those same benchmarks are going to be used to persecute those very businesses with. Mr ComplianceMan was quite chuffed, it has to be said, to be able to use an instrument of private enterprise and turn it into a weapon against the very members who had given their resources and private information to it. [If you are in business and contributing to this database, you may want to reassess this, please.]

One example he gave was of painters. From this database IRD have established what profit a painter can expect to make on every litre of paint. They will now go to suppliers get lists of volumes of paint sold to painters on account, and any painter having the gall to not be earning enough on each litre, say, because it is a recession and they may have been discounting to get work, will be found wanting, and have to explain themselves to the faceless ones (who have never heard of the word, recession). You thought you had nothing to worry about, yet you’re a painter? The Police State has just got pretty personal, hasn’t it. Don’t think they won’t get to you; Mr Dunne, Mr ComplianceMan’s boss was gloating and boasting only three months ago about the $120 million he has extorted from you to persecute you with. And that’s just painters: all the trades are in the offering, for the 'cash economy' is another of their ‘focus’ points.

Despite Messrs Penny and Hooper’s income diversion case still having not been heard on final appeal, the IRD will continue to go for tax avoidance those with the temerity to try and use the lower corporate tax rate. (Why, do you wonder, would Bill English announce a 28% corporate tax rate, if IRD think it tax avoidance to use this rate? Buggered if I know. It must be some exercise in sheer cynicism. But we should be scared, also, IRD thinks its rightful role is to make moral judgments, not just implement tax law as it is written for them. [Obviously English’s logic is lower tax rates generate economic growth; on that he is right. So why isn’t he stopping an out of control IR from directly over-ruling his intent, and seeking to squash what is left of our economy and the hard pressed producer by making company owners pay the higher personal rates of taxation? And especially when the company tax rate is essentially just a withholding tax: shareholders will still have to pay the higher rate in the future when retained profits are distributed to them, or Trusts, via dividends. Again, I ask you Bill English: why legislate a 28% corporate tax rate when IRD deem it is immoral, in their view, to use this?] [Important disclaimer: being scared of the faceless ones that trawl through the minute of our lives, I have always taken a very conservative view of this issue, albeit to take a conservative view is a vague and unknowable endeavour in the detail.]

I point out that none of this is surprising, of course; if the State takes your money by force, such intrusions as these are the only way to do it. And the brute force of the penalty system that goes with it. In these Police States we live, the last thing we can have anymore is our privacy, or our freedom.

And so I now approach the purpose of this, my final post for what may be some great deal of time. The origin of this is nothing other than cowardice. In his novel ‘The Plague’, Albert Camus said, quote; ““… this is where Tarrou’s notebooks end – he replied that there was always an hour of the day or night when a man was a coward and that he was afraid of nothing but that moment.” I’m afraid to say that faced with Mr ComplianceMan, my mind is at that moment, and given into it. The only sop I can give as an alternative is that after looking at the weight of the evidence, I think I am making the decision of a rational man.

No individual can beat the power of the Police States that have such unholy power and dominion over us. In the face of this knowledge, I shall now turn my finite life to trying to find my own best compromise as, like a cripple, I conduct the pursuit of my lifeless, passionless happiness. Thus must involve not sticking my head above the parapet anymore. Go read the threads on Mr Hubbard on NBR and at Hickey’s site, and you’ll see how wise I am being, for they show what it is that can’t be beaten. Namely, as brutal and intrusive as the apparatus of State is, the lurking malevolence that makes the power of State invincible is something no physical army can combat: that is, the idiot, cruel and evil baying mob that supports this Police State and brought it into existence. It is no coincidence Mr ComplianceMan stated the IRD is currently experiencing an unprecedented flow of anonymous information, as the envious and life-haters dob their neighbours in. It’s Animal Farm, it’s 1984: because my bed is comfortable, my houses have great views, it has taken me a long time to realise that we are truly living those nightmares, and we are doing so because the tyranny of the majority were dumb enough to vote it in. And I can no more change the trajectory of the mob toward the Gulag, than I could change the violence and trajectory of the guillotine once it is unleashed.

What the West once stood for, which I sum up as an individual’s freedom, is gone; the battle was never fought in the only place it could have been won: philosophy – humanism, classical liberalism, objectivism, given breath in a constitutional republic. These societies we have are unseemly and revolting, the reasoned coward’s response is that of the mute hermit. My rational approach to evil as pervasive as this is to be a good boy, obey my masters, don’t stick out, don’t be different, don’t draw attention to myself because ‘they’ and their databases can come looking: I resolve to do all this, to disappear as I try to avoid the violence of the mob eating itself.

For it gets worse from here. Thanks to Mr Keynes, our planned Western economies are largely in their death throes, on the verge hopefully of breakdown to laissez faire … no that’s fanciful rot. More likely breakdown to fascist states with no pretence, as governments run out of money, meaning the battles waged by the IR’s are about to become vicious like nothing I’ve seen in my life time, as politicians seek to retain power, and hold the violence at bay of Welfare States that breed this: http://www.stuff.co.nz/timaru-... and most of what you now read in the criminal law pages.

[If any member of the IRD should come across this, please Sir, please Ms, don’t come after me. You got me. You win. I’m sensibly scared as hell of you; I have always gone about my job with the utmost conservativeness, I awake every morning about 4.00am with panic attacks and the whole gamut of fear; 4.00am is my hour of cowardice, the hour that plagues my waking hours. Though as my last comment in this guise, it is important you realise that you should not trace your lineage to the heroes of the West and of freedom, that would be tragic. I’m afraid your lineage goes back to those guards standing outside the gas chambers, just following orders, whose task it was to crush a flowering and once beautiful classical liberalism, that is, my freedom to live as I like, unfettered by your prying tentacles and bloody databases, so long as I don’t initiate force or fraud on another. And Mr ComplianceMan, it would be far more seemly if you weren’t following your orders with the gusto you appear to be.]

Linz: thank you for the space you’ve given me on this blog. You remain one of the true heroes, though I suspect you’ll be pretty miffed at this. This is not a flouncing. It’s more in the nature of resignation …

[Tailpiece: with SCF now in receivership, Bill English has already written a cheque out for $1.775 million of taxpayers money to pay not only investors covered by the ludicrous Crown Guarantee, but to pay those who are not eligible under the CG also! Government (us) will get some of this back on the sell down of SCF’s assets; the net cost to the unwilling taxpayer is expected to be between $600 and $700 million. The cost to the economy has been the limping along of a high number of malinvestments holding back a recovery, since the ill-fated inception of the Crown Guarantee scheme (and, we now find, the bad investments made ‘because’ of the Guarantee).

Regarding yesterday’s events, as one commenter on the NBR site said, if the government can blithely ignore its own legal document, its own law, and pay investors not even covered by the CG, then why should we feel compulsed (there’s the clue) to follow its laws either: perhaps an income tax revolt. Though that won’t be led by me. I’ve decided there’s no sane way to beat this beast, despite sanity lies in doing so. That and my freedom, which I’ve sadly given up on also.]