Otara market with Mr. Keynes, Part I

One Saturday morning, as I was walking into the Otara markets, who should I bump into but Mr. Keynes. Dressed in a black suit and tie with his hair immaculately combed, he was definitely over dressed for Otara market. However, no one seemed to bat an eyelash, I suppose everyone there understands he's a product of a different era.

"Good morning Mr Keynes" I said. "A very good Morning to you too" said Mr. Keynes. "Have you come to shop for groceries?" I asked. "Good heavens, No. I'm here just to do my usual observations." said Mr. Keynes. I was curious as to what sort of observations but decided not to ask. "Would you mind if I walked with you while you shopped?" asked Mr. Keynes politely, I saw no harm in him doing so and I was keen to know what he was up to.

We came up to a fruit stall which sold imported fresh longans. At $8.00 a kg, they were a bargain compared to $10.00 from neighbouring stalls. As I walked forward to purchase the longans, Mr. Keynes held me back and said, "What you don't know is that this stall soak their longans in water to increase the weight of the fruit, many an unsuspecting buyer end up paying more for less fruit." I looked at him with an expression of disgust, he continued, "This is a classic case of information asymmetry, where the buyer does not have all the information the seller does. The efficiency expounded by free market theory starts with the assumption of information symmetry where both sides of a transaction have the same information. As you can see, this assumption falls short most of the time!"

"But doesn't the Freedom of Information Act ensure both parties have the same information?" I said. "Ahhh! That's provided if the buyer knows to ask the right question! Also, what stops the seller from lying? In the court of law, his word is as good as yours." countered Mr. Keynes. "This is also why so many people have ended up owning leaky homes, it's a sad state of affairs!" added Mr. Keynes.

"I come to Otara Markets to watch economic activity in action" offered Mr. Keynes. "The diversity of human motivation observed here is inspiration to an economist like myself. Free market thinkers believe that all economic participants are rational and all economic transactions are only carried out because it benefits both parties. This is frequently not the case!"

"Why wouldn't people be rational? I'm rational!" countered I. Mr. Keynes smiled and said "How could you be rational if you don't have all the information? Just now you almost got cheated by the water soaked longans." "Oh, ok." said I quietly. Mr. Keynes continued, "Free market thinkers assume people are simple automatons who only do things that benefit themselves. In reality, human motivation is far more complex than that."

"Look at that vegetable stall over there owned by Mr. Hawera" pointed Mr Keynes.  "Lots of people in the community buy there even though they are not the cheapest". "Mr. Hawera is a well known figure in the community who regularly donates fresh vegetables to the soup kitchens in the community. People are acting altruistic by buying from him even though they can pay lower prices elsewhere." As the price was reasonable, I bought most of my vegetables from Mr. Hawera after hearing what a good man he is.

Further on, we walked pass a fruit stall with good quality food at a cheap price. Surprisingly, there was hardly anyone buying from there. I looked to Mr. Keynes instinctively, knowing he'd have an explanation. "Mr. Tamaki who owns that store is also a well known drug dealer, no one in the community buys from him just to spite him!" explained Mr. Keynes.

"Altruism and spite are two human motivation that free market thinkers never want to think about. Not to mention the very obvious intentional information asymmetry of concealing the truth or lying!" said Mr. Keynes passionately. "Do you mean to say that human psychology is a main influence in economics?" I asked. "That's correct." replied Mr. Keynes.

"The master-economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher–in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician."

This morning's shopping is turning out to be a most insightful event.

Burn, London, Burn.

I was shocked when I saw the riots start in Tottenham. My bewilderment continued when it spread on to other parts of London. I myself wouldn't have expected something like this in a million years, but did anyone see it coming?

Professor Gus John, a fellow at the London Centre for Leadership and Learning of University of London, wrote to the UK Home Secretary warning of social disharmony back in early July. The authorities had warnings of social uprising but chose not to act on it. You can hear an interview with Professor Gus John here:

http://www.radionz.co.nz/national/programmes/ninetonoon/audio/2495486/professor-gus-john

The gist of his research points to the high youth unemployment and the cuts in social and education programs  that has left UK youths in a "Hopelessness that has turned into a fearlessness that knows no bounds". He also points to a lack of moral leadership which has seen many British MPs get away with massive tax payer frauds, financial bailouts of banks that has continuously rewarded themselves huge bonuses irrespective of the economic damage they've done.

The author Hari Kunzru sums it up nicely: "That's true of the kids smashing shop windows to steal trainers. It's also true of the MPs fiddling their expenses, the police officers taking backhanders, the journalists breaking into phones. Why wouldn't they? Why wouldn't any of us? The example has been set by our new masters, the one per cent for whom and by whom we're governed.
The ability of powerful actors in the financial markets to socialise risk while privatising profit appears, to the financial peasantry, indistinguishable from organised crime. No reason for the rest of us to stand on ceremony."

Think of the cost of riot damage and the cost of incarcerating the young criminals. Is it really going to be less than the cost of social, employment and education programs for youths? I certainly know which path I would like society to take! Social harmony to me is another externality that current economic thinking has excluded in its cost calculation. If we don't pay a price for social harmony just like we don't pay a price for environment protection, the cost will eventually come back and bite us in the bum!

I am afraid that the current conservative government in the UK does not seem to have gotten the message. London will once again burn and hopefully; not at the 2012 Olympic games.

The love that dares not speak its name.

It was a year ago when I attended John's funeral. It was a solemn occasion; he had overdosed. The few of us there were family and friends that over the years had not deserted him. I suppose what made it even more difficult was that we had all seen it coming; but none of us knew what to do or even where to go for help.

A few years ago, John and I were having a beer on his porch. We were talking about overcrowded prisons for some reason. He said "I've been to prison", I thought he was joking so I said "For work?", "No, as a prisoner" he replied. I was a little surprised but not too much as I knew he use to do a little drugs. I casually asked "What were you charged for?" thinking it would probably be some minor charge for possession.

"Child molestation." he replied, I nearly spluttered beer down my shirt but I held myself together and tried to look calm. I managed an "Oh" but didn't know what else to say, I was uncomfortable to say the least but I knew he only told me this because he trusted me. After a short pause collecting my thoughts, I manage to ask how long and when he was incarcerated just to show that I was unfazed by this piece of information. After that, we went on to talk about other things as if nothing happened.

That night, I jumped on the internet to see what I could learn about paedophilia. The DSM (Diagnostic and statistical Manual of Mental Disorders) states that there is no proven treatment for paedophilia. The DSM classifies paedophilia as a disorder of adult personality and behaviour, it does not classify it as a mental disorder. 


This is an important distinction. Most people have a tiny tinge of some personality disorder. We all know of arrogant people who psychologically, can be said to display symptoms of narcissistic personality disorder. People who are prone to worry can also be said to display symptoms of anxious personality disorder; the list goes on. After reading this, I was adamant that I would not let the fact that John was a convicted paedophile change our friendship, after all, he's been a good friend to me.


John's been single the whole time I've known him. One time we were talking about love and gay relationships, I said "Isn't it great that we can now be ourselves and love who we want?" The moment those words came out, I regretted saying it. John noticed this and just smiled. He went on to tell me that one of the last things he said to his counsellor before he left prison was "You'll never understand what it is like to not be allowed to love who you desire." For which the counsellor had no reply to.


After that conversation, I got to thinking why do paedophiles exist? Evolution must convey some benefits to them in order for them to exist. According to criminal statistics, most paedophiles are heterosexual as in they mostly are attracted to prepubescent girls. Could it be that having a relationship to prepubescent girls gave them direct access to the most fertile women the moment the girls hit puberty? I think it is a very logical explanation. Evolution is neither wrong or right, it is when biology and modern ethics collide where there arises many problems.


I was often afraid for John. I kept telling him to keep it quiet when he felt like telling people. I was very afraid that people would not understand and that many more people would ostracise him and drive him further into his depression. What I didn't know was that by telling him to suppress who he is, I was driving him further into depression too.


After the funeral, I looked on the internet to see if there were support groups for people like John. There was nothing, Nada, Zilch! I read that the way to help paedophiles is to redirect their sexual energy into constructive areas, channel their sexual love into non-sexual ones. With no support groups around, how are paedophiles able to get help? Also, psychologist and psychiatrist rarely conduct research into this subject due to its taboo nature. If we are to better resolve this issue of paedophilia, as a society we have to open it up to discussion and be honest about it. Failing to do so would just marginalise this segment of our population and drive them further underground; not to mention put our children at risk


When I think of John, it is always tinged with sadness. Regardless of his issues, he was a good man and a good friend. I shall always remember him fondly.

Stuck in an Unrequited Love

Something a little different this time. Just a story... (names have been changed for obvious reasons)

At a social gathering the other day, I was introduced to Lance and we got talking. Lance was extremely chatty and was soon regaling me with every detail of his life. I found it interesting that he could be so open about his personal life with a person he had just met. I suspected that was how he was with everyone he met and I found him quite refreshing to talk to. We somehow got on to the topic of relationships, so I asked him a question I've always wanted to ask a middle aged gay man.

"I have always wondered why many middle aged men go for much younger men, even though there are plenty of single men of their own age". He paused for a while and started to tell me about George...

"I am in love with someone, and have been in love with him for a long time" said Lance. "His name is George and we first met when I was only a teenager, back when we were in the same school musical production." Lance carried on after a short pause reminiscing, "He used to tease me by poking me with his clarinet, that was how we got friendly. I gradually fell in love with him; even though I was still too young to know it."

 "Then we lost contact for many years. For those years I often wondered what could have been.Then out of the blue I bumped into him again at a concert. We quickly got reacquainted again, this time both as out gay men."

I nodded and he ventured on "We got very close, we went on family holidays together. We got to know each other's family very well. I now feel like I belong to his family. George is everything that I had hoped for, a childhood crush that has returned into my life... except that he doesn't view me the way I see him.There is nothing I want more than having George as a partner, however, he only wants me as a friend; a friend with benefits and always on his terms"

"George is obsessed with young Asian men". That completely caught me off guard but I put on my best counselling face and just nodded. "When we go out together, he is always perving at Asian men whenever a young attractive one walks by, I get quite insulted when I catch him doing it. I have often expressed my anger at his behaviour only to be told that my sex life is not his responsibility."

At this point I'm not sure whether to give him a hug  for his pain or a good shake to wake him up from this romantic foolishness. I can see how people can be stuck in the romantic hope of eventually having their love returned but logically I can never truly understand it, I suppose I'm just not built that way.

Lance went on further and said, "I even asked George why he keeps me around if he's only interested in young Asian men; in which George intimated that with the Asian men he's met, there is nothing much to connect with after sex. I gather those he'd met had poor English and perhaps the age gap was just too big."

Afterwards, I got thinking... George would be the classic case of someone with Peter Pan syndrome. Like a child with a gluttony for sweets, attracted to a food that is addictive but ultimately never nourishing.

I ask Lance has any of his friends and family made any comments. He said "All our friends including George's closes friends have told me to move on, saying George is just not worth it but still find myself unable to let go." After hearing that, I realised that there is really nothing I can say that Lance would have not heard before. All I could do was to give him my most sympathetic nods as I listened on.

I'm not sure how the conversation ended, I think we just went on to talk about other things. Ah... Unrequited love, it always leaves a bitter sweet taste...

The French have a point- Full veil violates human rights.

Every time I see someone in a  full Burqa, I get alarmed. I can't help it. There's something about not being able to see someone's face that makes me very uncomfortable.

Recently in Auckland, there's been two cases of people in full face veils denied entry onto buses. The bus drivers have been reprimanded after complaints were filed against them. My sympathies are with the drivers. There have been many cases where bus drivers have been assaulted by passengers and there has even been a case where a taxi driver's been killed. I think drivers have a right to be able to see the faces of their passengers.

All Taxis in NZ now are required by law to have cameras for the safety of the drivers. Wouldn't that be a direct conflict to these laws to allow Burqas to be worn in public? There is a real security reason to ban Burqas. The New South Wales police has just been granted the right to ask for the removal of veils. Also, Banks do not allow entry to anyone concealing their faces (bike helmet, balaclava, burqa etc).

The primary reason I'm against Burqa is that it takes away a persons ability to communicate effectively. Facial cues are naturally a big part of communicating; a smile, a frown speaks volumes. It is detrimental to the quality of life for those behind the veil if they are not able to build relationships to their full capabilities. I'm surprised that proponents of women's rights haven't said a thing yet; burqas are a huge step back for women. Many would argue it's a woman's choice, I would argue it is not a choice when there's family and community pressure on women to wear burqa. It is also not a choise if a person grows up in that expectation and doesn't know it is even a choice.

Also, not being able to see someone's face automatically builds mistrust. Imagine your own reaction if someone wearing a balaclava knocks on your door or comes into a shop where you are; it is a natural human need to want to be able to identify the people sharing your space.

We must have an open debate on the burqa's imposition on human rights. We can not let political correctness and cultural or religious sensitivities rail road us into a lesser society.

Greece- what went wrong?

I have not seen a country go bankrupt before. It would be interesting to see one happen but I wouldn't wish that on any one. It would mean that foreign creditors would grab what was owed and the infrastructure like power plants, roads, water supply would not belong to the Greeks any more. How sad!

Wait a minute! Isn't that what the NZ National government is wanting to do? Sell off our assets! But we're far from bankrupt!!! It just doesn't make sense! Our state owned enterprises generate hundreds of millions a year for the government; selling it off is like killing the goose that lays the golden egg.

Quoting from UK's Telegraph on Greece:
Currently, tax collection is a bad joke. The self-employed systematically dodge taxes, and since they account for around 35pc of the workforce, and include many doctors and lawyers as well as a plumbers, Greece simply doesn't raise enough taxes to finance its bloated public sector.

NZ has the same problem although no where near Greece's extend. The NZ Inland Revenue Department released in a report saying that for every 100 million they spend on tax investigations, they recover 400 million tax dollars. You can imagine the amount of tax dodging that goes on even in this supposedly honest country.

I am about to embark on self employment; why on earth would I want more tax investigations on the self employed? First of all, I'll only be a small fish in a sea of sharks. Second of all, most of my friends and family are salary and wage earners who are not able to dodge any taxes. I am sick of the middle class bearing the brunt of the tax burden.

A Greek on the street of Athens was interviewed just a couple of days ago, saying "Apart from Tourism and a few Olive trees, Greece doesn't produce anything else". Why is that? The government of Greece has neglected the importance of development on their economy. From 2005-2010, Greece had only spend 0.6% of their GDP on Research & Development. This is far below the average of 2% for OECD countries.

NZ spend just 1.2% of GDP on R&D. Although much better than Greece, NZ is at only 60% of average. All OECD countries with at least 2% of R&D spending had economic growth of 2% or more.Only exception being Iceland because their financial system fell over during the global financial crisis.

The above graph is from an R&D magazine. NZ with its number of scientist and engineers should be spending at least 2% on R&D; that is 67% more than what we're spending now. I know so many scientist and engineers that are under employed, Phds who are only teaching secondary schools, etc. With an increase in R&D spending, we could fully employ these people to create innovations that'll bring us much better economic growth.

Well, if Greece really does fall over; let it be a warning on the importance of tax collection and adequate R&D spending.

Not doing too bad, could be doing much better too!

The New Zealand economy is almost stagnant. Our GDP has only grown by 1.5% in 2010. In comparison to China (10%), Singapore (14%) and Australia (2.7%); our growth has been miserable. However, it is doing much better than Spain, Ireland and Greece which are experiencing negative growth.

NZ is smack in the middle of all OECD countries in terms of growth. Obviously we have done a few things right to be way ahead of Spain, Ireland and Greece but have been inadequate in many ways to lag behind South Korea (6.1%), Japan (3.9%) and Australia.

NZ balance of payment stands at -3.21% of GDP compared to Spain (-5.23%) and Greece (-10.84%). Before the global financial crisis, the labour government finance minister Michael Cullen made a concerted effort in paying down our debt. Critics said that he should have given tax cuts in those good years but thankfully he didn't. As the saying goes "Make hay while the sun shines", Michael Cullen has put NZ is a healthy position now to weather the current economic downturn.

Ireland has one of the lowest corporate tax rates in the world. It was touted as the Celtic Tiger for this and look where it is now. Constraint by the EU to keep debt under control and with not enough tax revenue, it has cut spending by 6 billion in 2010. This has resulted in their negative economic growth and high unemployment rate (14.6%). I can remember before the financial crisis, many right wing supporters complained that NZ is not emulating the success of Ireland, those people have now suddenly gone very quiet.

NZ and Ireland both have the same population of around 4.5million. NZ had a healthier balance of payments and so we only had to cut spending by about a third of what Ireland did. It is the governments duty to maintain or increase spending during economic hard times when private business cut back on spending. Otherwise, the economy would shrink and unemployment rise. Government spending was how the United states lifted itself out of the great depression. But how is it possible to increase spending given that we have to keep the balance of payment under control?

Tax avoidance is the key issue here. It has been estimated that the government loose 300 million a year just from tax hidden by trusts alone. The government could recover billions if it investigated these trusts and other tax avoidance like GST, property trading etc. The Inland Revenue estimates that for every 100 million it uses to investigate fraud, it has recovered 400million. When the National government came into power in 2008, one of the first thing it did was to downsize the IRDs tax investigation team and stopping many of their high profile cases. Talk about the rich protecting their own, Dodgy!

And now the National government wants to sell our state owned power utilities to pay off our debt. Well, if it allowed IRD to recover those taxes avoided, it wouldn't need to sell our assets. The National government is simply letting the filthy rich buy up our public assets with avoided tax that should belong to the public, no wonder the rich are getting richer and the middle class is just floundering.

It is simply unfair to let the middle class salary and wage earners shoulder most of the tax burden.