By Bernard Hickey
The free market wasn't really free or perfect. All it delivered was instability and debt.
Here's what I mean.
New Zealand's per-capita GDP is still at 2004 levels despite the addition of NZ$97.5 billion in extra foreign debt since then. We actually shed jobs in exporting over the last decade.
Our current (lack of) rules on capital flows, foreign debt and investment policies created a situation where we sent a cumulative NZ$96.3 billion out of New Zealand over the last 5 years in the form of interest payments on foreign debt and dividend payments to foreign investors.
We were essentially borrowing money and selling assets to pay the interest on the money we already owed. This is not sustainable without some major changes to the way we run our economy, our banking system, our currency system and our tax system.
New Zealanders and our policymakers believed that if we opened our borders for goods, services and capital then we would be better off in the long run. But all this freedom did was let our base instincts to consume now and pay later run free. It also let some very bright investment bankers design fancy derivatives that delievered them huge short term bonuses in exchange for long term risks that have been transferred to the taxpayer in many countries. It is only through luck and some rich Australian taxpayers that we haven't had to do the same here.
We weren't the only ones who believed in free, unfettered movements of capital and it all seemed like a good idea at the time. Who doesn't love freedom?
But the efficient market hypothesis has been proved wrong. We can't trust our companies, our banks and, ultimately, ourselves anymore.
We now face international currency wars, mass money printing and the eventual restructuring of the global currency landscape, possibly with a changing of the reserve currency guard from the US dollar to something else. The Institute of International Finance, which represents 420 financial institutions in 70 countries this week called for a new 'Plaza Accord' or Bretton Woods Agreement to restructure the global currency system.
It's clear something failed and something will change in global currency system, whether we like it or ignore it or not.
So what might the future look like and what should we do in the meantime?
Here's 5 ideas for ways to change the way we preserve, create and transfer capital and our currency.
1. Intervene in currency markets to push the New Zealand dollar down
There is a significant risk that as central banks in the Northern Hemisphere crank up into a series of competitive devaluations that the New Zealand dollar is pushed up vs the US dollar, the euro and the Japanese yen, but not versus the Australian dollar.
With interest rates at or near zero% in America and Japan investors are looking for somewhere safe with a positive return and where there appears little danger of money printing. The Bank of Japan cut its official rate to 0% on Tuesday.
America is gearing up for a second round of money printing. This is forcing many others to try to stop the capital flows this is unleashing from swamping their currencies. Brazil is doubling its tax on foreign buying of Brazilian bonds. South Korea is about to impose new controls. Taiwan intervened to keep its dollar down on Tuesday. Luckily for exporters to Australia, the one currency more in demand than our own is the Australian dollar.
But in the end that won't save us. Our trade with China, now our second largest trading partner, is in US dollars and the Chinese are reluctant to let their currency appreciate vs the US dollar. This is the tension at the heart of the global trade and currency systems. It is being expressed in all sorts of ways, including laws being passed in Congress giving President Barack Obama the right to impose tariffs on most Chinese imports.
If the New Zealand dollar surges under the weight of capital inflows from carry-trading, yield-hunting investors and those hunting for safety away from the money printing, then the Reserve Bank needs to be ready to sell New Zealand dollars. It worked before in 2007 and made the taxpayer a tidy profit. It can work again.
2. Increase the Core Funding Ratio to 90% from 75%
One of the mechanisms by which New Zealanders increased their foreign borrowing in the last 5 years was through the banking system.
Our big four Australian owned banks ventured into the international wholesale money or Commercial Paper (CP) markets to borrow cheaply for short terms. They then shoveled it on to New Zealand home buyers in the form of relatively low fixed rate mortgages, which in turn flowed through into the housing market and the consumer spending that sluiced off that.
This encouraged New Zealanders to borrow and pushed up the exchange rate.
At one point in late 2007 more than half of New Zealand bank funding was from these short term 'hot' money markets.
Not uncoincidentally, at the same time the New Zealand dollar went over 80 US cents and the Reserve Bank of New Zealand intervened to push it lower.
However, when Lehman Brothers and AIG collapsed in September 2008 these 'hot' markets froze, giving the banks and the Reserve Bank an almighty fright.
The Reserve Bank then decided to set the banks a target for how much of their funding should come from long term and stable sources, rather than the shorter term and unstable 'hot' CP markets. This target is the Core Funding Ratio, which says banks must have 75% of their funding from longer term bond and local term deposit markets by midway through 2012. The interim limit at the moment is 65% See more details here.
This has forced the banks to reduce their reliance on 'hot' money and hunt harder for funding from local term deposits, pushing these rates up sharply relative to the Official Cash Rate. See all bank term deposit rates here.That simultaneously has encouraged more local savings and less foreign borrowing. It essentially forces New Zealanders to save locally to repay foreign debt through the banking system.
So what's wrong with lifting the Core Funding Ratio to 90% or even higher? It would make our system safer and make our economy less vulnerable to another freeze on international capital markets.
3. Restrict foreign investment in large New Zealand assets
The government has already broached this subject by having a review into foreign purchases of farmland. The result was a fudge where the government gave ministers the power to reject such acquisitions, but did not change the Overseas Investment laws.
But why limit it to farmland?
Right now nations with large capital surpluses and those looking to diversify out of US dollars are looking for hard, food-producing and commodity-producing assets in stable, easy countries such as New Zealand and Australia.
The Australians have repeatedly blocked foreign attempts to buy strategically large chunks of gas and iron ore. We should do the same, if only to prevent the influx of foreign capital looking to exit the devaluing curreincies from boosting our currency and destroying our export sector.
We should have a proper debate about it. This week Harvard University's pension fund bought the largest dairy farm in central Otago with nary with squeek of debate, unlike in the case of the possible sale of Crafar Farms to the Chinese. Let's do this properly.
4. Restrict investment overseas by New Zealand investment funds, particularly those with some government control or mandate
One of the problems both old and young New Zealand businesses face is a lack of local capital to fund either growth overseas or ownership succession at home.
All too often the easy option has been to sell out to a foreign company. In many cases this has either led to a steady drain of profits and dividends offshore or the loss of technology and expertise.
One solution is to require New Zealand fund managers, particularly those receiving a government subsidy of sorts through Kiwisaver or controlled by the government in the form of the NZ Super Fund, to invest a certain portion of their funds here.
The NZ Super Fund is already making great strides to lift its proportion of New Zealand investments from its current 20% to the 40% recently mandated by the Finance Minister Bill English. See more here in this DoubleShot interview with NZ Super Fund's Matt Whineray. What's wrong with making it more than 60%? Do we really believe all the modern portfolio theories about global capital markets and investment returns over the long run? I've certainly lost the faith and would much rather the money was invested here than in some US dollar denominated asset that's about to be devalued sharply.
KiwiSaver funds should also be subject to a government mandate to invest locally. Just over 40% of the NZ$5.5 billion invested in KiwiSaver has been invested overseas. It should also be closer to 60%. It may not be easy or cheap for fund managers to find investments here. But that's what they're being paid for isn't it? The real danger with KiwiSaver is we force more savings to fix a local capital shortage and the majority is simply shipped offshore because it seems easier and cheaper to do it.
If there is ever going to be a move to compulsion then there has to be a quid pro quo for that effective public subsidy to the funds management industry: keep it local.
5. Encourage investment in high wage exporting businesses rather than low wage consumption businesses
If New Zealand is going to be able to afford to support an ageing population and keep its higher skilled youth paying taxes in this country then we need plenty of interesting and highly paid jobs.
The NZ Institute's excellent 'A Goal is not a strategy' report highlights how New Zealand needs to prioritise development of high skilled, high value export sectors such as Information, Communications, Technology and Niche Manufacturing rather than low skilled and low value jobs in local services, commodity exports and low value tourism. We need more software engineers and less night porters.
So what might that mean? It should mean increasing taxes on low value investing in property, encouraging investment in higher value businesses and celebrating the success of entrepreneurs and businesses such as Rod Drury's Xero that aim for international success with high wage local jobs.
I'd suggest for a start a land tax and a capital gains tax to discourage highly geared investments in land and buildings. I'd suggest rules on bank capital that encourage lending to businesses with intellectual capital, rather than just land and buildings.
(Updated with overnight news on Brazilian currency control measures, Fed's move to more money printing, Bank funding chart, Current account deficit chart)
Your views
105 Comments
Let us get on with it.
As part of the telegraphing of item 3, the first step the Government could take is to specify that large assets already owned by overseas players could on resale only be sold to New Zealand owners. That would also include conditions of takeover by other companies giving the new company a specified time to resell.
Is that too much? If so, why?
In addition with Bernhard's article I strongly recommend to read and spend time with link below:
http://www.green-innovations.asn.au/econ-mdl.htm
The "market" is often seen as having inherent tendencies to generate social and environmental problems such as unemployment, wide income/wealth differentials, community breakdown, the destruction of indigenous cultures, pollution, destruction of biodiversity, and the depletion of fossil fuels and high grade mineral resources. To curb the market, people often turn to law-based controls, regulatory taxes and subsidies, and government planning.
Business interests, however, argue that efforts to control the market should not be taken too far because government interventions distort the market and depress GDP. It appears that the tools of market management can only be used if we are prepared to accept a fundamental trade-off between economic performance and social and environmental welfare. But is such a major trade-off necessary?
SUCCESSFUL ECONOMIES CAN MANAGE THE MARKETContrary to the conventional wisdom prevailing in the English-speaking countries, it is possible to successfully manage economies. Japan and its Asian emulators, using a minimally democratic model, and Northern Italy, Switzerland, Germany, Scandinavia, and countries such as the Netherlands and Austria using a much more democratic model, have not only out-performed(2) the centrally-planned command economies but have also done better than most of the laissez-faire economies. Their high performance economies combine markets, regulation and planning without reducing economic performance. Indeed the combination is actually a significant cause of their superior performance (World Bank, 1993).
Hey guys, here's 5 ideas for ways to change the way we preserve, create and transfer capital and our currency:
1. Debase our money, while losing billions of dollars trying to fight movements in the world's dominant currency.
The taxpayer made a tidy profit from this in 2007... thanks to a once in a lifetime, worldwide financial crisis that pushed the currency lower... for a few months.
2. Halve the domestic money supply, leaving a 10%+ margin between the OCR and market interest rates.
High interest rates won't matter, since there won't be any money to borrow. Or save.
3. Stop the furriners from buying our land, even if they do sorta look like real New Zealanders.
According to the international accounts, there hasn't been a cent of new equity investment into this country from overseas in the last decade. Let's put a stop to... errr...
4. Make our retirement savings dependent on the miserable returns offered by local investments.
See (3). Not even the furriners want to actually own our assets - much better to lend us the money instead, and earn a guaranteed rate of interest.
5. Encourage investment in high-earning exporters, like dairy farms.
Which are up to their eyeballs in debt, from pumping up land values to ridiculous levels. Yeah, let's do more of that.
lol......so no difference between a "communist" totalitarian state and a Liberartnz totalitarian state....with the first you get f**** over by the Govn in the second you get f**** over by big business....some choice
Again of course typical extremist view point from you....there is no shade of grey....ie do some limited action its a simplisitic all or nothing point of view.
regards
In a free market economy the overwhelming majority of businesses are small , not big . And those little enterprises have the greatest impact upon employment .
If gumnuts don't step in , to bail out " too big to fail " enterprises , the smaller ones gradually move in and take up the market share of the failures . A continuum of birth / death / renewal .
Loverly it is , when allowed to operate freely .
A libertarian minarchy is not, nor ever can be, totalitiarian. It is simply about individuals going about their lives, pursuing their happiness, freely, and protected by the state from the initiation of force on them, compared to what we have now, where the Nanny State is the biggest user of force against the individual, the biggest abuser of individual liberty.
And yes, the only economic system conducive of freedom is laissez faire capitalism, a system so different from the crony capitalism we have now, it's almost impossible to conceive it, especially for those with apparent learning difficulties like yourself, steven. But keep up the reading, and you might figure it out eventually.
laissez faire capitalism, is a make believe system......its like Communism, neither have really existed except as a theoretical construct unable to stand up to/in the real world.
Capitalism is just the best way we have found to take cheap raw materials and convert it into goods we dont really need at a rate we cant afford....
I have no learning difficulties instaed Ive long moved on from fantasy of the quality of a 2 year old....unlike you.
regards
Steven, below this you recommend the Amish way of life as the solution to our troubles.
The Amish. [Snort.]
I can see your lips move as you typed that.
Hint: if your solution to supposed ills is living as the Amish do, then you truly are living in the middle ages, which is in servitude, and with little connection to the 21st century.
Excuse me if I don't read or take seriously anything you place up here Medieval Man - or are you posting from North Korea.
1. Almost certainly wrong in terms of once in a lifetime...unless you class that the 2007 event isnt over.....which for those still un-employed is the case. This will take a decade if its that short and if it doesnt double dip......or get worse again.....if you rae saying its over, well you must be looking at the life span of a sparrow....(3 years?)...
;]
4. Agree on this one....ie is this "my" retirement fund or another tax on my money to prop up failing industries or no hope startups designated by Govn....as stopping retirement funds investing in the best spot is exactly that...
5. High wage exporting....dairying isnt that.......its commmodity...indeed it can be profitable where a sensible price is paid for the land.
regards
Under current worldwide conditions worsening, free trade and globalisation could be at risk, even worse a thing of the past. International Trade- and currency wars coupled with protectionism will certainly influence our export businesses. The Export business of many other different reasons is increasingly difficult to control.
Below another example, how “things” can get nasty:
The world changed and is changing fast. Therefore export is fine, but also adding new production segments (ex. infrastructure needs) to our economy in order to guarantee employment, reducing quality imports and our massive account deficit is even better.
Ooh, I particularly like this bit: "The Institute of International Finance, which represents 420 financial institutions in 70 countries this week called for a new 'Plaza Accord' or Bretton Woods Agreement to create new profit opportunities for 420 financial institutions, by gaming the system at the expense of 70 governments."
A Lan Hubbard, I agree with your last statement.
Bernard, you started by saying "The free market wasn't really free or perfect. All it delivered was instability and debt.". The opposite of the free market is a government monopoly and I think that the consequences of this would be worse.
Basically, what I take out of what you are saying is that we as a country should start investing in ourselves:
- push our dollar down so the value of our goods relative to the local dollar increases.
-limit offshore borrowing so we become more self reliant.
-restrict foreign ownership so businesses become focused through making profit on the output of production not the means of production (similar to the anti capital value of property as profit argument).
-restrict investment overseas in-order to increase the means of production here via our own device.
-create high wage exporting jobs to bring in greater revenue per person.
The obvious problem with your insight is that the people would have to have absolute faith in government and there ability to lead - you would be creating a monopoly of investment and if a government official didn't like your idea for funding, you would have little chance getting the project of the ground as there would be few alternatives for funding.
Also for this to be successful it would need to be agreed by both Labor and National voters and almost by definition the two parties would have to join together in some way, creating a communist state similar to China - and judging from China's single vision, long term direction and current growth rates / this might not be a bad thing - I don't know.
Regardless, one thing is certain, in these current changing times government (and the bankers that bank role them), will do everything to grow it-self creating ever less freedom in the life's of us serf's as it seeks to manage the 'crises' it created and is managing for us.
Currently and you can back me up on this Bernard if you have the correct figure on hand and also if my interpretation is correct, only 30% of New Zealanders are productive in generating wealth for our country. The rest ~ the aged, the young, the beneficiaries, the teachers, the politicians, the doctors, the welfare workers ext... owe their lively-hood to the tourist operators, the hotel bus boys, the farmers, the scientists the people who are involved in manufacture for export of goods and services.
So while there is a sound argument for a more self reliance and investment in ourselves through the government (and I agree with many if your points Bernard), there is also good reasoning for a greater free market, for if just 30% of our people can provide the international revenue to fund our country, then imagine what 50% could achieve if - to follow your main point Bernard, we simply started taking accountability and invested in ourselves.
P.S. I feel like a bit of a anarchist this morning, down with the establishment and all of that. But for each non income earning job - like a politician, who from a financial point of view is a drain on our shared resource, that you can convert into a hotel worker (an occupation where often the client is international), you create new foreign revenue and hopefully therefore profit for our collective.
Roadhouse blues,
Many thanks for the questions.
I'm no fan of big government. The last thing I want is government in there making the investment decisions and employing workers.
We won't get productivity growth if we employ people to create things through government. Exactly the opposite, as you can see here in our woeful productivity statistics. http://www.interest.co.nz/charts/economy/productivity
What I'm saying is we need to invest in high productivity, high value exports that create high wage jobs.
I want businesses such as Xero or Rakon or Fisher and Paykel Healthcare to grow exports and jobs and then to reinvest the profits in creating yet more high paying exports and jobs and businesses. I don't want more leveraged investments in leaky apartments and townhouses in Auckland, or, as you say, more unproductive jobs for policy analysts, bureaucrats and social workers.
That requires investment and a change in attitude. We must encourage our graduates and investors to put their money into their companies. That doesn't mean bureaucrats making decisions.
It means qualified fund managers, such as Direct Capital or the NZ Super Fund or the likes of Rod Drury or Sam Morgan putting money into start-ups or quality established businesses.
It has started and the government (and the RBNZ) are edging in the right direction.
We just need more and faster.
cheers
Bernard
We have an alternative market , run by the NZX , and it is dying ! It was meant to be a cheaper option for smaller companys to list shares and thereby raise working capital . Ask Mark Weldon what is going so badly wrong with it . The high tech/ innovative start-ups ought to be charging holus bolus into the NZAX ........... Why aren't they ?
The London based equivalent , the AIM , has brought many new and smaller companys into investors focus ....... Sure , there is alot of rubbish in there too ( I know ....ouch ! ) , but the good outweighs the bad .
"The opposite of the free market is a government monopoly and I think that the consequences of this would be worse."
The free market is never free, there is always someone(s) either controling it for thier benefit or trying to....so there is always a shade of grey....and again the other extreme point of view....if its not free its totally controlled.....who said a totally controlled market? some regualtion and restrictions does not close down a market and make it in-operable....something sensible to level the playing field and keep it level does not need to be or result in a govn [sanctioned] monopoly.
regards
30% produce the wealth- While recognising that you quote BH ,don`t you believe we must see the rubbish collecter etc. as generators of wealth?As a retired farmer have always believed that I carried the rest of you sods ,but only to rark up the Wally`s of the world.For society to work everyone needs to take ownership of their "cogship",except those who believe the "government" owes them a living,As we all know "the government" means the wage earner.Really pleased to see BH has had his road to Damascus moment,think it`s an age thing BH,we all have to grow thru knowing everything.
I agree with some, but not all, of your suggestions:
1. The history of currency manipulation is chequered. The forex market has several orders of magnitude more funds at its disposal than the RBNZ does. If the market wishes to drive the NZD up because of interest rate differentials, it will do so. I believe that NZ dollar sales to drive down the NZD should be restricted to immediate 'emergency' situations, and backed up by subsequent rate changes.
2. Increasing the CFR is an interesting proposition. I suspect it would have to be done gradually, and in conjunction with other moves (e.g. the recent GST changes) to encourage savings. My main concern is that banks and companies investing here will soon find ways to avoid the CFR, such as by using offshore investment companies. This means that over time, the effectiveness of the CFR will be greatly eroded. The RBNZ needs to be alert to this likelihood, and take early measures to shut off any 'loopholes'. If not, the CFR will only serve to make home loans for individuals more expensive, while allowing large companies to access cheaper 'CFR-exempt' loans to buy up the housing stock.
3. Restricting foreign investment may be a useful strategy, but would meet opposition from those with land (as land prices would fall). Perhaps a more 'market-friendly' alternative would be to allow all foreign investment, but to levy a land tax. This would lead to a tax 'income stream' from the land, irrespective of ownership, mitigating any adverse financial consequences. The result would be more intensive use of the land (for better or for worse).
4. I don't think excessive restriction of overseas investment is sensible. NZ has a small capital market which is not well diversified. Sensible long-term financial planning (e.g. for pension funds or the EQC) requires diversification over both sectors and geographic areas. While some (modest) local investment target is not unreasonable, raising this to 50% or more will endanger the viability of these funds. Besides, loopholes will be found - for example, if I set up a listed investment trust (based in NZ) which bought shares in US/UK companies, could a Kiwisaver fund invest in this as a 'NZ' investment?
5. Encouraging investment in high-wage businesses is an admirable goal, but requires some caution. As you suggest, tax incentives and reduction in 'red tape', rather than awarding grants, would be the best method (doling out grants distorts investment priorities excessively). I don't think a capital gains tax will help here, but a land tax might. National's recent reduction in the top income tax rate is a useful step. Finally, NZ actually has plenty of small businesses - the problem is growing them into the medium/large enterprise space. Tax incentives for individuals investing in local 'venture capital' funds (such as the VCTs operating in the UK) could help here.
Just because the 'Free Market Fantasy' is being challenged, doesn't indicate that it needs to be abandoned completely and replaced with a lurch to a completely centrally planned 'Left-wing Utopia'. Have a read of the book reviews (and the actual books) linked from here:
http://www.interest.co.nz/comment/reply/50803/579933
Bernard - well done again. Oddly enough I like #2 and #5.
Cheers, Les.
Agree.....things of use from my perspective is anything effective or practical to reduce volitivity and speculation / gambling....also gaming the market such as buying NZD just before a genuine bid pushing the exchange rate up and then selling to the genuine buyer at an inflated rate.....that for instance should be classed as frudalent and should be a jail term....
regards
The core problem is the govt and RBNZ decision to protect the ponzi bubble at all costs while at the same time conning the public into thinking they are working to make homes affordable again any time soon...they are not!
So if the CFR were to go to 90%...the result would be higher mortgage rates and a real collapse in property back to being affordable...the govt will not allow this...nor will Bolly. The bubble is to be alllowed to be reduced over twenty years through deliberate planned and managed inflation.
As for idea number one: I doubt the RBNZ has the power to stop the hot munny even if it ever gets the courage. The counter argument is the need to have the foreign investment capital coming in...thanks to the poor savings record we have....which is thanks to the bloody awful govts we have had for decades...and the piss poor RB management.
Foreign capital flooding in to scoop up res property....this is being encouraged by Key and co....why else would the RE liars be in Beijing flogging the deals. Again, it is part of the plan to protect the bubble...save the ponzi scheme at all costs.
Forcing funds to invest in NZ invites political corruption....that is so obvious and so certain. You may have a hands off policy by National only to see Labour promise its way into the pig trough on the back of the % of funds going to named destinations in NZ. ....New infrastructure comes to mind...who wants a bridge!
"High wage business"...good idea but where are the skilled employees...how do you counter the poor attitude to education so much a part of life in NZ. Back bench pollys used to receive the teachers salary...now they wallow in three times that sum....so much for valuing education!
Keeping the Kiwi low means imports cost more. That leads to inflationary pressure and social unrest...and an invitation to the progressive socialists to buy an election with promises of a utopian solution and munny for workers! Letting it drift higher does the job of holding inflation down, if only a tad. That makes the govt look good and wins elections.
Instead of returning Noddy to a central planning type economy with more regulations and red tape plus the thousands of civil serpents that would cost taxpayers greatly....how about dealing with the real problems.......stop pissing about trying to protect the property ponzi bubble with BS and spin dressed up in RBNZ games...let the bloody madness end...stop socialising the losses the gamblers must take...bring property down to an affordable level and open the gate to real savings that will lead to investment.
Re #1, see:
'The NZ dollar through the financial crisis'
http://www.rbnz.govt.nz/research/bulletin/2007_2011/2010sep73_3cassinowallis.pdf
It's mainly about rate differentials. Fix that by reducing demand for debt into the unproductive (effective asset/land/capital and gains taxation) and using other means besides OCR to control inflation, eg. CFR (and developments thereof), LVRs, etc, that is, money supply volume controls. Think outside the ortho'box and instead think 'guerilla currency' - be a hard target, by not being an attractive high yielder.
Cheers, Les.
Well its clear not that in addition to shaving off his beard, Bernard has stopped living in the real world... maybe he fancies himself a career in politics?? Labour by any chance??
Bernard, the upshot of your 5 'ideas' would be to create a long term and crippling recession that would devastate the New Zealand economy - drive interest rates through the roof (and then some), send unemployment up by a massive amount and effectively bankrupt the Government....
Well done.
I know full well that there is a place for putting up radical ideas and 'road testing' them, but frankly, this is ridiculous.
Grow a beard and get back in the game.... this nonsense is starting to wear thin... or get some anti-depressants...
Horace,
Don't be so grumpy. ;)
You argue I should start living in the real world.
Let's look at my 5 suggestions and how real/credible/existent they are.
The first one has already been done by the RBNZ and the capacity to do it is now. It worked and could work again.
The second one was introduced by the RBNZ last year with significant effect. I'm just arguing it should be ratcheted up a couple of notches.
The third one was debated by the government in signficant form in the last couple of months. The end result was a fudge but the government will is there. I doubt the opposition in its current form would have too many objections to a proper debate and changes to the Overseas Investment Act.
The fourth one has also already been done by the Finance Minister when he ordered the NZ Super Fund to target 40% investment in NZ assets. I'm just arguing for that to be ratched up a couple of notches and applied to KiwiSaver funds as well. Nothing too radical there.
The fifth one is a bit more extensive, but certainly much along the lines the government is already pursuing. I'm arguing for more aggressive measures to tilt the economy away from consumption to production. The government just enacted the biggest tax reforms in 25 years to do just that by lifting GST, cutting personal income and corporate taxes and tightening property taxation. I'm just saying the government should do more and faster.
You also argue I should grow my beard back. I shaved it off because my wife likes me better with it off. I'm always keener to please my wife than the readers on this blog. But I'll take it on notice.
cheers
Bernard
........ gotta keep the wife happy ? ....... so you know who the boss really is ! ........... good to see that you still have some grasp on reality .......... now pick up a book by Peter Lynch , any one will do , and soak up the reality of the free enterprise system , unencumbered by bureaucratic bungling / interference .
Actually we haven't had 3 decades of the free enterprise system . About 18 months only , during Roger Douglas's reign . We have had a continuance of high taxation / big government / welfare statism for all of my gummy life .
Someone asked why NZ doesn't have behemoths like IBM / Exxon / Apple Corp / Walmart / Microsoft , as the US does . Well it's never been encouraged in welfare states , to be successful , the burden of taxes and red tape inhibit growth and success .
Horace - I'm calling you. And Tribelsss. And the rest -
How in the hell can you talk of 'devastating the economy', when the economy is something based on endless growth on a finite planet?
Are you all insisting that 'wealth' is 'irrespective of physics, and energy' ?
If so, you're all seriously deluded
Of course they are deluded, they are extremists....there is no concept of the future or alternative views, shades of grey etc for ppl like this.
Funny thing is these are all of 1000 voters out of our entire population.....why worry? they are a non-event....Destiny Church has more hope of getting 1 MP than these guys....
regards
Bernard,
Congratulations.
Making a difference.
Exactly the type of effort required.
Few have the courage or inclination. An ideas/solutions page. Keep it up.
The easiest thing in the world to do is sit on the sidelines and see the weaknesses.
The hardest thing in the world to do is offer constructive solutions.
Yes, we would probably lead into the double dip instead of lagging....ie I think its double dip time anyway....
Im tempted to say watch for a drop in the OCR in March 2011 rather than a delayed rise until then.......man it looks ugly.........way worse than 2007/8.........
regards
1 - yes, we'll have to.
2. why stop at 90?
3. yes
4 goes with 3
5 no, too late globally now - we're all in the same boat.
Bernard, this is about Powerdown. Rather than thinking of 'productivity gains' (which include sweat-shops and slavery) think of efficiencies.
We'll always be chasing our tail - each efficiency gain will address the last stage on a lowering graph - so efficiencies won't be enough, but they will be an essential part of the mix.
The question you finance types have to grapple with, is that in a world of dwindling energy supplies (see that Martenson piece in yesterdays top 10) you have dwindling income potential, and the current fiscal system will be forced into a corner - no chance of profit, and no chance of usury gain.
I see Japan is now where the Fed is, and it's totally unsurprising.
The question is : how do you keep up essential social services (hospitals, ambulances, police, schools, sewers, water, food) when the rate of income averages less YOY?
Nobody, but nobody, has gone there intellectually yet. Most of us just see anarchy, societal collapse, and a whole lot of believers (economists and those who interview them - did you listen to Nigel Stirling / RNZ this morning?) still lauding the money-lenders in the temple...
I suggest we start by making your 90%, 100%.
At least that relates money to the real world. That would be a start.
@ Bernard. A good article Bernard, I agree with you that we need to have an open debate on the subject. I would also agree that the Keynesian system we crafted in NZ needs tweaking to make it better (well as good as a bad system could be I suppose), but as Wolly points out each action that is taken has unintended consequences, and hense one of the fatal flaws in the system.
But would it not be better to also consider alternatives to Keynesian economics, such as the work at the Austrian School of economics ? I'd be interested to hear you view , although I think I already know your answer ?
I'd also like to throw in my 2c on "Free Markets".. It is not that free markets don't work, its the fact that corporations, banks, government and globalisation have distorted and manipulated the markets to the point that they are no longer free. A true free market is one where small and medium sized businesses and individuals are free to carry out trade and commerce, with a supportive government, and in that environment it would work perfectly. But that is not what we have today. Rather than turning to more govt regulation and intervention across the whole market as the solution, we need to attack the sources of market distortion and return our markets back to the way they should be running.
Also, NZ doesn't need to be export focused for prosperity. What NZ needs is to be more localised, producing and manufacturing what we need for ourselves, only exporting the surpluses, and only importing what we can't produce here for ourselves. This will create real wealth and jobs.
In the face of Matt's 'What NZ needs is to be more localised, producing and manufacturing what we need for ourselves,' I would like to propose my own readling list: two at 9.30am:
Frist: http://cafehayek.com/2010/10/the-logic-of-trade.html
Quote:
When I talk about the idea of “buying local” I often say that we’ve tried the “buy local” experiment, it’s called the Middle Ages. In the Middle Ages, we mainly bought local and pretty much everyone was poor. This isn’t a proof that buying local is impoverishing. A lot of things have changed since the Middle Ages so it could be that we’re richer now than we once were because of those things, not because we trade with a wider slice of humanity than we did then. But I’m trying to get people to think about the logic of buying local. Even if we had the technology we have now and traded with only a few thousand people who lived near us (as was the case in the Middle Ages for the most part), we’d be desperately poor. We couldn’t sustain the division of labor that creates our current level of prosperity.
Even if we traded with a few million others, the people just in our city or our state, we’d be much poorer than we are now. Even with current technology.
Having said that, I believe that we would not have the technology we have today if we lived as we did in the Middle Ages. It is the opportunity to trade with billions of people that makes technology so powerful and so profitable. ...... ...
Second: http://mises.org/daily/4737
Quote: Obama says that the key to progress is good government. Not so. The real common thread to progress is free enterprise. Progress and prosperity have followed movement toward freer markets and secure property rights.
Spot on there Tribeless and I think you'll find few that would dispute the awesome power of trade and the division of labour to raise living standards. Couple that with increasing energy inputs and impressive technology gains and it's little wonder we are living as well as the kings of old.
The question I have though is why the elevated debt levels and static median living standards in the mature economies?
Looks like that wealth/productivity gain has been gobbled up by the two headed big government-big business monster .
CH Smith:
"the fundamental dynamic of trade with China--it has enabled an explosion in U.S. corporate profits to unprecedented heights. If you think about it, it is absolutely staggering that 10% of the entire U.S. GDP ($13.5 trillion) is corporate profits."
" 83% of the vast wealth reaped from trade with China flowed to the top 10% of U.S. households, and most of that flowed to the top 1%.The bottom 90% received the dubious "benefits" of saving a few hundred bucks a year off their low-quality consumer purchases"
"The "answer" was to financialize the U.S. economy with vast increases in credit, debt and leverage, enabling a hyper-consumerist economy built on a pyramid of debt and leverage. Industrial Capitalism shifted capital and production overseas for a "two-fer"--to skim unprecedented profits from lowering production costs and by expanding into newly opened economies in China, India and elsewhere.
Simply put: Finance took over America, and Industrial Capital moved overseas. Both profited immensely, and China gained an industrial sector paid for by overseas capital and 200 million jobs for its restive, ambitious populace.
But all those virtuous cycles have run their courses, and all the low-hanging fruit has been picked. Now things get tougher for everyone, and the conflicts cannot be resolved easily."
A couple of good articles there... thanks for the links.
RE the Logic of Trade, the author assumes that a western economy based on service industry jobs is both sustainable and gives prosperity...
There is a direct correlation between importing goods from other countries and loss of jobs locally. The more we import the more jobs we lose. Is that prosperity ?
We can't outsource the manufacturing and primary based industries to 3rd world countries and be left providing services to each other. Doesn't work. For that to work, the service industry would have to provide services to the outsourced manufacturing industry to the country where it was outsourced., but what happens in reality is those countries themselves develop their own service industries as a result. What we end up with is a top heavy service industry / consumer economy (in NZ) without a solid manufacturing base to support it (service industry). Wealth is an illusion based on the ponzi scheme.. all works well until it doesn't.
End game, we all become real estate agents and hair dressors selling houses to each other, and cutting each others hair.
"End game, we all become real estate agents and hair dressors selling houses to each other, and cutting each others hair"
Good one Matt,
I posted a while back about the suburban dance instructor (or dog groomer or something) living in a million dollar Sydney home.
A million dollars is a thousand years wages to the person that sewed up her shirt. There's something overdue for a little correction here.
...... and I liked the fact that you liked Matt's comment , Walter . Glad that you are joining us in the light .
The Chicken-Little Hickey crew are retreating to the darkness of their caves , and the middle ages . ........... Their chioce !
Me , I like progress and innovation . And that is fostered by trade , and by a big marketplace . That is what raises our standard of living , and frees us .
Let there be more light !
After peak oil will mean the second middle ages....we are have only done this well because of 100 years of fossil fuel...that age is ending....indeed technology will decline it has to. This isnt optional its nature, there is no choice in this...if indeed making huge profits at the expense of the environment is history....
Someone said a Pharoh would envy the average household today because of the amount of energy we have on tap would out do even him...
Division of labour....indeed....excess energy has allowed us to have such a luxury...therefore without energy specialisation will decline...
"Poorer" well I guess for some being rich means the be all and end all of being happy and being poor means being un-happy..... Personally linking a state of mind to a piece of paper or piles of it makes no sense, there is more to life.
A good model to consider is the Amish......they as a community seem happy enough....
second - mises, this is a choice there is no right or wrong...
regards
When something ends..it also has some of the elements of its begining in it as well..However in retrograde.I would imagine after peak oil,we would see steam trains on the lines again..more Victorian technology.upgraded of course..and possibly vast areas of land growing Willows for charcol manufacture..per nz. invention to microwave wood into charcol ultra fast....We have seen the thirties crash..remember that was the time wealth was invented for the avarage Joe? now we see the big crash,when wealth for Joe was taken away.Which only proves it was an unstastainable pipedream anyway..sustainability wouldn't be a bad thing in the land of tomorrow.
The thirties had some awsome steam driven lorries which were the match of those produced today.Bike to the station,ride the miles away on a Chuffer..and then on yer bike! sounds great to me.
Nice thought at the end there MattS...but the vision of utopian Noddy is just that ...a pipe dream!
Exports earn the dosh needed to pay for imports. Pretty bloody simple really.
The mistakes were made way back when govts dreamed of a larger pop bringing greater wealth on the back of more activity. Throw in the rise of the benefit pork paid for voter support, by both parties....and you end up with the current crap.
The best we could hope for is the departure of the unskilled and unwilling to aus for Gillard to fashion into ALP supporters....and for an end to the govt handout regime in Noddy.....the fiscal hole would close....taxes could start to drop....incomes to rise...investment by Noddyites to increase.....but into what.....if the investments went into Noddy ventures, you get a return of the greed driven immigration drives for skilled workers and you end up back in the shit......the investment would be better directed into foreign ventures!
Along the way we have to see and end to the bloated benefits handed out to senior civil serpents....if they want $500000 plus salaries on the back of taxpayers, let them bugger off overseas. The size of govt needs to be throttled. The whole nation would be a dam sight better off with fewer but harder working, better educated peasants, a smaller govt and more investment of Noddy wealth offshore.
"Fight"....for what?....Noddyland is run by the aussie banks...you know that...the peasants haven't a bloody clue and live on BS and spin....already the idiot Labour mob are planning to buy votes with gst cut BS promises...Key takes directions according to his judgement on which seats he must win, not on what must be done!
You cannot buy stuff if you do not sell stuff unless you steal off taxpayers or borrow the future taxpayers into greater debt. This place is stuffed with debt and English is busy shoving more stuffing into the Kiwi.
The aussie banks made a dork of Cullen and now milk the Noddy economy for weekly mortgage payments.
Bernard.... Nowhere did u mention our insatiable thirst for credit.. That alone accounts for much of the demand for $NZ... in terms of exchange rates.
Most of the points u made ...I would call band aids.. which could well lead to just as many distortions as all the previous band aids.
I think we need to go right back to first principles..
For example, Throw out the bizarre ways we measure our standard of living.. ( GDP growth has become an end in itself) ...... in fact look at the Global madness going on.... in the name of GDP growth.
How would our dollar be if, as a Nation, we lived within our means...?????... and actually started repaying our debt..??
Peter Schiff understands the first principles of economics
Colin - get it together. Put-down categorisation (lefite, greenie, doomer etc) is classic denial.
What you do is deride, and therefore elevate yourself, and thus (by some magical association) classify your outlook as superior.
A finer distinction (vis-a-vis denial), is something called 'cognitive dissonance'.
You're and example of the one or the other.
Some of us just deal in facts. Interestingly, the exponentially-increasing draw-down of natural capital is a fact. Doubling-times are another. The fact that work requires energy, another.
You're leaving it late to get informed. Steep learning curve from where you seem to be, too.
Good luck with it.
thanks for an interesting insight Bernard
Re the point about currency intervention - all of the types that say the RBNZ does not have the capacity - remember, this is about REDUCING the price of the currency.
They have the monopoly on the supply, so can sell as much as they can print - but then isnt that the same as QE. Then we will be no better than the US? Or am I wrong?
I like the other ideas, especially the one re CFR and investments - why should Kiwisave go offshore, it should stay here to generate a deeper captial market , which will provide opportunities for higher quality investments and reduce the incination of value creating companies going offshore for funds
It would create a virtuous circle - funds generated in NZ, are used via kiwsaver to fund innovative firms in NZ, which thereby increase overall wealth in NZ
In point of fact..If interest rates fall to near zero..the reality must be mentioned which would have the true interest rate,that should be advertised outside the Bank as, -5% per annum.Which is personal wealth stripping on a grand scale.This wont work for very long,because its robbery on a grand scale.
Reading all the comments, it seems so far none read through/ spend time what should be the “Economic Bible” of New Zealand I mentioned earlier 5/10/ 9:25pm:
Here the link(s) again:
http://www.green-innovations.asn.au/
http://www.green-innovations.asn.au/econ-mdl.htm
http://www.green-innovations.asn.au/5key-spf.htm
Unmanaged markets cannot deliver ecological sustainability because of (a) the way that institutional structures generate an inappropriate price structure (Sutton, 1995a) and (b) the way that the prevailing culture and dynamics of entrepreneurialism leads firms to actively ignore the social costs of the side-effects of their activities (externalisation of internalities). Democratic market management (Sutton, 1995b, 1996) cannot be carried out without government action(1).
However the process of the globalisation of the economy and the concentration of economic power in the hands of 100 or so of the currently 37,000 multinationals has so strengthened the collective power of private corporations and so weakened civic governance (technically and ideologically) that radical market management to foster the public good is politically impossible and the situation is virtually irretrievable unless strategic sections of the private sector take action to reverse the trend.
So, if ecological sustainability is to be achieved, a strategically significant number of firms will have to become active partners in seeking the institutional reform to make effective market management possible. This sort of self-limiting behaviour by firms is at present rare but is not impossible nor necessarily disadvantageous to the firms (Lloyd, 1990; Collins & Porras,1994).
Because both ecological problems and the economy have very strong global elements, the institution building for a managed market and the political pressure to create it will need to have a global dimension. This means that ecological sustainability will not be achievable unless at least some multinational corporations become genuinely sustainability-promoting. Greenwash is not what is needed here (Greer & Bruno, 1996).
Is int funny how people perspective changes from where they stand?
"New Zealanders and our policymakers believed that if we opened our borders for goods, services and capital then we would be better off in the long run..."
I disagree..the common Joe Public NZer hasnt, didnt , and never has wanted our assets sent off shore...commonsense told them this sort of thing would happen.
"Our current (lack of) rules on capital flows, foreign debt and investment policies created a situation where we sent a cumulative NZ$96.3 billion out of New Zealand over the last 5 years in the form of interest payments on foreign debt and dividend payments to foreign investors. We were essentially borrowing money and selling assets to pay the interest on the money we already owed. This is not sustainable without some major changes to the way we run our economy, our banking system, our currency system and our tax system"
It was our young (not BBs) highly 'educated' policy makers who skipped Neville Bennett's lectures on historical economics, who thought they knew everyting.....and the politicians who consider the NZ public opinion was moronic, along with fiscal policies dropped thru the 1980s and 90s... Put in place after previous economic upheavals by generations, now gone, to protect against repeats.
The world wide economic recession was caused by the 'experts' If they had 1/2 a brain they would die of confusion.....the same people who thought the Ave citizen only had 1/2 a brain and should die of confusion.
The older generations planned for long term, generational stability, the younger generation cant see or plan beyond the next 3 to 5 yrs and all it takes to do so is a LITTLE good old commonsense.
"But the efficient market hypothesis has been proved wrong. We can't trust our companies, our banks and, ultimately, ourselves anymore."
This is about a stupid comment as "he died cause his car run off the road"
Last time I looked the bank was an inert building in the main street...why blame that...or the car? We should be putting the blame right where it belongs...At the feet of the people in that bank, at the feet of the person how was supposedly in control of the car....the educated younger generation economists and boy racers
Steps, I can't understand how you can think it was the younger generation who got us into the debt/mess we are in today. To be a non-BBer one has to be over 65 or under 46 years. So who are the under 46 year old decision-makers whose names we will all recognise as being in a position of recent political/economic influence?
So you're saying today's 45-55 year olds (or thereabouts) are to blame for the mess we're in but the older BBs (say, 55 - 65 year olds) and the generation before them grew up in a very different atmosphere/time?
Well, in my opinion, it was Rogernomics which really got crony capitalism going here in NZ - and dear old Roger was born in 1937 - making him 73 today. Then there were his friends Micheal Fay born in 1949 - making him 61 and David Richwhite born in 1948 - making him 62; Roderick Dean born in 1941 - making him 69.
These are the folks who "transformed" (read: pillaged) NZ for their own selfish gains.
Nope, in my opinion these now "old codgers" stole most everything years ago - leaving the youngsters of today (i.e. the great majority of NZers 40 years and younger) in debt peonage.
Yes, it was a different time when they were growing up... most NZers if hard working and honest could make a go of family life - not the case today. Because these jokers came along and invented "asset stripping" - they destroyed workers rights to representation - they invented "behind closed doors" democracy - they opened up every man and his dog to the rigged "market forces" which served their purposes only - they invented spin in the form of "TINA".
There was no restraint and no compassion - and they were knighted their efforts.
Hardly a shining example of a generation.
Where does hind sight come into it? The Ave NZer was saying dont sell well before it was sold...and they said why at the time.....and now it has happened
Then we get Key saying he doesnt want to see NZ sell off it main souce ofd income (farms)
Now THAT is hind sight because he like the Kiwi back then is using long term common sence.
Fraudulent printing to fight fraudulent printing? Print if you must, print to infinity, but convert the proceeds into gold, no matter who it pisses off. Remember though that this gain in assets is not earned, it belongs to those who have put their faith in your currency. There is no way of telling whether the money flowing into your currency has been legitimatly earned or it's the stuff that has been printed into existence elsewhere. Artificially lowering the currency means that assets can be snapped up cheaply so capital controls cannot be avoided. Charge a tobin tax on all currency trades along with rules on minimum holding times.
BH writes .. tilt the economy away from consumption to production. The government just enacted the biggest tax reforms in 25 years by lifting GST, cutting personal income and corporate taxes and tightening property taxation.
Correct.
A simple test of your proposed model is .. eliminate personal and company tax altogether .. raise GST to 30% .. taxing consumption heavily becomes an incentive to save .. GST proceeds should provide compensation to beneficiaries and then the real problem becomes exposed .. how do you shift savings into production and kept on shore .. solve those problems and you have your answer
30% GST is highly regressive...
Clearly over the last 30 years there are examples (countries) that moved to a less progressive tax systems the result is where we are now...not a great spot....interestingly where tax systems are more progressive the economies seem in better shape.
regards
"But the efficient market hypothesis has been proved wrong."
Sorry - when did that happen? In the US some very unwise investments in mortgage backed securities were made. An efficient market would have made those investors realise their losses, go bankrupt, and recycle whatever assets remained at lower prices to revitalise the economy. Instead, the people who had invested unwisely have been "bailed out" as if it were the government's fault for not putting a law in place to stop them. There has been very little laissez faire anywhere in the past couple of years, and it's getting worse, so it's a bit ironic to blame "the markets" for where we are going as a result.
Bail outs are what you give to unemployed people who can't afford food and housing, not something you give to people who are at risk of losing some money.
"Restrict foreign investment in large New Zealand assets" "Restrict investment overseas by New Zealand investment funds, particularly those with some government control or mandate"
Now that Paul Henry has been fired from the breakfast show, there's an opening for you Bernard. Let's just call a spade a spade here, you're being racist. I was born in Japan, but I look like a "kiwi", so no-one would bat an eyelid if I bought a farm. But they baby next to me in the delivery ward looks like an asian, so we need to create a government department to consider whether he's "kiwi" enough to own some land that a bunch of true-blue (or should that be "white") kiwis clear felled from majestic forest a hundred years ago.
The best person to own NZ assets is someone who understands how to develop them and use them well. The worst is someone who sits on them, letting them underperform, then passes them on to their less competent offspring. The same goes for investing government funds offshore. If there's an opportunity in NZ that is offering a good rate of return, then well and good, but there's no point blowing our superannuation on some vague idea of a landed gentry, while there's a great opportunity going begging somewhere else.
"Encourage investment in high wage exporting businesses rather than low wage consumption businesses"
Nice idea, but do we get to vote on which industry will be polluted with government cash? True innovation rarely has anything to do with government handouts. It simply creates market anomolies (eg. a gathering of people under the funnel where the money comes out), that don't translate so well to overseas markets where the anomoly doesn't exist.
The best way to get traction into overseas markets is to make our young people as economically viable as possible, then fire them off to all four corners of the globe. Some of them will retain a fondness for NZ, and make connections between where they are and those of us that are left or have come back. A well placed person in an off-shore business is worth millions of dollars of winner-picking handouts.
If you want to throw around some government (ie. yours and mine) money, what about scholarships to places like Harvard and Oxford?
I’m struggling to continue with more “ NZpatchwork economy talks” – without comprehensive structure.
World events will challenge our economy on many fronts. Unless we are not coming up with new, rather visionary ideas, I cannot see much improvement- then going again and again around a circle.
This is my last comment for a longer time – need a break - a glass of good Marlborough Pinot with a little bit homemade Buendnerfleisch in sunny Kaikoura.
Put him in charge http://www.youtube.com/watch?v=M_3T-Af57Pg&feature=related I reckon
Palm oil/rubber/timber are to Malaysia and Indonesia what Dairy/Cattle/Wool is to New Zealand. Their economies depend on it both for local consumption as well as export.
They will not allow an industry which contributes so significantly to their GDP to be in the hands of non-residents who will be sending their profits abroad.
There is ZERO chance that a non-resident can acquire land for these purposes leasehold or otherwise. In fact it's pretty hard to buy land at all unless it's a residential dwelling and restricted by size.
Malaysia for example only allows non-residents to purchase apartments valued at RM350,000 or more in the local currency. They don't want an influx of foreign money driving up property prices for lower and middle income dwellings. Nor do they want the capital outflows as non-resident owners collect rent from the masses in lower priced dwellings.
I truly don't want to offend anyone, but the typical response I receive when I describe the foreign ownership situation and debate in NZ is, "Stupid Kiwis, they're selling themselves down the river". Shortly after they've finished chortling my Asian colleagues quickly get serious and start asking pointed questions about whether or not they should consider an investment before the rules change.
Why on earth would a country which has such a limited export scope want to allow the divestment of it's primary assets?
I'm floored that there is even a need for debate. This isn't racism, it isn't xenophobia, it's self-preservation...
I'm with you on that Expat.
Would anyone care to tally up the amount of our economy now in foreign hands?
Let's see; Banks, broadcasters, retailers, mall owners, forests, tourist operators, power companies, miners, oil and gas, farmers, newspapers, trademe, brewers, Watties, roading contracters, waste operators, telecomunications etc, etc.
If it's not overseas owned it's been closed down and moved to Asia.
This isn't flash wizz bang high profile stuff - it's just the nuts bolts and backbone of our economy. I generally sympathise with the lassez fair, free market POV but honestly, we are digging ourselves a mighty deep hole with this. "This isn't racism, it isn't xenophobia, it's self-preservation..."
Indeed.
Oh bravo, finally someone has been able to sum it up. In NZ it is almost as though the country is embarrassed about itself, and so we try to cover up the insecurities by appearing to be fair to all and sundry. Well NZ, the rest of the world does not work like that, so pull your head out of your A* and wake up. It shames and shocks me what some idiots are capable of thinking then saying, and no doubt believing under the guise of the "ism's". The subject matter are simply too important to waste time and energy on explaining it to morons who can't see past their own shortcomings.
Expatriated, like you I am aghast that this is even a topic for debate about whether we should be selling out our primary and effectively only export market, and to whom. I despair
I spent some of my day reading the larger number of the posts above.....it left me clear about one thing...............FEAR.
While the level of fear displayed (by most of the discussion knockers) remains at constant anxiety..........there will be no reasoned outcomes........there will be no middle ground.....there will just be more and more and more of the same.
Fear......there is little for you to fear in discussing reforms that may aid us position ourselves for better times.........there is much to fear in not doing so......
Oh your gonna wanna talk about it after the s#%t hits the fan and we are getting FUBAR'ed....yeah you'll wanna talk about it then......cause that's the way we do things down here.....F$%k it up...try to fix it...F#$k it up ...try to fix it....oh yeah we got it sorted.....
I'll say this..... I think it might be time for me to go........I'm losing my sense of humor and I don't like it ...nosireeebob don't like it one bit.
Bravo Count of Christov : After that first sentence [ " I've long regarded you as a person of reasoned intelligence " ] ........... I realised that you've found that lost sense of humour , and are back in good form ......... Excellent !
Viva 'la Revolution !
[ do you remember Charley Farley & Piggy Malone ? Hint : The Two Ronnies .......... and a woman called Blanche who was built 'like a brick shit-house ! ]
What I am reading is a large number willing to discuss and read with an open(ish) mind and the few liberatians flooding in who are aghast at a) The possibility of losing interest.co.nz as one of the few mainstream boards they can post their ramblings on..b) the attempt at free markets is going to get abandoned, c) any regulation no matter how sensible potentially it might be...
So its simple really....discuss with those who are sensible ignore the rest...
regards
Steven there are some among them whose input to the argument is crucial to testing the validity of the points in question.
That they have chosen not to proffer any in depth input but respond in a dismissive fearful manner is what has pissed me off.
Some of "them" are better than that and so ...........ya live in hope don't ya.
I'm always up for the argument.....I bore easy with the cheap shots.
good luck to you.
Yep, as far as my husband and I can tell, the recession doesn't seem to have affected the demand for devt of new software. We studied electrical engineering/electronics so we're more interested in hardware/embedded software design and there's plenty of work in this area too (that said, I'm turning to higher level programming, asp.net etc, anything I can easily do from home at night). So for once I feel like it wasn't a bad career choice after all (apart from the fact it sounds a wee bit geeky!).
We're an unimaginative lot by and large, a good idea tends to be multiplied till it becomes a mono-culture. The best idea we have come up with for vast tracts of land is cloned pine which after two or three crops is bound to leave the soil stripped of it's goodness, and the product is shipped without any value added, the next best land is dedicated to sheep and beef, followed by smelly dairy which pollutes our waterways.
Welfare and socialism saps incentives to do better. Planning rules stifle initiave. Here we are with land, coastline, fresh air and sunshine. We need to switch from exporting bulk products to high value niche products. There's glimmers of hope, eg manuka honey etc., but where are our exports of wild meats (1080 free) niche high value products, pure oils, and extracts, and where are startups being floated on the stock exchange.
Fred. It's Fay and Richwhite. And yep - they were the heros of the 1990s making "deals in which Fay and Richwhite personally gained over half a billion dollars - at the same time as their minority shareholders lost $277 million, and which saw the Government of the Cook Islands footing their tax bills with aid money".
Historical NZ icons, for sure.
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