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Here's my Top 10 links from around the Internet at 10 am in association with NZ Mint.
As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must read today is #1 on the idea of 'rentiers' and 'productive capitalists'. It's another way of looking at the issues.
1. Rentier capitalism - Michael Lind over at Salon has written this apparently old-fashioned piece about rentier capitalism where he says the real “takers” in America are not poor people dependent on welfare, but the unproductive, rent-extracting rich. HT JH in yesterday's Top 10.
This is an explanation that we used to see a lot of in the late 1800s and early 1900s.
Not surprisingly, it coincided with the rise of Marxism and various labour movements.
It seems there are too many 'takers' and not enough 'makers'.
It's an interesting explanation for New Zealand.
Our economic strategy seems to be for everyone to be a landlord. But who will be the tenant? And how will they pay?
Here's Lind:
If we want a technology-driven, highly productive economy, we should encourage profit-making productive enterprises while cracking down on rent-extracting monopolies, whether they are natural products of geography and geology (real estate and energy and energy and mineral deposits) or artificial (chartered banks, professional licensing associations, labor unions, patents and copyrights).
This is a valid distinction between “makers” and “takers.” Unfortunately, with the exception of some leftist and liberal economic thinkers who distinguish “rentier capitalism” or “financial capitalism” from “industrial capitalism,” conventional political discourse doesn’t distinguish among profit-earning “makers” and rent-extracting “takers.” Many progressives and populists indiscriminately denounce “big business” and “the corporations” as though a productive consumer electronics manufacturer were no different than a company that monopolizes the tolls from a privatized municipal parking meter system.
At the same time, the center-left, whose upscale supporters tend to be credentialed upper-middle-class professionals, tend to ignore the antisocial aspects of the rent-extracting schemes of the professional guilds — medicine, law and the professoriate — as well as of their elite accomplices, the credential-granting universities.
On the right, the greatest triumph of the rentier interests has been to redefine “capitalist” to mean, not productive entrepreneur or successful industrial company executive, but “anybody who makes money” — a category that includes not only investors in productive enterprises but also rentiers and a third category of speculators in unproductive assets (Picasso paintings and Persian rugs, as opposed to machine tool factories).
In today’s rentier-friendly conservative ideology, somebody who makes payday loans at usurious interest rates, gouges businesses with high insurance rates, or gets paid tolls from a privatized toll road is as much a “maker” and an “entrepreneur” and a “capitalist” as someone who puts together a team of inventors, engineers, workers and investors to apply 3-D printing to printing replacement body parts. All money-making enterprises are supposed to be equally productive and socially useful, for no other reason than they make somebody rich.
2. America's dying shopping centres - Here's the FT with a useful look at the problems in America's retail economy.
Robin Amjadi has hung up “Clearance Sale” signs at her store, Design Jewelry – not because she is closing, but because it is the only way to get visitors to stop in. Across the corridor, the shutters have gone up over a boutique by designer Betsey Johnson, and a fancy United Colors of Benetton. The lighting is meant to simulate shopping under the stars, but without open storefronts, the effect is just gloomy.
3. Deny, delay, distract - The National Government's decision not to approve the Auckland Unitary Plan and instead insist on three years of consultation is causing some to wonder if the government is serious about increasing housing supply.
The NZ Herald reports the Employers and Manufacturers Association wants the government to get things moving much more quickly.
Yet again a government governs in the interests of landowners, the old and the rich at the expense of the young and the poor. And the future.
There is no doubt that Japan will fight. "We simply cannot tolerate any challenge now, or in the future. No nation should underestimate the firmness of our resolve," said Shinzo Abe, the hawkish premier bent on national revival.
After talking to Japanese officials in Tokyo over the last few days, I have the strong impression not only that they are ready to fight, but also that they expect to win, and furthermore that conflict may come at any moment.
"They are sending ships and even aircraft into our territory every day. It is intense provocation. We're making every effort not to be provoked but they are using fire-control radar. This is one step away from conflict and we are very worried," said a top government official.
5. The problem with Cyprus - Roger Bootle writes at The Telegraph about how Cyprus' problems are really just symptomatic of the problems in Europe.
Even if a deal over Cyprus is patched together without any haircuts imposed on depositors, and a fortiori if haircuts are imposed, the damage will have been done. EU authorities can blether on as much as they like about Cyprus being a special case with no implications elsewhere but people will not believe this.
Whenever and wherever the euro crisis reignites, there will be a flight of deposits out of the peripheral countries’ banks into Germany, in a repeat of the phenomenon witnessed last year, but on a larger scale. This would present the German authorities with a painful dilemma.
Could Cyprus be another Lehman’s? Or is it another Bear Stearns? The euro-zone authorities must tread warily. Intriguingly, this crisis has occurred while a much larger one continues to simmer further west. And Italy still doesn’t have a government.
6. Eurozone breakup edges ever closer - So says the FT's Wolfgang Munchau.
What happened last week is a fitting example of European political leaders, in a most unprofessional pursuit of narrow national interests, failing to defend the common good. The main risk I want to emphasise is, however, not a big accident. It might happen, of course. But I suspect the single biggest risk ultimately stems from the eurozone’s repeated policy errors. Their effect is slow but cumulative. Of those, the most damaging has been the policy of asymmetric adjustment through austerity.
Banks in Cyprus are falling now because the Greek state and Greek banks fell earlier, and because the eurozone forced a private-sector involvement. In Italy, it was also austerity that turned a recession into a depression. That, in turn, transformed an anti-euro, anti-establishment protest movement into the single largest political party in the Italian parliament at the last elections. There is a good chance that its leader, Beppe Grillo, could end up with an absolute majority if Italy were to hold another round of elections later this year.
7. Ripping off consumers - Here's Bryan Leyland at Stuff explaining how New Zealand's electricity consumers have been ripped off for years.
As a result of this flawed market and the associated "reforms" I - and others - have calculated that consumers have paid more than $4 billion more for electricity. On several occasions it has been demonstrated that the generators have manipulated the market without breaking the rules.
As a result, the market is seriously flawed and rips off the consumer. Many of the rules and regulations governing the industry have perverse outcomes.
10. Totally Stephen Colbert on the madness in North Korea.
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135 Comments
oh dear, very gloomy Bernard...
re: #3 - clearly National are not serious about housing, their pathetic efforts continue to astound me. If they are not prepared to support Unitary Plan legal effect from September, then what DO they plan to do to urgently address housing? Build a lot more state houses? No. Fund a lot more not for profit housing providers? No. Prevent, or at least tax, non-resident property investment? No.
Sigh
National are serious about housing - apparenlty we just need to keep adding undesirable middle of nowhere suburbs until Auckland meets Hamilton and somehow prices near the city centre where people want to live will come down. Hey if it works for Houston it must be good, right?
Ok, lets put this Auckland reaching down to Hamilton myth to bed:
Assume you only build south (no development to north, east or west or infill in existing areas). Distance from south of Papakura to north of Hamilton = 80km. Assume you build 5km each side of the road all the way down.
This would give you 800 sq km to build on. Assuming a generous 800 sq m per section (i.e. spawl housing) then you have 1m sections. At 2.3 people/dwelling this gives space for 2.3m people which is more than the entire population or NZ excl Auckland.
So, you could add 158% of the population to Auckland by just building along one arterial road
Like some local body politicians they are not interested in providing affordable housing or best results. They just want votes. Votes come from knee jerk appeals to the uninformed mass. In their little minds sprawl is better than intensification because there are less people directly affected who will complain. They figure the most voters are too thick to make the connection between sprawl and unaffordable housing, environmental costs, congestion and social problems.
#1 is true and tragic. it's about time somebody wrote about it. This is the service 'industry' gone berserk!
Money is not wealth, it is a 'means of exchange.' Money should not be the reason for existance of a business; sadly, money has became the most important aspect of every business, and tragicaly, also the most important aspect of most professions.
The mighty 'bottom line' rules even physicians these days. Too many people became doctors because of the money. What ever happened to the Hyppocratic Oath?
HGW
Doctors and Nurses operating on a patient in a public hospital. Although they do work for salary, it is minimal and they generally choose this vocation over seeking monetary rewards.
How about an extended family picnic at the beach? Some members of the family are musical and play live for the family.
A congregation building a church.
CO. Having served in the military if I encounter another person that has served in any situation there is an immediate rapore. This can happen anywhere anytime and applies to anyone, even if in the normal course of life you might not be natural aquaintances. There is automatic trust as that is part of the process. This is something you rarely get outside of the military and I expect few on these forums comprehends. That is the deficiency I am calling out.
Perhaps if you joined the local voluteer fire brigadge you might get something close when you have all just scraped a body off the road and return to base for a few beers.
The trust yes, I have been party to that. The comraderie is something quite different though. Perhaps if you helped your neigbours do their hay and a bunch of them in turn helped you , then you experience my initial point of a team of people working towards a common goal but not for direct reward. With the military everything you do is a collaborative effort, you have to or you don't meet the objectives. Basic training is the defining difference. It is only once you come out the end of that, that the bond of common purpose is forged.
Scarfie - rural communities are achieving this all the time. I'll give you a few different scenarios to chew over. Try a bit of snow-raking, floods, droughts, sick neighbours etc. Neighbours and communities all come together. Earthquakes here in Chch were a classic example of people coming together in a collaborative situation. The Farmy Army and the Student Army were two groups who gained media attention. However there were numerous people who acted as individuals to help and assist others. I know of people who carted in water from miles away and drove down the street delivering. Other people brought in hand sanitisers and as many plastic bottles as they could source. Some people opened up their homes.
I think the colloaborative effect and the common bond purpose that you talk of is probably in just about every voluntary organisation, club etc across the country. Volunteer Fire Brigades and Ambulance services are an example.
I was once in Christchurch airport when there was a rather large and long aftershock. It was in the 5's. The airport came to a stand still. I was praying that people would stay calm as I knew once someone panicked the whole damn airport would panic. Everyone was pretty good and then this damn soldier got panicked and got to his feet he was really agitated. I was annoyed with his lack of discipline so sometimes all that training and all those objectives don't forge a positive common good purpose.
IF I had the money to buy a string of top quality potential dresage horses from Europe then we would use our establishment to help train young riders to represent NZ at top level (Olympics).
We even have the resident instructor (shortlisted Olympics for GB) and working unpaid in the sport for various organisations.
Money is a means to an end; it is as necessary as Oxygen! and incredibly important when you don't have enough.
Sigh...
Money SHOULD NOT be...
A shoe-maker business' value is in the shoes he makes; how much money he makes is how we rate his success as a business man. Indirectly though, how good he makes his shoes determines how much people are willing to pay him. But his worth is not how much money he has, but how good his shoes are!
Good quality makes a good life. Is it any wonder we have such poor quality products today.
HGW
I recall reading somewhere (I think it was Sweden) government labour laws were set up such that all persons on entering the workforce for the first time recevied the same wage for their first five years. So it didn't matter whether you were tertiary educted or not, for how long or in what field - all new entrants to the workforce got the same wage in their first five years of working.
What I assumed the purpose of this policy was - was to allow for an equal opportunity for all to accumulate assets (get a 'stake' in life) in their first five years in the workforce. I thought it an interesting concept in egalitarianism.
Not at all, notaneconomist!
All I am saying is starting a business with the sole purpose of making money has less intrinsic value and less chances of succes than a business which was started to fullfill a need other then making money. Many people devote their lifes to endeavors other than making money and they seem to have a happier and richer life than many moneyed business people. Not to say these people did not make money, they did, it was just not their main reason to go into business.
Hope that helped and my appologies again if I upset anyone.
Sincerely,
HGW
HG - I'm certainly not upset by your comments.
If business is not filling a need then it is more likely to fall over. The need is the demand the business is the supply to that demand.
I have found in life and business that if I'm making money and have that side of life taken care of then I have more time and money to help others as I do not have to wake-up every morning thinking I've got to make a living first to get through the day, week or month.
I think it is safe to say that most people are driven out of their beds each day to make money because they don't have enough of it for their needs. How many of these people plan, set goals, take a few risks, learn something new or generally just go out of their comfort zones?
We have the choice in life to play the victim or get going. Nanny State loves Victims it is how it keeps the power over the people.
The Rentier model does seem to reflect modern accounting advice where accountants look at owned property and value it at current market values, rather than what it actually cost, and then claim the return on it is insufficient causing it to be sold because the model they use then allows any rent to be a tax deductable expense. It is easy for landlords to put up their rents, justifying a required return rate. The changes in value can look good on a company books when they are going up without any real increase in value being generated by operations. Thus the model is a money go round not producing any real value.
To support manufacturers we should be looking at products and returns from them, become an exporting economy.
#1. Exactly what I have been saying for sometime, good to see you address this Bernard. As you rightly point out, I am only repeating what others have said before me.
The trouble is that industrial capitalism is still results in unearned income, it is just a lesser evil.
The perfect system of controlling production has yet to be invented, but when it does it needs to have the prevention of unearned income at its core.
Mist - you still have the same cranial blockage.
He's not talking on 'unearned income', he's talking of doing something because it has to be done. I've lived like that for years, just finished an unpaid week of just that. I get it back - in other folk doing the same for me when needed, and in the satisfaction of having done something for someone who needed it.
Giving delivers a lot more real satisfaction - Dickens nailed it with Scrooge.
But 'income' is 'expected purchasing ability', and the underwrite for that is failing. Cyprus is a symptom, one of many. This is a paradigm shift, and it looks like some mwedia are starting to wake up.
\Not or Nats, though. They're between a rock and a hard place. Can't deliver what they have to promise, don't dare state what;s in store.
Charles Hugh Smith covers the key points well in Net Worth versus Net Value:
Colin, have you seen this:
http://www.unlisted.co.nz/uPublic/docs/snlf/SFL%20Investor%20Presentati…
We can't see any P&L for 2013 year (the current one) although a payout of $5.40 is mentioned earlier. What do you make of it?
We think a 2013 yr would need take into account the increased debt shown as PF 2012 (but 2012 over, so no need for ProForma - if that is what it is?).
Asset side Valuation they say using comparable sales method, (we prefer productive given size and what the Swedes did with Harts land).
On the valuatiuon page BV with the higher val figure, what do you make of the LVR, we got 69.5% (we didn't understand how the the target was arrived at (how the debt reduced)
The valuation page uses 2012 payout price for the equity return. The 2013 reduces EBITDA by $3.2m, Q, whats my interest cost on $135m at 69.5% lvr? would it add $3m+ to 2012 interest cost?
#1 The key point is this one.
On the right, the greatest triumph of the rentier interests has been to redefine “capitalist” to mean, not productive entrepreneur or successful industrial company executive, but “anybody who makes money” — a category that includes not only investors in productive enterprises but also rentiers and a third category of speculators in unproductive assets
Is income derived from currency speculation as "worthy" as income derived from manufacturing or farming. Is such speculation from moving money around really capitalism or just financial chicanery?
Even the darlings of neo liberals, Adam Smith and John Stuart Mills, railed against income and wealth derived from no physical effort. Smith was a proponent of both land tax and inheritance tax.
Nothing wrong with capitalism per se. Financial bankster capitalism is a different story.
It is an interesting subject, pity the article is so limp. How exactly is he going to make his useless little screens without the oil for his plastics and the metals for the ingredients of the components? Duh. Mineral extraction is creative and it is manufacturing. The iron that makes the steel in the chair I am sitting on is the result of some very clever engineers, geologists, management, hard working truck drivers, miners, and financiers (not to mention road builders, port builders, ship builders, ok, you get the idea). Mild steel doesn't just grow on trees you know.
To me one set of issues is about what makes a good owner of assets. Another is that the more sophisticated criminals target the wealth where it is most concentrated using means that are not criminal in law.
I would suspect that if a case was prosecuted based on criminal law then there would be some successful prosecutions. Fraud is basically reprensenting something that you are not in order to gain a pecuniary advantage. What about the creation of money doesn't fit that?
#7 Leyland makes a good point I think about how the wrong competitive model was chosen. We have ended up with multiple generators and multiple retailers as well as a separate transmission entity, all with their own Head Office, executives etc essentially selling us the same essential product. How can this be more efficient for the economy and consumer than one efficient entity supplying the electricity at cost plus a small margin for future development and maintenance?
The electricity deregulation has led to anomalies like this which mirror Enron and the spikes in Califoria's market
This gives a good summation of the idiocy of the deregulation
http://www.stuff.co.nz/stuff-nation/8214151/Lets-rethink-our-electricity-industry
An academic recently worked out that at current prices from our generating SOE's, consumers could be getting 300kw a year free in lieu of dividends to the government. Soon those dividends will be going to private shareholders.
Sadly Douglas and Lange imposed a neoliberal energy model suitable for a large country, not a nation the length of the US Eastern seaboard with civil work resistant terrain, housing a far flung taxable populaion the size of a medium town in the US or UK.
The so-called private sector competition didn't wish to undertake the cost and effort of renewing or extending difficult infrastructure placements for so few inhabitants - the profits were to be gleaned from old ever higher re-valued infrastructure paid for in the past by the state, until NZers inability to pay for the upgrades became glaringly clear to all.
The irony of privatisation of public infrastructure is that the only way it can work and make a profit for the shareholders is for the state to build it originally and then sell it cheaply. No private company would build a road, railway, port or electricity grid from scratch and make a profit. PPP's are touted as a solution but they require government underwrite otherwise too risky under normal commercial criteria. Even then many fail and have to be bailed out
Chorus exhibits all the symptoms, even down to the cheap government finance.
http://en.wikipedia.org/wiki/Crown_Fibre_Holdings
http://www.stuff.co.nz/business/industries/financial-results/8347193/Ch…
http://www.stuff.co.nz/business/industries/8273596/Chorus-engineer-Dyhr…
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=108…
http://www.stuff.co.nz/business/industries/8259848/Chorus-pushes-to-kee…
http://www.stuff.co.nz/business/industries/8278183/Chorus-welcomes-fast…
To the contrary Stephen H...it is the lack of genuine opposition that should be the cause of your astonishment, as it is not that hard to why a turd in an Armani, though no less a turd, at least applies some spit polish to his facade before courting public opinion.
While I have respect for Russell Norman, it does bother me an intlligent , articulate man has not yet recognised his party has an image problem firstly, and secondly clear agenda priority problems within his ranks.
Back to the Turd...people get what they expect...the normalisation of lying while in public office....the promise of meagre inducements in return for their vote......the promise of a brighter tomorrow without ever asking........ brighter for whom...?
the difference between you and them is that you suspect the average IQ of voters is low but , can't be that low..! ....they know it is.
God my bloodly dyslexia is playing up something fierce today....edit edit edit aw gees.
"secondly clear agenda priority problems within his ranks."
Which is why I left, they are now the Alliance and not the Green's they have turned into pork barrellers like the rest. Just listening to them (still) makes it clear they really dont understand maths...they are no better than the right wingers, ie both think the planet is inifinite...
regards
Yes Stevo ...that is true...the agenda has been obscured, perhaps hijacked, but there's that opportunism again at work.
However if it were a ploy to gain the confidence of the middle ground in terms of their economic credibility....it would be a welcome ploy retreospectively.
Is it not , just what Key has done..? gain the mandate to install the agenda, gain the mandate to continue the agenda, distract (with some help from natural disasters I might add) the voters attention from one very simple agenda
one very simple forgotten agenda
one very simple taboo agenda
Privatisation.........the agenda from the beginning and how to go about it's acceptance by those who found the word unspeakable.
The doors kicked open, in walked the Turd in the Armani saying, "now boys, that's how it's done, convince them they want it, they need it , then just ...do...it..
Applause from the collective excrement assembled at the bowl.
Well that sounds enough to get over the line with Roger......you may have cause to be ...actually...concerned if Peter Jackson decides to run for office......then you'd see a real IQ turnout.....might even give the 50% a nudge.
Hey......what did the second time KEY /Nat voter get on his IQ test...?
SALIVA...
Stephen,
Perhaps you might want to check out this article in the Sydney Morning Herald. http://www.smh.com.au/comment/nz-shows-trust-is-key-to-popularity-20130…
An Aussie's view on why Key is so popular.
I see there is a comments section....
John Key is by far and away the best PM we have had in my lifetime, possibly even the history of NZ. He is polling high because his govn has positively effected real Kiwis lives.
The fact that far left liberal nuts like yourself hate him makes me like him even more.
John Key is by far and away the best PM we have had in my lifetime
For context, what decade are you in?
Follow up question: have you been outside New Zealand and begun to develop an understanding of how truely woeful most NZ politicians are.?
The fact that far left liberal nuts like yourself hate him makes me like him even more
So by that logic you would be loving Hitler I take it?
..... and in 2001 Helen Clark signed away Kiwis' rights in Australia , turning them into second-class temporary residents .... and making it extremely hard to gain citizenship , where previously it was a right ....
She's correct , all patriotic Kiwis should stay home , not venture offshore from their homeland ..... Helen showed us the way ....... stay home , and live exactly as she deemed appropriate ...
.... except that when she got booted out of office , she cleared off to New York City for a nice little sinecure at the U.N. ........ ooooops !
..... and yet , Australians' retain full rights in NZ , if they wish it ...... full residency automatically , or even citizenship , tuition paid for education , health & dental coverage , ACC coverage........
Yup , they bowled us another under-arm delivery ...... Cobberdiggermate !
Have you ever been to a true third world country ?
..... if you had , you'd know better than to compare a rich nation such as NZ , to them ......
Are you just fishing for bites today , 'cos Easter is so bloody boring ( until 7:30 p.m. , when the Highlanders flog the Aussie Reds ....... wonder if steven will be in Dunedin ? ) ...
John Key is by far and away the best PM we have had in my lifetime, possibly even the history of NZ
One hopes you've lived here your whole life, to be able to make such a statement. For some reason, and I don't know why, but newish Chinese immigrants blindly support National, as if it's required, like mindless drones.
S Hulme
a neoliberal energy model suitable for a large country,
No. The energy model wasn't suitable for any size country. The Muldoon bunch actually understood what was coming - I disagreed with some of their moves, but not the reasons for.
You still don't get that energy is everything, do you? Still see things in $ terms, even though the writing is on the wall in capitals in Capitals. Someone will write the history of Labour in this period, and it won't be flattering. Mind you, the concurrent history of National will be a sadder read.
You get the bit where the mass are underwriting the trickle-up, though. Not a sustainable source of revenue, methinks
"How can this be more efficient for the economy and consumer than one efficient entity supplying the electricity at cost plus a small margin for future development and maintenance?"
But if there is only one entity supplying the electricity - where does the motivation come from to ensure that it does so in an efficient way?
That model appears to rely on the goodwill and conscientiousness of the management and workers of the single power company. Certainly the world would be a fine place if there was more of that about, but human greed and laziness are more reliable and powerful forces.
Depositors too slow in Slovenia....risk being Brusseled....http://globaleconomicanalysis.blogspot.co.nz/
Anyone still think owning bank shares or buying bank bonds are good risks to take!...http://globaleconomicanalysis.blogspot.co.nz/2013/03/german-economist-proposes-one-time.html
Why do you think so many OAPs are running around like headless chickens demanding their deposits are guaranteed?
a) No where else left to go.
b) Everything else is too complex to understand and almost certianly too risky.
So they have pillaged the planet of all the good, cheap resources leaving little for the following generations and now expect the following generations to bail them out with yet un-earned returns whose size is based on there being more good and cheap resources, which there isnt....
regards
Headless chickens they are, Badly burned by their poor investment strategies that consisted of lending to every financial company to "spread the risk"...oh dear, now hiding in bank deposits.
Maybe you have not listened to the sound bites on how shocked they are that their money isnt 100% safe.
Offensive? how about immoral that they have taken and wasted huge one time resources and now want whats left by leaving the next generations their debt. Maybe you should consider how offensive X and Y find that.
Or how offensive I find it that I as a tax payer have to bail out other ppl who are not taking adequate care.
regards
Or how offensive I find it that I as a tax payer have to bail out other ppl who are not taking adequate care.
Well there are no shortage of offenders in all age groups -particularly those amongst us that believe they have a right to exercise their prowess to the detriment of the rest. Think Solid Energy as a recent example.
On number seven, it is not the market that steal from the consumer; it is the producer! And the intermediaries.
A few years ago an investigative commission found no collusion existed, and pricing was fare, hence no regulation requiered.
What a joke... Except it isn't! It's a travesty... MRP anyone...?
HGW
Mist - you still don't get it.
That mower was constructed using energy, via work.
The 'more' would expect that another lot of work/energy had been used to supply whatever the 'more' was. Even the manual labour is an energy equation - you jus ignore it because you don't value the energy at any more than the extraction 'cost'. In other words, your valuation system is/was wrong, and was in trouble the moment the real underwrite failed to supply.
Capitalism only worked while the energy was available. Altruism does too, ultimately, but it outlives those who think in terms of 'more'.
........ peak lawnmower atoms ? ....... OMG , say it isn't so .......
Gonna have to plant me new lawn with Bernard Hickey's patented Suicide Grass (TM) .... ..
...... it grows almost high enough to reach the sunshine , comes over all depressed , and cuts it's own head off ...
PDK I thought I you when I read this link from AndrewJ the other day. Mind you I check in on Golem every so often to see if there is anything useful. This one is a first class read.
http://www.golemxiv.co.uk/2013/03/the-slippery-grip-of-growth-guest-pos…
It discusses the problem consistent in Mist's arguments, mythical inputs.
But like I elude to above there is a cognitive step missing for most here when it comes to understanding concepts like collaboration and goodwill. The capitals profits from the goodwill of others particularly those who provide goodwill as part of their vocation. Police, nurses, firemen, military and even teachers.
The moral problem with the capitist model that Mist outtines is that the capitalist seeks to gain more energy from his lawnmower than is embodied in it. That requires infinite growth which can't be sustained.
Quite a good post Mist. Can't quite see how it links to your previous ones, but hey.
I can see in there hire by force, reward and coercion, but I am still not seeing collborative effort where the reward is shared. I guess in the modern idiom you could say socialising the gains as opposed to socialising the losses, but not quite.
Mist, your being trolled. Powderdown, HG, Scarfie, etc troll this site almost daily. They know this site has a predominately right wing audience so they get on here and spout as much liberal, left wing agenda as they can. Half the time it's copy and pasted from the day before.
Actually unearned income is quite a simple concept to grasp. It only causes problems for those with a vested interest. Or taken further a sense of entitlement, so the left wing barb is a bit rich.
Just remember unearned goes across the board. It is neither left or right as they both do it, just by different means.
As I say, it really isn't that hard and hardly obscure. Plenty of classical western philoshphers have commented on the topic in various forms. But as I have pointed out before, because you have skin in the game your perspective is distorted.
http://en.wikipedia.org/wiki/Unearned_income
To classical economists, with their emphasis on dynamic competition, income not subject to competition are “rents” or unearned income, such as incomes attributable to monopolization or land ownership..........Rental income;
Unearned income has often been treated differently for tax purposes than earned income, in order to redistribute income or to recognize its qualitative difference from income derived from productive work
Seems to me Scarfie (as have others before of course) is pointing out the obvious fact that earning income from labour is different from earning income from ownership. Are you about to show us the mountains of proof that they are the same? Go on, we are all prepared for a good laugh then...
I am afraid I retain the option to simply ignore everything you claim when you (as is typical) stray off topic and start making the usual wide ranging completely false assertions about various unrelated topics, but go ahead, we are listening...
There was an interesting comment on the traditional thought of the "war" between labour (workers) and capital (ownership) This said that the 3rd, the bankers in fact were at war between both and that both labor and ownership were losing out. Take a look at rich ppl today, how many are owners of productive businesses and how many hav got rich through various financial ways.
Id suggest that over the last 30 or 40 years the bankers have won.
regards
I like the clarity that you and Nic bring to the table :-) I totally agree and see the battle as being the right to be the beneficiary of the unearned income. In the western world this battle has included Kings, Churches and the Merchant class. The 20th C was where the bankers took supremacy, perhaps even before that in England. The 19th C was a good one for the Capitalist in the USA but in the 20th I see that they switched from being a net producer to a net consumer. When their military power and empire grew enough for them to extort (for want of a better term) Capital from the rest of the world.
Seems to me a lot of bull is commented here, most debate seems to be based on the assumption that you can just make up facts without any relation to reality.
To cite a non mist based example, Brendon wrote an article about how councils are causing house price inflation. The entire article was based on an assumption that if the councils somehow got out the way (actually facilitated would probably be a better way to put it) of the market, then there would be no housing bubble. Whats that based on, well its based on a model of a housing market where nobody earns income by flipping houses to each other, hmmmm. In fact I think we all know that happens, so why wouldn't that be the dominant factor in the inflated housing market. In other words his entire article was scapegoating council staff, for something they could not control or I think even significantly influence.
Yes.....and mostly far right wing bull at that (if only that the loony left dont post on here). The problem or maybe its the indicator on the quality of the opinion is identifying the political axe being ground. The easier that is to spot the more worthless and un-substantiated the opinion is IMHO.
regards
I think actually that classical economists were not so wrong about this dichotomy. In the time when these ideas were developed capital was more land than money, and this has changed. Since then, especially with the development of the corporation, the balance has shifted but I think the same argument may be made.
You can also observe that with developments in technology some management is probably more necessary than during the industrial revolution. This seems reasonable, because at that time technology was more simple, and if you could operate a tool then could probably comprehend the whole production cycle. Of course as technology develops this becomes slightly less useful, so some management is probably a valuable contribution. I don't see that as an argument against similar notions to Marx however that the management should be part of the production cycle rather than from a 'management class'. You would probably feel the same I guess if you have ever been managed by somebody who is in over their head.
"I guess if you have ever been managed by somebody who is in over their head."
LOL, only 35 years worth so far, ever read Dilbert?
Kind of come round to the view that life is too complex for many ppl to manage. So we have to specialise and to a degree that makes us in-adequate in many other areas that are important to our lives without specific effort. Probably most ppl can handle being good in maybe 2 specific areas at once, want a new area/skill and one will drop out of competance.
regards
I think one of the comments was you are one of the few who can mostly justify your writings. Though sometimes I think you get the odd off the cuff austrian/libertarian brain fart...
;]
What you miss of course when you talk about the "betters' is really ppl who have managed to benefit the most from wasting / consuming one time resources that would have been better left in the ground for our children and grandchildren.
regards
No, you told me you had new definitions for some common terms. At this point I don't know what you are thinking and I told you as such. The question was clearly rhetorical, for some reason you want me to guess what you are thinking, I declined as I don't go in for psychologising. I suggest you stick to a conventional definition of Capital,
http://en.wikipedia.org/wiki/Capital_(economics)
This is broad so I would say further that I tend to think of Capital in broadly the terms of Adam Smith, its something used during the production process and I would include forms of land though they might need to be laboured apon first, such as farm land which has been prepared.
But since you informed me that capital had nothing to do with property, it was clear this was not the definition you have. If I understand your definition of capital correctly it has another word which is more appropriate, Skills or Abilities.
In fact the reason for this distinction should be obvious, the labourer carries their skills or abilities with them, the capital on which they labour is not (typically) their property however and this obviously makes the labourer dispensible or substitutable to the capitalist.
Your personal anecdotes never disappoint.
He must maintain his body and mind to be able to focus and complete the task he has agreed to do.
There is where your argument falls over again, the implication of some sort of force or coercion to undertake the task. The direct implication of that is someone else profiting from his labour, therefore unearned income. Conclusion from your comments is then that capital results from unearned income.
I see you can't even form a coherent postion on capital though. You view contradicts the description at wikipedia linked to by Nic.
Yes, I think we have heard enough of your personal anecdotes to understand the sort of example you set.
Parochial colonial? You are obviously looking for a pigeon hole for me, keep looking.
As for calling me a Troll, well this appears contradictory to the meaning of the word to me, because I genuinely do believe what I write of course, and am not otherwise a fictional creature of Norse decent. If you are going to simply make up the meaning of words then you may as well post in Turkish, this has about as much hope of conveying information to me.
http://www.urbandictionary.com/define.php?term=troll
Then there is the Trolling vs Sarcasm
Trolling can be inciting rage etc. The deliberate put-down to invoke a response.
Trolls tend to not stick to topic instead preferring the personal attack and put down method.
Poor debating skills, inability to discuss topics rationally, childish beliefs/ thoughts etc contribute to the bad behaviour expressed by trolls.
They revert to sarcasm and personal attacks as a disguise for their lack of knowledge and experience.
Mist for all that education, SOHK or otherwise, the politics of all things in business , from Govt to Corporate to household will determine outcomes for both better or worse.
The politics will more often defy reasoned thinking to achieve the agenda's of the few.( the trickledown effect causes me to laugh hysterically)
The unfortunate reality that personalities can command their intellectual betters is seen everywhere everday.
The unfortunate reality of those entering such orgaisations with altruistic motives to bring about change for the "greater" good is, all to often they become absorbed in the process, untill the process is all they have time for, not to mention the inevitable shift in their values once submerged into the environment.
I'm not here to join the catfight, just to point out there is more to what contributes to success in life than just academia........the ability to roll with the punches is one such attribute.
How's that Forex treating you...?
asked you twice already....left me to figure I was out of the loop.
Stay Well.
oh P.S. mist, I justify the above through observation over the better part of a lifetime , and that, after all is the basis of science itself.......sooo it's considered a conclusion, where opinion may remain divided due to sustantiation protocols academically speaking.
Different thinking processes have an influence here I suspect. Mist my guess is that you are an "NF" type so are capable of brilliance on occasions but then your melancholy disposition means your arguments are sometimes manic. As an NF you are at a great advantage over the "ST" types, who don't really know anything except what time lunch is (typified by PI's). However full understanding of the world eludes you as it does an "NT" Rational such as Count Christov, Nic, Steven, PDK and quite a few other regulars here.
Would love you to meet my Auntie Mist as she would defy your analysis. She always seeks to help others and despite being a lowly pensioner still gives money away to those she perceives of greater need than her. This is what makes her happy, and she is happy.
I think your Auntie is basically very common. Most people enjoy to do things for others munificiently, its easy/trivial to justify a self belief of goodness by doing favours. Its harder to justify selfish behaviour, and commonly involves some manner of self deception.
Unfortunately, work which we spend most of our time on, is organised around basic principals of selfishness, acting in self interest. Whatever the natural balance of human nature, the institutional structures do drive people towards selfish behaviour in this form of organisation.
oh now there Scarfo, my happy comes in bites, it varies in quality and length, but I do know what it is....as there will be a point at which I will peer backward at my show and prolly say , overall ....a good show,, cest la vie.
Yes and helping others for no other reward than making their lot a little easier, a little more certain is always worthwhile.
I was surprised to see your Aunt was named mist too.....but she sounds a lot like my wife.
You don't have to be lowly anything to be generous with your time and thoughtfulness.
The irony is that an iNtuitive person can comprehend a Sensing personality, but not visa versa.
It also hightlight why you ask the wrong questions of my Aunt and totally miss the mark. You assume she has lots of disposable money despite my clear implication that she is a pensioner of modest means. It is that modesty that allows he to see that what she has is still surplus to her requirements. Imagine earning less than $10K per year and still giving some of that away Mist.
And that about sums up your economic views of the world and why you have no credibility. You trade currency and believe the efforts you put in justify as work and therefore a reward.
It is no different to if you sat around the poker table, winner takes all. Yes you take risk, yes you put in mental energy to win, but ultimately you expect others to reward you because you take risks.
If you want to take risks bugger off and go parachuting, don't involve me in your wealth grabbing schemes.
Cheers for the response Mist.......extreme caution out there , as the Euro debacle is going to be the biggest downtrough event in carry trade history, and it will occur just a confidence is restored.
Again the politics of things , Mist, there is a lot of hatred building up against Germany in the E.U.....with I'm sure vested interests courting a block split from the E.U. for a safer exit.
Merkel and La Garde may think they have the reigns....for now.
By Jove I think your seeing it......Mist....or at least an important component of it, I've got posts on threads here dating back 18 Months on the little ground zero Fed game....so it's not a sudden event , rather a position that has been crafted over time........
Of course it would be an exit strategy of mammoth proportion, and not one that can be refered to as intentional in strategic terms , more a byproduct or an unintended consequence......with Ben putting on his best innocent face.
But ...............there is always that unwanted counter postition, like a mini war over a piece of forgotten rock.......China's ace in the hole.
Happy123 - I feel sorry for you. So sad to be so wrong.
Take it from the top: change is inevitable. On that basis, clingers-to-the-existing (conservatives) must always be wrong, at some point. 100% guaranteed.
Darwing vs vested interests (church) is a classic. New knowledge vs need to believe, or need to prolong a belief, which underpins vested-interest incomes.
This isnt about left vs right, green vs red or blue - that is a denial in itself (or a spin).
This is about real things - physics - real limits, real overshoot of a real species. Misty-boy frustrates me in his coninued money-speak, but he and I are individuals, debating.
You.I suspect, are not. :)
If you ever had any doubts before, they should be dispelled over the coming weeks and months.
The guts of that ZH article is opacity, loopholes, the ease of defeating the shutdown
I have been bleating on ad-nauseum here on interest.co.nz about the huge flow of foreign funds through NZ everyday. $20 billion daily. Nobody in the public domain knows where it's coming from, where it goes, and how long it stays
It's easy to imagine there will be a lift in inflows of hot-money into AU and NZ in the forseeable future.
Kimy - people just plain old don't understand about the Approved Issuer Levy regime.
I know you keep mentioning it but only a few who post on this site are in business and understand the tax rules.
The hot money is going to keep pouring into NZ and NZ business are going to have to keep paying and paying and complying with every damn Government who gets into power.
Sorry for the rant it's the shitty time of the month when I must complete the GST and then to top it off I was doing an Annual Return at the Companies Office and they have decided they will charge a $45 fee for me to visit their site and do the work. Bloody revenue gathering bureaucratic costs of being in business.
Oh yes and top that off with the outrageous charges of $465 to do your Growsafe and Approved Handler Certification and it only lasts 5 years. Its a one day course - completely ridiculous. And I bet all that foreign imported pork that they want to unleash on the dim consumers wont have approved handler operators looking after those pigs.
Kimy - good on you for writing to Bill English on this subject. Some people would not bother with taking the time to do this.
Have you written to the RBNZ and Treasury on this issue? They probably wont take much notice but it could be worth a try. Cheap money has been flooding into NZ for quite a long time we know what has happened here in NZ because of this.
All the markets are skewed by implemented policy and and legilsation. That is why I loath large bureaucratic Government anywhere they are incompetent and manipulative and it is the taxpaying citizens who end up suffering in the long term.
The fact that Bill English indicates that protecting the Bond market is a priority, pretty much tells the whole story.
The OBR Policy sends a clear message to depositors, Depositors here in NZ need to ensure they are not exposed. If the OBR is the best the RBNZ could come up with givin they are tasked with financial stability then I think many in that bloated headquarters should resign.
The covered bond holders have protection and shareholders can obtain protection by the use of "puts". While puts are expensive they are an insurance in turmoil and most large shareholder investors will use them to protect their investment downside. I would imagine that large off-shore depositors exposed to the NZ banking system would also be using the Options market for protection if an OBR event ever happened. These people will ride the market down and ride the market back up without barely blinking and while NZ resident depositors will be carrying the can once again.
Someone is always getting squeezed and it is usually the residents and we all end up having to contribute to the mistakes.
Thanks for the link Kate. It is a pity that the authors only looked at one component and the effects of that one component. The information is useless on its own.
The AIL behaves the same way as a direct subsidy on any product.
Interesting thing about subsidies is they hold prices artificially high. When you remove the subsidy, prices find the true market value.
In the case of the AIL most of this tax advantaged money has been borrowed and invested into housing which as we all know has driven prices higher.
As the house prices have increased so has the bureaucracy and costs of Councils been allowed to inflate to enormous levels. The filtration through the markets of this original subsidy is enormous.
If the markets had been left alone and allowed to do what markets do best then the issues we face in NZ would not have happened.
The fact there has been so much interferring in the economy suggests that the world markets were in turmoil early 2000's and normal deleveraging and deflation were not allowed to take place. And even worse new products and inventions were not developed as would normally occur when an economy is squeezed and people transfer to new areas.
The interventionist policies that have been adopted around the globe all have the same issues in common.
The natural market cycles were not allowed and so the market could not transition itself.
"Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next".
http://www.telegraph.co.uk/finance/debt-crisis-live/9953844/Cyprus-bailout-live.html
And one other thing to note...some depositors with the failed bailed Cypriat banks..will escape the theft...pollies anyone!
"The head of the Cypriot central bank has said that "superhuman" efforts are being made to open the country's banks on Thursday."
http://www.bbc.co.uk/news/business-21940060
That's how long it takes to clean the transactions, that shift 'special friend's' out of the system...leaving mugs and locals to take the hit.
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