If National wins ...

[elZorro]

Don't really want to get into the argument uu, having not followed this thread closely, but you're question got me thinking.

Fifty years ago, as a kid, I swum in the Waikato River opposite the then operational Meremere Power Station. It didn't kill me, but my Mother would have had she known! The water was always clear then. Twenty years ago I paddled that river from Cambridge to Tuakau over 3 days, with a group of Venturer Scouts. We had to lay down some pretty strict rules with the kids when we realised it's state, the other option being calling the trip off.

Almost every time my paddle hit the water I wanted to cry - the water was filthy, the flow pathetic. In fact there were areas we had to drag canoes over, amongst much rubbish. To see a once beautiful stretch of river reduced to this dismal state is devastating. I don't have the answers, wish I did. So much for progress.

Thanks for the post Karen1, my father swam across a clear Waikato River about 55 years ago, just a bit further upriver. The water quality degrades the further down you go now, easily measured with chemical testing. I was doing some flyfishing out the back of Te Awamutu a couple of years back, and the farmland stream held good trout and was clear. But we came around a corner and there were drystock standing in it. This was apparently normal policy for the farmer concerned.

Stock are still being grazed right up to the edge of the Waikato River. Occasionally stock and farm pests 'fall in', and decompose on the edges, providing eel food. This is the same water that is piped to Auckland, guess it is cleaned up before going into their system....

Tainui are intending to clean up the Waikato River and replant Kowhai trees all along its banks, with the new govt funding. Sounds like a good idea.

[fungus pudding]

http://www.nzherald.co.nz/business/n...ectid=10776792

So is this good business? Selling off your cash cows? Would an investment company sell off its best performers? Nope, they'd sell off their worst! ... National really need to come clean with numbers that suggest selling off the family silver is in our best interests.

For a start the Govt. is not an investment company - it's a government. The average annual returns from these things over the last ten or so years has been 2.3% according to one analysis published, from memory, in the NBR. If you really think they are so wonderful - there's a golden opportunity coming up for you so you should be thrilled.

[elZorro]

For a start the Govt. is not an investment company - it's a government. The average annual returns from these things over the last ten or so years has been 2.3% according to one analysis published, from memory, in the NBR. If you really think they are so wonderful - there's a golden opportunity coming up for you so you should be thrilled.

It would be a hollow victory if the only way they increase profits for shareholders is to increase power prices FP. Can you please dig a bit more and find the actual data please? I'll bet that it's better than 2.3% average over 10 years. Especially if you use depreciated asset values.

Here's the latest on R&D in NZ, not looking so good, but the National spokesman has put a positive spin on it. http://www.nzherald.co.nz/business/n...ectid=10776752 Businesses will pay just enough to keep workers, i.e. keep pace with inflation, and forget about R&D for a few years to increase short-term profits and hold a safety margin. That is the message National has given them.

[elZorro]

What water ways do you want to use that you feel like you can't use, Ez?

Hi UU, I just think we need to keep an eye on such things. http://www.stuff.co.nz/business/farm...olicing-woeful

[fungus pudding]

It would be a hollow victory if the only way they increase profits for shareholders is to increase power prices FP. Can you please dig a bit more and find the actual data please? I'll bet that it's better than 2.3% average over 10 years. Especially if you use depreciated asset values.

Here's the latest on R&D in NZ, not looking so good, but the National spokesman has put a positive spin on it. http://www.nzherald.co.nz/business/n...ectid=10776752 Businesses will pay just enough to keep workers, i.e. keep pace with inflation, and forget about R&D for a few years to increase short-term profits and hold a safety margin. That is the message National has given them.

Feel free to dig all you want. I can't be bothered. Suffice to say power prices prices will increase dramatically regardless of ownership, not just in NZ, but throughout the western world. Demand for power is rising fast and new generation costs heaps. Huge capital required.

[elZorro]

Here's a post I do agree with:

People say "who cares who owns the power companies? The State-owned ones behave like bastards anyway". True, but the solution is not to flog them off to a private owner but to enact a policy that SOEs supplying an essential service actually be a public service rather than profit-obsessed corporations, which are publicly-owned whilst exhibiting all the worst characteristics of privately owned Big Business corporations. That requires a political decision to change the business model of those and other SOEs from profit to service. Now there's a radical concept - but it was the status quo in NZ until the 1980s and 90s. The country's electricity system existed to ensure uninterrupted supply of an essential service, at cost.

From VOXY site. National are selling off state assets for ideological reasons, not to pay back public debt, which is at reasonable levels. It's private debt which is a bit high.

FP: frankly disappointed in your thoughts there: I'm sure I read somewhere that 67% of National voters had below average IQs, but above average incomes and self-preservation instincts. I could keep on adding comments all day.

It was Ernst & Young who were commissioned to provide an independent valuation of all the SOEs in terms of profit. However, the document is hard going, I saw a synopsis of it but cannot track it down. Here is the original. http://www.comu.govt.nz/resources/pd...-epa-nov11.pdf

Not happy with ROIC (normal return on investment capital)data, they subtracted from this the weighted actual cost of the capital (WACC), which is a bit ripe considering it's taxpayers' money. As this was around 6-7%, it dropped the 'returns' (called EP) markedly. Meridian (the standout) has paid dividends of up to 600 million per year, while posting profits of usually less than that. This would erode capital in the SOE. You can make these statistics look as bad or as good as you want, but an old concrete dam and turbines producing power for about 1c cost per kWhr and selling it for over 20c + GST has to be doing OK, even if 50% of it is lost in transmission.

[elZorro]

Maybe Colin James is a Labour voter too. Anyway, I usually agree with his articles.

Colin James's column for the Otago Daily Times for 10 January 2012


When the good don't speak out against the bad


The rest of the world would respect Islam more if it more often heard decent Muslims condemning Allah-invoked murders of innocents. There is a lesson in that for those who value capitalism.

The human purpose of religion is to bind humans in harmony, to make value in an otherwise valueless existence. Terror and murder is the antithesis of that. Those acts invite retaliation and regulation, which diminish all our lives, as we find at airports where we are treated like criminals, made to prove our goodwill in X-rays.

To function well, human society needs an agreed moral and civil order. The
The alternative is anarchy and atomism. Upholding the first and averting the risk of the second is the principal role of governments. In a liberal democracy, that requires broad agreement on the rules and their fairness.

Capitalism is anarchic and essentially amoral. (That is, lacking morality, not immoral.)

While it can be argued that to be effective in business in a fully competitive free market requires empathy to win and keep customers, markets are only to varying degrees free and many are dominated or greatly influenced by a limited number of corporations with quarterly reporting imperatives who win and keep customers through product satisfaction, persuasive marketing and brand rather than empathy.

Still, capitalism is the most efficient means so far devised of improving material welfare and, with that, individual and social welfare. But there is a tension between capitalism's amorality and a coherent society's need for an agreed moral order.

Hence the mid-twentieth-century "mixed economy" in "western" societies: capitalism made us richer and state regulation kept capitalism mostly within the moral order. Wealth and opportunity were shared enough to generate a sense of belonging, even despite large inequalities.

That "settlement" came under strain from the late 1960s: a rising generation worshipped individual freedom and chafed at the constraints of the moral order; cheap oil ended (for a time); the post-1945 order of fixed exchange rates collapsed and with that came "stagflation" (high inflation and low or zero growth); the east Asian "tigers" competed for jobs; economies became increasingly interdependent, with widely varying cost structures and capabilities which led to large transfers of production; the proportion of well-waged organised industrial workers declined.

The answer, widely adopted -- with special zeal here -- was to de-mix the economy: cut regulation, allow markets to find their levels and thereby promote productive efficiency. The state became more an occasional referee than a player.

That worked a treat. But it carried a big risk. It depended on those running capitalist enterprises self-regulating. Most do. Too many don't.

So we got leaky homes, a mine where safety was an optional extra and finance company sharpies who stole life savings -- human-made disasters which make nature seem tame. Plus a lot of less dramatic slyness, legal but at odds with moral order.

In the United States brilliant -- and now staggeringly rich -- "bankers" dreamt up schemes to bundle, chop, repackage and "insure" high-risk loans to people who couldn't meet the payments. They pumped a huge financial bubble, which sucked in many other countries' banks and investors. Its bursting has diminished, damaged or destroyed the livelihoods of large numbers of innocent civilians. That damage is continuing as we move into phase 2, the European phase, with maybe more to come.

The response has been to re-fight the 1930s Depression war. Generals do that in each new war until they figure the war is different and governments, central banks and international institutions haven't figured yet the nature of this war.

We are some distance from a new "normal". All we know, if we set aside econometric models and old textbooks, is that the old normal isn't normal.

What is likely is some re-mix: capitalism with tighter supervision. Capitalist irresponsibility and civilian hurt are the drivers.

Here we already have re-regulation of financial markets, new safety rules for mines and new environmental rules for offshore oil explorers, for example. Regulation recognises that an amoral wealth-creating system needs to be managed in a society where moral rules are needed for it to function well.

Those who run companies justifiably complain that regulation makes them less efficient and leaves the public less well off than it needs be.

But how many times did a good company leader castigate wayward capitalists in the de-mixed era? By their silence they left the field to the critics and let all capitalism be tainted by the actions of a few. In effect, they invited re-regulation.

Re-regulation means less new wealth to go round but also less damage to innocent people. Capitalism's anarchism is curbed. And the moral order society needs is firmer.

Fine capitalists (like fine Muslims) have a duty. It turns out ultimately to be to themselves.



-- Colin James, Synapsis Ltd, P O Box 9494, Wellington 6141
Ph (64)-4-384 7030, Mobile (64)-21-438 434, Fax (64)-4-384 9175
Webpage http://www.ColinJames.co.nz

[elZorro]

And Bryan Gould would get my vote too.

http://www.nzherald.co.nz/opinion/ne...ectid=10778102

[Major von Tempsky]

Capitalism is whatever you want to be :-)

Specialisation of occupations and exchange of output has been going on for over 100,000 years and must be built into homo sapiens sapiens dna by now. Similarly using durable outputs as a store of value for facilitating future exchanges of goods and services. Nor are you going to suppress private property of individuals or families, you'd be strung up.

The "anti-capitalism" brigade are whistling in the wind and away with the fairies.

It's interesting to see how the "Occupy" movements brekdown eventually into 4 warring elements
(a) "anti-capitalism"/socialist
(b) anarchist - which we don't really have or understand in NZ terms but roughly means replacing all government with local self government
(c) criminal elements
(d) druggie/homeless/alcoholic elements

[elZorro]

Capitalism is whatever you want to be :-)

Specialisation of occupations and exchange of output has been going on for over 100,000 years and must be built into homo sapiens sapiens dna by now. Similarly using durable outputs as a store of value for facilitating future exchanges of goods and services. Nor are you going to suppress private property of individuals or families, you'd be strung up.

The "anti-capitalism" brigade are whistling in the wind and away with the fairies.

It's interesting to see how the "Occupy" movements brekdown eventually into 4 warring elements
(a) "anti-capitalism"/socialist
(b) anarchist - which we don't really have or understand in NZ terms but roughly means replacing all government with local self government
(c) criminal elements
(d) druggie/homeless/alcoholic elements

Major, I don't think most Labour party voters are anti-capitalists or even socialists, they just want to see a fairer divvy up of the pie. More from Colin James.

Colin James's column for the Otago Daily Times for 17 January 2012


Why inequalities have come back into politics


Inequalities are the big political issue for 2012 and beyond. That's not because the left is about to surge -- the left has yet to connect principle to modern conditions. It is because the economic efficiency justifications are crumbling.

For three decades or so the ruling theory has been "all boats rise". Looser regulation and lower taxes freed entrepreneurs to innovate more, take more risks, make more money and thereby make us all richer.

Even if the already rich became very rich and the already very rich became staggeringly rich that was to the good because the whole economy would lift and even the lowly would lift with it. Theory said this was the most efficient route to wealth for the poor.

The working model was post-1945 United States: much more unequal than Europe and Australasia but its "middle class" got steadily richer.

Actually, since about 1980 a rising number of boats have risen more slowly and some not at all. Debt kept up an illusion the tide was rising but only till 2007, when debt soured. The result is widespread puzzlement, bewilderment, unease or anger, reflected in the Tea Party movement on the right and the Occupy Wall Street movement on the left.

Those extreme movements represent only small minorities of ideologues and super-angries. But they reflect wider discomforts and discontents -- evident in the Tea Party's raids on Republican candidacies and Republican fiscal conduct in the Congress and the fact that the Occupiers attracted serious media analysis and imitators across the "western" world, even, in a very minor key, here.

In is not the fact that there are inequalities that has caused the puzzlement, bewilderment, unease and anger. People widely understand, intuitively and from observation, that we are unequal in many ways -- genes, family circumstance, intelligence, physique, application, aspiration, educational opportunity, health and so on -- and that a wide range of random and significant influences can cause unequal income and wealth outcomes even from equal effort and ability.

Understanding that and knowing roughly where they fit, people make the best of their lives, with their equals.

They do that more comfortably if they believe they or their children have real opportunity to do better -- that is, if all boats are rising and/or there is socioeconomic mobility -- and if the collective (the state or community) eases the unfair inequalities.

Inequalities become a bother if they rigidify, if the state (or a state-backed class system) locks them in or appears to fix the rules in favour of the better-and-best-off, so inequalities grow -- and especially if too many boats stop rising.

Between 1979 and 2007, according to the OECD, while all boats rose in our sorts of countries, the boats in the top 20 per cent income band rose far faster than those in the other 80 per cent bands and those in the top 1 per cent rose far faster still.

After the debt veil was ripped off in 2007, there was initially a presumption that the old rules still held and that, with dollops of fiscal and monetary medicine, "recovery" would take hold and boats would rise again.

But "recovery" has been insipid or illusory. So inequalities -- particularly of income and wealth -- have seeped into politics: the two United States extremist movements, populist political parties in Europe and riots in Britain by an underclass not believing it has a stake in the establishment's game.

Angst about this used to be the preserve of the political left. But increasingly over the past six months it has been bothering the political right.

The World Economic Forum of major companies last week rated "severe income disparity" its top global risk for the next 10 years. Singapore is cutting politicians' pay by up to 51 per cent to counter rising public concern about income inequality.

In the Financial Times (FT), not exactly a left-wing rag, Lawrence Summers, a former banker and United States Treasury Secretary, wrote on November 20: "The extent of the change in income distribution is such that it is no longer true that the overall growth rate of the economy is the principal determinant of middle-class income growth. How the growth pie is distributed is at least as important."

On December 22 the FT's magisterial Martin Wolf, till 2007 a stout defender of the finance sector's brilliant but eventually disastrous inventions, declared in his column that the "huge rewards" for those with "ultra-high incomes" were "both unjust and inefficient". He demanded "a huge agenda" of government intervention, a "divisive" debate which "cannot be avoided if western democracies are to stay legitimate in the eyes of their peoples".

If such people -- and rafts of others -- think addressing inequalities is a political imperative in the north Atlantic countries, expect inequalities to feature here, too.

How that plays out -- and particularly how, or if, John Key comprehends and addresses it -- will be this year's most serious political show.





-- Colin James, Synapsis Ltd, P O Box 9494, Wellington 6141
Ph (64)-4-384 7030, Mobile (64)-21-438 434, Fax (64)-4-384 9175
Webpage http://www.ColinJames.co.nz