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Plunket on NZ Power

Written By: - Date published: 1:22 pm, April 20th, 2013 - 44 comments
Categories: Economy - Tags:

Sean Plunket’s piece on NZ Power wasn’t quite what I expected. After invoking the usual grim vision of the 1970s (although I swear I detected a slight wistful nostalgia) he breaks out the following conclusion:

With the world struggling to cope with the downstream of the global financial crisis and a tonne of examples (Pike River the most recent) that the market doesn’t always deliver the best results, maybe it is time we had a more meaningful and fundamental debate about how we run our country and economy.

It could be that next year’s election might be fought with ideas and philosophies and Kiwis could get a real choice between a continuation of current policies and an updated version of the Polish shipyard.

We don’t know yet if the Left’s back-to-the-future strategy is going to get any traction but if it does don’t be surprised to see National resurrecting a few of Sir Robert’s old strategies as well. Bring on the dancing Cossacks.

I think one of the best things about the NZ Power policy (other than its promise of a better electricity system) is that has cracked the TINA facade of the neoliberal consensus and made space for a discussion about alternatives.

And if establishment media like Sean Plunket are welcoming that, then it is unsurprising that those with a vested interest in maintaining the status quo are sweating.

44 comments on “Plunket on NZ Power”

  1. kiwicommie 1

    The neoliberal world is crashing down ( http://online.wsj.com/article/SB10001424127887324493704578430884206397640.html ), yet they still spin the same nonsense.

    • ghostrider888 1.1

      there was a link to a, maybe zero hedge or similar site about these figures earlier in the week; under “maths”

  2. RedLogix 2

    The consequences of the GFC will take time to crystallise. It was not until 1933, five years after the 1928/9 Stock Market Crash that we began to see Roosevelt’s New Deal reforms in response.

    In many ways the failure of capitalism in 2008 was even more profound that the Great Depression. It happened despite an entire generation of top economists declaring that our understanding and modelling was so much more sophisticated, that fifty years of progress had made a repeat Depression impossible. Bernanke kept banging on about “The Great Moderation”.

    All nonsense of course. Capitalism has been nothing more than a sequence of crisis, each more shameful and predictable than the last … yet everyone wanted to pretend that it was working. Well it isn’t. Unrestrained, un-moderated ‘free-market’ capitalism is precisely like the drug P. It’s a mad, dangerous stimulant for an economy. For a short while the economy booms and a small minority of dealers madly profit from it all. We’re sold the lie that that self-reliance, individual talent and hard-work are all that matter and all that should be rewarded. Then over-weaning confidence, deception, delusions and fraud inevitably blow the fuse.

    Then it turns out we were actually all in this together… and we all pay the cost. The reaction is coming, we just can’t quite see it yet.

    • IrishBill 2.1

      I think we’ve been in it prior to the crash. Indeed, one of the reasons I first started blogging here was because I felt there was a space opening for talking about alternatives and the Standard seemed like as good a place to do some of that talking.

    • kiwicommie 2.2

      Well I think we will see some return to Dirigisme ( http://en.wikipedia.org/wiki/Dirigisme )like economics, especially in Europe.

      • RedLogix 2.2.1

        Whatever is coming next should take into account a better balance between the three fundamental elements of society; the individual, the state and the community.

        Each has it’s proper role and function; but it has been the notion of community which has been the most neglected. It is the sense of participation and service which morally justifies the efforts of the individual; and at the same time ameliorates and lends compassion to the power of the state.

        • ghostrider888 2.2.1.1

          sounds like something Chris would write.

          • RedLogix 2.2.1.1.1

            Well we’ve tried the variations where the state or the individual have dominated the balance … and neither worked.

            Yet there’s a multitude of ways to define ‘community’. Probably Chris would indeed have a lot more to say.

            • Colonial Viper 2.2.1.1.1.1

              You know they’re not just going to do this. They’re going to have to be MADE to do this.

              • AmaKiwi

                +1 Spot on.

              • RedLogix

                But how to MAKE them? As much as the irregular use of lamposts appeals, it comes at it’s own dark cost. Instead we should use what they imagine are their strengths, against them. What is their primary strength? The power of money.

                Yet money is the most abstract, the least fearsome foe humans have ever invented. It is after all just an idea. Take away the power of that idea. Invent our own means of exchange. Like this..

                Take back our means of production. OK despite reservations, maybe 3-D printing will get us some of the way there. Maybe the employee owned business will take us another part of the distance. Open Source everything.

                Reclaim the commons.

                • ghostrider888

                  Cor! (blimey) will have to get a couple of CPU’s for a start ;) (which I began looking into today) I had read an article (online, the power of the web) about a second desk-top pc revolution (affordability and cost efficiencies) and the local chap who I respect advised me today he has built a couple of 2-core…rattles off a whole lot of numbers that I can’t remember but will recall when I see them, Gigs and RAM, Hertz, anyway lots, and that the are cheaper to repare than notebooks and lappies; so, if someone of the calibre of lprent reads this and could advise on
                  -processing speed to run a couple of programs, handle the benefits of the fibre, switch between tabs effortlessly
                  -Hard Storage
                  -RAM
                  -and the specs for un-problematic streaming and audio-visual broad-cast reception, then I would be thankful; I’ll even write them down, even; now that’s getting serious. :-D
                  (no gaming facility required)

        • karol 2.2.1.2

          RL: Whatever is coming next should take into account a better balance between the three fundamental elements of society; the individual, the state and the community.

          excellent point. And that is why Lab-Greens need more than one Mana MP. So far Mana has taken an approach that focuses on engaging with low income communities.

        • Sosoo 2.2.1.3

          It’s not rocket science. A sensible vision of the future means accepting a greater role for the state in the economy with higher taxation. It just needs people to appreciate the limits of the market mechanism just as people now recognise the limits of central planning. Socially, it will require a more accepting attitude of the various forms of insurance provided by the welfare state via a more realistic attitude about the relationship between merit and market distributions.

          We already have the conceptual resources with which to understand such a society in those parts of regular economics concerned with corrections of market failures and in familiar kinds of Rawlsian contractual theories of justice. Like I said, you don’t have to be a rocket scientist to understand that vast amounts of productivity are being wasted on self defeating status competition via consumption. That productivity would be better directed to producing things that actually raise our quality of life.

    • AmaKiwi 2.3

      “The reaction is coming, we just can’t quite see it yet.”

      Yes, we can. Look at Arab Spring, collapsing economies in Mediterranean Europe, a decade of deflation in Japan, the American police state, etc., and you see what lies just ahead for us.

      When you try to think of NZ solutions, think about what needs to be done in those place. Them is us.

  3. vto 3

    Well what takes people like Plunket this long to realise that the free market / private individual approach has not worked as well as expected?

    He seems a bit slow.

    • IrishBill 3.1

      To be fair there’s not been an establishment voice pushing this kind of line in a coherent way up until now. I can’t overstate how happy I am that Labour has final realised that there is an appetite for this kind of change and are moving on it in a way that is much more adept than some of their previous efforts, and that they’re doing so side by side with the Greens.

      • Colonial Viper 3.1.1

        Yep. However, one swallow and all that.

      • ghostwhowalksnz 3.1.2

        Considering we have had a state ownership of the power sector with only a token private business for some time.

        Even National is only proposing to sell 49% of its power companies AND keep full ownership of Transpower

        So on one hand the Nats wave the bogey of state control and the hand has state control very nicely thankyou

        And ist not as though they havent intervened in the market before, under Max Bradford Chavez

        the private retail power companies were forced to give up their most profitable parts of their business – all so that we could have ‘cheaper power prices’

        I really like this wedge issue, which appeals to labours base, uses Karl Rove style tactics to catch national out on an issue they certainly dont like to campaign on.- Selling State assets

  4. geoff 4

    Bring on the Polish shipyard! Sounds good to me!

    • ghostrider888 4.1

      may be a slow-boat though.

    • ghostwhowalksnz 4.2

      Meridian, Mighty River , Genesis and Transpower are already our ‘polish shipyards’ and they will still be 5!% or more state owned.

      Exactly what private enterprise nirvana is PinoKeyo going to give us ?

  5. Colonial Viper 5

    Interesting fact: National supporters would love to see a strong innovative Labour Party, one which allows National a stronger contrast and push Key to come up with, ahem, firmer policies.

    • ghostrider888 5.1

      i thought the characterization of key as a “ponce” (missing in action at mo’) perhaps by vto was very accurate; a bit to come back from / to

      • weka 5.1.1

        What’s wrong with being effeminate?

        Insulting gender stereotypes is not the way to go IMO.

        • Sosoo 5.1.1.1

          Whadddarya!?!?!

        • Tim 5.1.1.2

          what’s your definition of ponce? I’ve never associated it with being effeminate. I note also that various dictionary definitions associate it more with ‘pimping’, bling and false showmanship
          Key IS a ponce. Others (like errr, say Michael Portillo) – ditto.

          • weka 5.1.1.2.1

            My dictionary has the derogatory definition as effeminate. When I was growing up ‘ponce’ was a term aimed at males, with the insinuation that effeminate = homosexual. Nothing to do with sex work. Kind of curious now how the word has come to have such different definitions, but outside of a dictionary, I’ve not heard the word used to mean pimp.

            I’m curious how you see Key as a man who controls women doing sex work for profit.

    • Lanthanide 5.2

      Yeah, but that never works for National, because the NZ electorate is truly rooted in the center-left.

  6. felix 6

    The link to Farrar’s troll farm is interesting. Just skimmed the first dozen or so comments.

    Even those munters are losing their appetite for bullshit.

  7. Poission 7

    One of the interesting trends that seem to be emerging is the high risk attached to the so called business models and a number used to reinforce ideological bias are based on errors.

    Austerity is based on a mathematical error and the London whales beaching on a schoolboy howler ( a fact that seems to be ubiquitous with bankers and ex bankers) .

    This argues for greater transparency with policy.

    Krugmans arguments are here..

    http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html?ref=global-home&_r=0

    • RedLogix 7.1

      Again Steven Keen repeatedly and emphatically pointed out that the relationship between debt and growth is this:

      A positive rate of change of debt is highly correlated with positive growth, and inversely. This means that austerity (which is a rapid decrease in debt creation) ALWAYS results in a rapid contraction of the economy.

      It doesn’t matter whether it is government debt, business debt or consumer debt … it is pretty much just the ratio of total debt to GDP which greatly magnifies this effect. At low total debt to GDP ratios (say 35%) the rate of change in debt has only a modest effect, but when it gets into the range of 150% or higher as it is for many Western economies including ours… it becomes the dominant effect.

      • Colonial Viper 7.1.1

        And for the tl;dr

        You can no longer get economic growth without parallel increases in debt. When you hear any politician talking about “growth” they are actually talking about growth in debt.

        As a technicality: I believe that Keen refers to debt acceleration, not just a positive rate of change of debt i.e. ever faster increases in debt is needed to maintain economic growth.

        This is the result of relying on a banker run debt based system to create the money we need to make day to day economic transactions.

        At low total debt to GDP ratios (say 35%) the rate of change in debt has only a modest effect, but when it gets into the range of 150% or higher

        Kyle Bass reckons that the key ratio is actually:

        government debt/government tax revenues

        Under a related measure, the Japanese government now spends 25% of its tax revenues on servicing debt interest. You can see how this is going to end badly for the Japanese.

        • Lanthanide 7.1.1.1

          “As a technicality: I believe that Keen refers to debt acceleration, not just a positive rate of change of debt i.e. ever faster increases in debt is needed to maintain economic growth.”

          A positive rate of change is the definition of acceleration.

    • Murray Olsen 7.2

      I don’t like the blaming of austerity on a mathematical error. It seems to suggest that Tory governments would have followed other more humane policies if they’d got their sums right. I don’t have so much faith in them. As far as I can see, austerity is based on a desire to take an even greater share of the wealth and spread it around up top, some sadistic desire to punish the poor, and the knowledge that they’ll get away with it because 30 years of right wing market oriented Labour parties have hobbled any effective opposition. All much harder to fix than a mathematical error, though.

      • Colonial Viper 7.2.1

        Oh I agree, the neolibs simply use this kind of “research” to provide political cover for achieving their asset grabbing objectives.

        For instance, its the kind of thing that central bank officials would refer to in order to convince elected politicians that austerity programmes are necessary.

  8. Adrian 8

    Now I’m not very bright but years ago when Don Brash et.al were banging on about living beyond our means yadda yadda…and that we were spending $1.11 for every $1 and it had to be bought back to balance, I told my mates that if that hppened then the economy must retract by at least 10% and we would be in the shit, joblessness, nobdy spending etrc. Brash etc must have known this and if not they are certainly pretty thick.

  9. Foreign Waka 9

    I honestly sometimes wonder whether some of our politician and journalists are actually working in the interest of NZ. Making comments like “Polish shipyard” is such uneducated approach, you know by just listening that a drum is being beat for some interest.
    I watched this morning “the Nation” and when David Carter explained for the third time the difference between dividend of power companies and tax to the Interviewer, I was thinking that either that lady is stupid or biased. In both cases, she should no do these interviews.
    Right after that Winston Peters with the proposal of buying back shares with the Kiwi fund (Pensions). My hair stood on end! The only ones winning with that proposal would be the financial punters. The Taxpayer owes the power stations, they are being sold against their will and than – the audacity – the pension fund from the same people is being raided to pay the financiers for the power stations that belonged to the people in the first place. How stupid do these people think we are?

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