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Daily review 15/10/2020

Written By: - Date published: 5:30 pm, October 15th, 2020 - 52 comments
Categories: Daily review - Tags:

Daily review is also your post.

This provides Standardistas the opportunity to review events of the day.

The usual rules of good behaviour apply (see the Policy).

Don’t forget to be kind to each other …

52 comments on “Daily review 15/10/2020 ”

  1. Draco T Bastard 1

    I've often said that Muldoon's mistake wasn't in trying to develop the economy but by borrowing US$ to do it.

    I've also said that we need to stop focussing on farming so much as doing so undermines our ability to develop.

    Well, It seems that I'm not the only one thinking that way. Here's Jane Kelton in her Deficit Myth:

    • McFlock 1.1

      There's a happy medium between extreme specialisation and no specialisation, between sole focus on surplusses and unlimited deficits.

      A lot of what Muldoon did, Think Big-wise, was excellent for the long term (although subsequent governments sold the assets before many of those benefits were realised).

      But the stagflation was still a problem, and the price controls were pushing crap uphill even in the short term.

      Of course, the shit-icing on the shitcake was Douglas announcing they'd float a heavily overpriced dollar. That provided the proximate excuse to murder the social democratic system (its good to be interr'd with its bones, its evil to become part of ACT catechism).

      • Draco T Bastard 1.1.1

        There's a happy medium between extreme specialisation and no specialisation,

        Nope.

        A country needs to be able to support itself from its own resources and without trade. Which means actually developing the economy to provide the nation with everything that it needs.

        A young, undeveloped, country should probably do the specialisation thing for a time to get the economy started but it shouldn't plan on being a specialist producer for always. It should be planning its development away from external dependence.

        New Zealand is, and has been for awhile, where we should be moving away from external dependence. Instead we have our governments ensuring that we remain trade dependent.

        Trade doesn't actually make the country richer (as proven by our increasing poverty over the last 30+ years) but it does allow a few people to have more money.

        But the stagflation was still a problem, and the price controls were pushing crap uphill even in the short term.

        I haven't shown it there but just a little bit earlier in the book she shows how having a currency pegged to another causes that. At the time of Muldoon our dollar was pegged to the US$ under the Bretton Woods agreement which the US unilaterally ended (but nobody took note of) in 1971. That was why Muldoon was having to borrow in US$.

        In 1971, every currency around the world should have become a fiat currency, floated against each other and the US$ no longer recognised as the Reserve Currency.

        • McFlock 1.1.1.1

          So we need to develop world-leading education to develop world-leading blue skies research centres to develop world-leading vaccines, batteries, generators, computer chips, transport tech, fossil substitutes, production-line technology, production facilities, clothes, building materials, communications equipment, aircraft engines, hydroponic and greenhouse facilities (for shit we can't grow in NZ), etc etc etc.

          And we still need to kiss goodbye to things like brazil nuts.

          Or, we can have diverse production, with some competitive advantages, be self-sufficient in strategically important areas, and trade for shit that other nations do well and it would be stupid-expensive to try to copy.

          • greywarshark 1.1.1.1.1

            The Or… bit. Why aren't we doing that now? Seems the bright thing.

            • McFlock 1.1.1.1.1.1

              That's the pisser, innit? We were quite well placed for a while there.

              Then we went from maybe erring on the side of protectionism to going fully in the other direction, free trade as much as possible, screwing worker protection and selling long-developed assets at bargain prices.

              There has been minimal strategic direction for the economy for thirty years or more. Sure, we don't need the government assigning the precise production levels for nails every month, but it would be nice to have a higher profile for timeframe for things like transition to renewable energy and maybe a cabinet-level plan for what we want the economy to look like in 50 years and funding the research to get there.

              • Draco T Bastard

                …maybe a cabinet-level plan for what we want the economy to look like in 50 years and funding the research to get there.

                Which is what I've been saying for years. Leaving it all to the 'free-market' doesn't work. Never has done and never will do.

                • McFlock

                  Yeah, but you also keep saying we shouldn't trade with other countries.

                  • Draco T Bastard

                    I've never said that.

                    • McFlock

                      I mean, the semantic difference between

                      A country needs to be able to support itself from its own resources and without trade.

                      and "we shouldn't trade with other countries" is significantly less than the difference between either of those statements and anything based in reality.

                    • Draco T Bastard

                      Being able to support ourselves does not preclude trade – it just removes our dependence upon it.

                      Of course, under actual free-trade their wouldn't be any anyway as trade costs too much to be viable.

                    • McFlock

                      Being able to support ourselves does not preclude trade – it just removes our dependence upon it.

                      Of course it does. The main reason to import something that we are self-sufficient in is if the imported goods or services are cheaper for the desired level of quality. Therefore being self-sufficient in something that producers in other nations can produce and deliver more cheaply requires either the production of goods that will be wasted before the producers go under (because nobody will buy them) or by massive subsidies for the things that others can produce much more cheaply.

                      I mean, we could transition to a command economy with centrally-directed tarriffs and subsidies. That's never gone wrong in the past. /sarc

          • Draco T Bastard 1.1.1.1.2

            There are no competitive advantages.

            Conclusion: trade yes, free trade no
            Given that the theory of comparative advantage has all of the above-de-scribed flaws, how much validity does it really have? Answer: some. Asking what industries a nation has comparative advantage in helps illuminate what kind of economy it has. And insofar as the theory’s assumptions do hold to some extent, some of the time, it can give us some valid policy recommendations. Fairly open trade, most of the time, is a good thing. But the theory was never intended to be by its own inventor, and its innate logic will not support its being, a blank check that justifies 100 percent free trade with 100 percent of the world 100 percent of the time. It only justifies free trade insofar as its assumptions hold true,28 and they largely do not.

            We already have world leading education and research facilities. What we haven't done is build the factories and processes to take advantages of them. Instead, we focussed on the cheap farming.

            Consider Tiwai Point.

            People keep complaining about how bad its going to be to close it down, all the lost jobs and the loss of money.

            But the smelter was purchased from offshore.

            We could do the same for an IC Fab plant.

            Such a plant would hire the same number of people and support the same number in the wider community. On top of that, CPUs and other ICs tend to sell for a hell of a lot more than processed aluminium.

            If we then developed our silica deposits we would then have more jobs while also eliminating the GHG emissions of importing the processed silica.

            If we then used income from that fab plant to pay for R&D to improve that fab plant then we have even more jobs and a sustainable, high tech, industry. It would push our universities to new heights as well while also opening up a career path for our people who want to work in that industry who presently have to leave to do so.

            And once we produced those ICs here then we wouldn't be dependent upon importing computers or many other electronic devices.

            And you don't get to say that China does it better. Producing ICs is almost fully automated. The factory is just as efficient here as in China.

            And, of course, once we’ve got the IC industry going we start developing another one.

            • McFlock 1.1.1.1.2.1

              Well, no, it wouldn't be just as efficient.

              Firstly, a factory supplying the world has economies of scale not met by a factory supplying 5 million people.

              Secondly, if the IC plant is "almost fully automated", what would the thousand workers at the smelter do (assuming they can transfer seamlessly over to IC fabrication from foundry work)?

    • Stunned Mullet 1.2

      Stephanie Kelton

    • woodart 1.3

      no, muldoons biggest mistake was to kill off norm kirks superannuation scheme. look at how much is in michael cullens kiwisaver. would have been three or four times as much if piggy hadnt phucked things up. biggest eonomic ballsup ever by any kiwi poli, and should be bought up anytime the nats go on about superior economic managers. maturing super schemes all around the planet are now some of the biggest investors ,anywhere. thanks piggy…

      • Draco T Bastard 1.3.1

        no, muldoons biggest mistake was to kill off norm kirks superannuation scheme.

        Can't get blood out of a stone.

        It's not money that makes the economy work but actual, physical resources and their use.

        When those super schemes mature what are they going to be spent on?

        Muldoon was at least thinking about that when he implemented Think Big. No government since seems to have done so.

        And, really, if growth worked then the government wouldn't be panicking about the Baby Boomers retiring. The problem is that, when the Boomers retire, there's going to be lots of people spending money and not a lot of people actually producing stuff.

        That's why they keep putting the retirement age up. No amount of interest bearing bonds is going to bypass physical reality.

    • Stuart Munro 1.4

      The synthetic fuel plant would have done us a lot of good, foreign exchange wise, but getting US tech partners to deliver is always a problem.

  2. ScottGN 2

    Greens on 8% in the last CB. So it’s back to Plan A for me – two ticks Labour on Saturday.

    • McFlock 2.1

      Except half the votes have already been cast when they were polling lower. Fingers crossed.

  3. ScottGN 3

    @McFlock 2.1

    CB were in the field last weekend til yesterday evening. So presumably they were picking up that crucial little swing from Labour to Greens as voters headed into polls. It’s going to be fine.

  4. Robert Guyton 4

    In the debate…Jacinda is looking very confident and very relaxed.

    • Jester 4.1

      Of course she should be. Look at the latest poll. Election likely to be all over by 8:30pm Saturday night.

      • Robert Guyton 4.1.1

        This is good news, Jester. It's enjoyable to see the Prime Minister exuding confidence at this point in time.

    • Chris T 4.2

      TBF she didn't even have to answer that question except with platitudes.

      Quite funny watching who gets put under the pump while the other doesn't

      • woodart 4.2.1

        yeah, just like hoskings show on a monday morn eh? unbiased journo eh?

      • Rapunzel 4.2.2

        Are you serious? What's funny is trying to disguise as casual interest something that has all the hallmarks of tribal bias. Have you seen nothing of the pantomime performed by Collins prior to her Charmer Chameleon act for most of that debate. Putting an entire campaign in the last week on a feeble attempt to paint two parties as one is hardly leadership material

    • Gabby 4.3

      A cunning ploy to send Codger into paroxysms of rage.

  5. Robert Guyton 5

    Coalition questions next – bottom lines – Judith's chance to torpedo her own kayak!

  6. ianmac 6

    Judith is trying hard to avoid those little nasties that she is famous for, but as for all those bluddy ads! Destroys the credibility of the debate. Jacinda is Prime Ministerial and well lit.

  7. Pat 7

    "According to the Ministry for Social Development, in the three months to September the number of people receiving a main benefit was up 23 percent – for those on the job seeker benefit the rise was even steeper, up nearly 43 percent.

    That translates to an increase of 13,660 people on the jobseeker benefit over the past three months and 61,185 over the past year."

    https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018768533/jobseeker-benefit-figures-up-more-than-40-percent-on-past-year

    no 'V' shaped recovery

  8. Robert Guyton 8

    Good bye, Judith. Fare well.

  9. Robert Guyton 9

    Slam dunk (with a smile).

    • Chris T 9.1

      Was a forgone conclusion any way, most people would have voted already and Collins knew pretty much she was screwed when she took the job on I imagine.

      Just one of those someone has to be the no hope scape goat, be it Goff, Cunliffe, Collins etc

      • Drowsy M. Kram 9.1.1

        Speaks to Collins' and Muller's character that they were keen to take one for the strong team.

      • McFlock 9.1.2

        I dunno.

        A caretaker leader running a solid but unambitious campaign wouldn't suddenly resort to prayer and blaming the overweight. That smacks of frustration.

        • Stuart Munro 9.1.2.1

          Working closely with Gerry for extended periods might drive the best of us to invidious generalizations about high BMI individuals.

        • Chris T 9.1.2.2

          Or wave around a fish or apologise for being a dude.

          • McFlock 9.1.2.2.1

            Cunliffe was behaving consistently. Goff behaved consistently. Bridges behaved consistently.

            Shearer did not, and Collins has not.

            Peters is in the same situation, but instead of stabbing blindly with style changes, he's stabbing wildly with policy button-pushing but never finding that X issue that short circuits voters.

            After years of twerking, Seymour has connected with people who forgot that ACT are a bunch of psychos, so he's leaning in to that by toning down some of the more morally bankrupt ACT policies – we'll see how long that rests happily with the gun nut brigade, but at least he has hit a sweet spot with some voters.

            Shearer, as you point out, went to prop comedy that he wasn't suited for, because he and his staff were desperate..

            "Crusher" Collins tried being nice, went multi-ethnic, was suddenly a devout Christian and wouldn't shut up about it, then decided fatties were just weak and Tasmania sucked (because she's being nice lol).

            Bridges wasn't going to be PM, but he was at least putting in a solid effort for the party. Collins is turning in every direction possible as the party swirls down the drain.

      • Rapunzel 9.1.3

        If she really "pretty much knew she was screwed" she then proceeded to present every type of weakness of character to wider NZ that actually made things even worse for National. I can't see how you can consider that was very bright.

        • Chris T 9.1.3.1

          I never said I did.

          But she is probably working against the most pro one side media in NZ media history.

          Even Key didn't get as much brushing over their failings as much as Ardern is.

          • Rapunzel 9.1.3.1.1

            Oh my mistake must be a different Chris & not the same chris I thought it was – sorry But not about the bias that's been in the opposite direction to what you claim. Just today NZ Herald changed the photo on a story they commissioned from The Financial Times to one of Ardern wearing hijab – the Times one was a more general photo – when they put it up on their pages. So I simply don't accept your assertion that Collins has been hard done by by media.

            • Chris T 9.1.3.1.1.1

              I was pointing out the brushing over of Ardern's failures.

              I is getting a bit silly.

              • Muttonbird

                I is getting a bit silly.

                Ain't that the truth.

                • Chris T

                  I am perfectly willing to be swayed by your outlines of what she has actually achieved which don't involve national emergencys like the last lot did.

          • Incognito 9.1.3.1.2

            Key never aimed that high.

  10. Anker 10
    • National rather than scapegoating any of its recent leaders need to really look at themselves and the rot that pervades their party
    • McFlock 10.1

      Shhh. We should let them drop hundreds of thousands of dollars on a review to find that out, rather than just telling them for free that it's because they suck 🙂

  11. greywarshark 11

    Seen on Scoop. What's Max Rashbrooke up to? Sounds interesting – looking at questions.

    https://thedig.nz/transitional-democracy/we-need-to-reset-democracy-tedx-talk/

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