Government as startup

67 comments on “Government as startup ”

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1. Gosman 1

   4 September 2018 at 8:23 am

   Why does the government want to lift consumer spending? NZ has not got a problem with depressed consumer spending. We do have a problem with productivity growth. Increasing consumer spending won’t help solve that.
   • dukeofurl 1.1

     4 September 2018 at 8:31 am

     Sending more and more logs offshore wont help productivity either. Same goes for those calling for ‘drill baby drill’ and its cousin ‘dig baby dig’
     • Kevin 1.1.1

       4 September 2018 at 8:54 am

       We don’t own the logs and the owners can do what they like with them. That is why selling forests 30 years ago was a classic NZ case of short term thinking.
       • Gosman 1.1.1.1

         4 September 2018 at 9:18 am

         Yes the owners can make as much money out of owning something they can get. What a terrible idea /sarc.
         • Draco T Bastard 1.1.1.1.1

           4 September 2018 at 11:14 am

           Yes it is. Such bludging is always a bad idea especially when it impoverishes society leading to its collapse.

           Which is where capitalism always takes a society.
           • Gosman 1.1.1.1.1.1

             4 September 2018 at 11:21 am

             I think you are mistaking Socialism for Capitalism again Draco 😉
             • Draco T Bastard …

               4 September 2018 at 1:04 pm

               No, I’m not.

               Capitalism is purely destructive of societies and always has been. That’s why almost all religions throughout the world ban usury and theft. That’s all capitalism is really – legalised theft.
         • Marcus Morris 1.1.1.1.2

           5 September 2018 at 9:23 am

           Not like you Gosman but I think you have missed the point Kevin is making. Profit is being made by overseas interests from raw product grown in NZ that sold off at bargain basement rates by a National Government thirty years ago. I was living in Levin when a large forest block (planted out by PD workers I think) was sold off to Renier for a ridiculously low price and I can recall local people being outraged at the time. I was talking very recently to a woman whose family was in the timber business for years and she says she “weeps” each time she sees a load of logs heading for the sport of Tauranga. Why has Kinleith been allowed to become so diminished. At bone time NZFP was New Zealand’s largest listed company. Does it rate at all now? We have got to look at adding value to our raw materials (like Tatua has done so successfully with milk). I am hopeful that Shane Jones sees things in a similar light.
     • Gosman 1.1.2

       4 September 2018 at 9:17 am

       Considering I’m not calling for that I don’t know why you brought it up.
       • Marcus Morris 1.1.2.1

         5 September 2018 at 11:28 am

         Goodness me. I thought that your direct implication was that any owner can make as much profit as they are able to. Fair enough. But in this case the owners are not New Zealanders and the assets that they are exploiting once were NZ owned and that they were sold off was a mistake. However I don’t expect you to see it that way.
         • Gosman 1.1.2.1.1

           5 September 2018 at 11:40 am

           The assets were not sold off by mistake. It was a deliberate action on behalf of the former owners and they received payment for the assets.
           • Marcus Morris 1.1.2.1.1.1

             5 September 2018 at 5:57 pm

             You do love to be pedantic. The example that I mentioned was a publicly owned asset. Those responsible for the sale did not make a mistake in a legal sense – I know that and you know I know that. However there was general dismay in the community when news of the sale was made public and many felt that the asset had been sold far too cheaply.
     • SaveNZ 1.1.3

       4 September 2018 at 11:53 am

       Can’t see how investing so much into housing to be sold or rented to more low waged migrants (such as “restaurant managers” or “farm workers”) here is going to generate wealth.

       Wasn’t lowering immigration one of labour and NZ First election promises that took them over the line with voters?

       Blowing the budget on corporate welfare infrastructure to support John and Bill’s low wage economy and stimulate as much competition in that area to keep wages low and competition for low cost housing and jobs high, while encouraging as much driving as possible for the growing precariat class?

       P.S. there is not much public transport in poor areas and you can’t get around from your gig economy jobs or part time work on public transport as it currently takes twice as long, if it even goes where you need to go. What are people going to do for the next 10 years while they wait for the woefully inadequate public transport? Practicality is missing from Labour. New migrant and foreign money is buying up all the prime sites and driving those that live and work in NZ further out while penalising them for it, with petrol taxes and additional taxes to pay for public transport.

       Pretty hypocritical to complain about not investing in the productive sector when the governments money is being firmly thrown into construction and most messaging is to support construction business and not much else??? The government also seem to be freaking out when it looks like Kiwis are not going to be buying all the new apartments as they can’t afford them so allow foreign investors to buy them, keeping the inflated construction sector going while expecting Kiwi taxpayers to subsidise the process and keep it going by providing the taxes for infrastructure while not even being able to afford to live there.
   • left_forward 1.2

     4 September 2018 at 9:12 am

     …and which part of productivity growth theory are you thinking of Gosman?
     Stripping more natural resources, or making workers do more for less?
     Is this your capitalist voice or do you actually have some progressive ideas about how to grow productivity?
     • Gosman 1.2.1

       4 September 2018 at 9:16 am

       Ummm… you are aware that the key to productivity growth is usually capital investment aren’t you?
       • lprent 1.2.1.1

         4 September 2018 at 10:14 am

         Yep. Invariably to do capital investments in raising the productivity of employees and then passing some of the benefits on to the employees.

         That is the classical theory and one that works when there aren’t arsehole employees and rapacious shareholders around.

         That raises the overall quantity and quality of goods and services and feeds back onto the whole
         community.

         However over the last couple of decades it hasn’t worked like that.

         Instead real wages have diminished across virtually every sector of the economy regardless of the increases in productivity.

         Almost all the substantive costs of employee productivity increases have increasingly been pushed on to the employee and the government. This is known as tertiary education along with its massive subsidy and putative loans.

         At the same same time virtually all benefits from any benefits from any productivity increases have been translated directly into shareholder returns and executive salaries.

         Since then are the only real beneficiaries of such capital investments, then why should the unprividged care a toss for those arseholes?

         in essence you are a economic
         fossil. Perhaps you should learn about modern economies rather than trying to lecture by repeating rubbish that was dying when you were born.
         • Gosman 1.2.1.1.1

           4 September 2018 at 10:23 am

           I would dispute that Tertiary education has lead to massive increases in productivity.
           • greywarshark 1.2.1.1.1.1

             4 September 2018 at 10:27 am

             Gosman –
             Your rationale is : I shall dispute
           • Gabby 1.2.1.1.1.2

             4 September 2018 at 1:38 pm

             Go on then gozzer, get disputin.
           • Draco T Bastard 1.2.1.1.1.3

             4 September 2018 at 2:15 pm

             Tertiary education by itself doesn’t. Use of that education to develop the economy does.

             Unfortunately, we’ve not been using that education to develop our economy the way it needs to be developed and so we’ve seen an increase in poverty and inequality as the capitalists steal from from the rest of us.
       • left_forward 1.2.1.2

         4 September 2018 at 2:41 pm

         Perhaps you mean production growth (but even then you have missed human and natural resources).
         Productivity is about efficiency of production (independent of the size of production) – productivity growth is about improving this efficiency.
         Capital Investment does not have any effect on productivity.
         • Gosman 1.2.1.2.1

           4 September 2018 at 2:45 pm

           Wrong. If I invest in new capital equipment I would expect my productivity to increase (otherwise it has been a poor investment).
           • left_forward 1.2.1.2.1.1

             4 September 2018 at 3:43 pm

             So even though you declare me to be wrong, you do in fact substantially agree that capital investment will only have an effect on productivity if it has a certain quality – i.e. it increases productivity!
             So having taken this meaningless diversion – please answer my question –
             [What makes a capital investment good to you ] –
             Stripping more natural resources, and / or making workers do more for less?
             • Gosman …

               4 September 2018 at 3:47 pm

               What makes capital investment good for me is that it allows workers to do more for the same amount of money AND it enables a business to use less natural resources to produce the same output.
               • left_forward …

                 4 September 2018 at 4:07 pm

                 Thanks Gosman, we got there!

                 I assume you forgot about the return on investment – the increased profit! As a good capitalist that would be a given I guess.

                 Yet, you specifically refused to share some of the increased profit with the workers?

                 And what of the shared commons from which you have taken those (albeit reduced) natural resources – would it not also be good to refund the commons for the resources taken?
               • Ad …

                 4 September 2018 at 5:32 pm

                 I just knew you you belonged in the Labour Party.
   • Nic the NZer 1.3

     4 September 2018 at 7:08 pm

     What are you talking about? Increases in consumer spending are almost directly recorded as increases in income and therefore productivity (for the sectors which are spent on).
     • Gosman 1.3.1

       4 September 2018 at 8:35 pm

       No they are not. I don’t know why you think that.
       • Nic the NZer 1.3.1.1

         4 September 2018 at 9:02 pm

         Yes, it follows from the definitions.

         GDP = C + I + G + (X – M) = Total Income

         That is consumption by households, investment by businesses, government spending on goods and services, and net exports, which are equal to exports minus imports of goods and services.

         So consumption spending counts directly in GDP which is a measure of economic income.

         https://en.wikipedia.org/wiki/Gross_domestic_product#Components_of_GDP_by_expenditure

         Further productivity is to some extent measured as income divided by time worked. For example OECD productivity data measures GDP per hour worked. So increases in consumption spending will almost directly have a positive impact on the productivity of the sectors of the economy where that spending occurs.

         https://data.oecd.org/lprdty/gdp-per-hour-worked.htm

         The alternative is that the hours work increase with the increases in consumption spending but I am pretty sure you need to be barking mad to believe there is no such slack in the economy to be exercised by such a spending increase.
         • Gosman 1.3.1.1.1

           5 September 2018 at 2:43 am

           Except you miss the fact that if Government increases spending it usually means less investment (unless the State borrows more) which means the equation does not change.
           • Nic the NZer 1.3.1.1.1.1

             5 September 2018 at 7:36 am

             Wrong again, Bob!
             BTW, if the government succeeds in increasing consumption spending this doesn’t increase government spending. As you can see they are two different parts of GDP.
             And no government spending does not directly decrease investment, though that is a commonly held belief in certain religious circles.
             • Gosman …

               5 September 2018 at 8:58 am

               How can you increase spending without decreasing investment Nic?
               • Nic the NZer …

                 5 September 2018 at 9:33 am

                 Easy, just increase spending. You will notice both count positively towards GDP.

                 Also note all the domestic private sectors spending counts as consumption or investment. If there was an inverse relationship there it would be impossible for the private sector contribution to GDP to grow (or shrink), at all.

                 Your getting awfully confused about the basics.
                 • Gosman …

                   5 September 2018 at 11:41 am

                   You can’t just increase spending. The money has to come from somewhere. If you spend it you can’t invest it. Do you not understand basic maths?
                   • Nic the NZer …

                     5 September 2018 at 12:12 pm

                     Christ your deluded.

                     A countries money supply is very far from fixed. It increases and decreases through accounting inside the banking system, including the central bank. You can verify that just by observing aggregate money supply statistics over time.

                     Also, consumption and investment spending are a flow so they can increase on the same money supply due to faster turnover.
                   • Gosman …

                     5 September 2018 at 12:16 pm

                     Unless you print OR borrow money you CANNOT increase Consumer spending without impacting Investment. This has been known by Economists for a VERY LONG TIME.
                   • Nic the NZer []

                     5 September 2018 at 12:34 pm

                     So last years GDP outcomes where both consumption and investment spending nominally grew year on year, in fact didn’t happen then?
                   • arkie …

                     5 September 2018 at 12:42 pm

                     Disputing reality is a trademark of ol’ Gosman
                   • Gosman …

                     5 September 2018 at 12:47 pm

                     Noone is arguing that investment and consumer spending can’t go up if the economy is growing. What the argument is about is if you increase consumer spending artifically by an action of Government in the short term you will reduce the amount of money available for investment. You might bank on this having an effect in the medium or longer term if demand encourages capacity to be utilised more fully but if capacity is close to full then any increase in spending will not be hugely beneficial to the economy at all but will actively harm it as Business can not access enough capital to expand production AND the extra demand will drive up prices and costs.
                   • Nic the NZer []

                     5 September 2018 at 1:09 pm

                     “Noone is arguing that investment and consumer spending can’t go up if the economy is growing.” – Gosman

                     “You can’t just increase spending. The money has to come from somewhere. If you spend it you can’t invest it. ” – an earlier Gosman.
                   • Gosman …

                     5 September 2018 at 1:21 pm

                     I’m not arguing that the result of a growing economy is more money for both Consumer spending AND Investment. I’m arguing that if you start from the point of view of increasing Consumer Spending (i.e. the other end of the equation) you will reduce the amount available for Investment and vice versa If you increase investment you reduce Consumer spending.
                   • Nic the NZer []

                     5 September 2018 at 1:35 pm

                     Wrong again Bob!
                     GDP is an accounting relation. Also in maths equality is symmetric it doesn’t matter which direction you look at it.
2. Stuart Munro 2

   4 September 2018 at 9:03 am

   “In 2023 or 2026 they will lose because that’s just the way things are”

   That may be the way that things have been, but there are few to no signs of renewal among the Gnats at present. They oscillate between the blandly incompetent Bridges, the tainted and nasty Collins, and the frankly stupid Bennett & Brownlee.

   If Labour can deliver on its promises and responsibilities, the Gnats are out until they make a generational change. And they’re not good at change, they probably won’t make any until they plumb the bedrock English took them to back in the day.
   • Gosman 2.1

     4 September 2018 at 10:31 am

     I think your analysis of NZ Politics hasn’t got a very good track record at predicting political trends. I believe you are one of the many here who kept predicting the imminent demise of the last National government years before it actually lost.
     • Stuart Munro 2.1.1

       4 September 2018 at 4:24 pm

       Really no one cares what you believe Gosman – your alleged beliefs are so full of it they’re a waste of pixels.

       Political parties have support of differing tenacity.

       There is volatile support, which changes with the wind, broad support, which may still be lost over significant issues or conspicuous failures, and there is bedrock support, which will largely stay with parties regardless of their activities.

       Bill English found National bedrock support to be in the order 24% back in the day, and on current performance there is every reason that their base should fall back in that direction; moreover, many of those supporters will have died since then, thus it is probable the Gnat bedrock is closer to 20%.
     • Duncan 2.1.2

       5 September 2018 at 6:06 pm

       You seem to think money comes from the government printing press Gosman which is not generally true.
       Most of it comes from banks creating more money every time they book a loan. A bank only needs to hold around 14% capital, and the rest it can lend. This is why a bank does not make 1-2% return on capital (the difference between deposit interest rates and loan interest rates), it makes more than 10%, as it lends more than 7 times what its capital is.
       And in a time of rising house prices, the money supply increases as lending increases backed by increased deposits from those who sold their house at an inflated price and exit the property market.
       This is why the housing rises of the last 10 years are a ponzi scheme and are unsustainable and must collapse at some stage.
       And when the housing market contracts, money supply decreases and the economy pays the price. This is the cause of the current dip in business confidence although few probably understand the reasons or the implications.
       Check out the M3 money supply.
       https://tradingeconomics.com/new-zealand/money-supply-m3
       And note how it has increased way above normal rates of growth in the years since 2010 because of National’s foolish housing policy which drew in too much foreign investment and which will lead to certain collapse of all the banks within the next two years.
       If you understand what M3 money is and how it is created then you will understand your notion of a finite money supply is utter BS and you will also be witnessing the scale of the collapse that confronts us.
3. Dennis Frank 3

   4 September 2018 at 10:31 am

   Seems rather lacking at stage 3: vision & strategy. Voters being customers in the analogy, they’re looking for substantial products. I’m not seeing enough marketing yet, possibly due to too much diversification in the product design stage or too much muddling in the implementation, pre-production.

   This government won’t earn a second term if it can’t produce a range of inspiring and worthwhile products. Twyford deserves credit for getting the first houses built for his ballot; first product off the assembly line. We await buyer reaction. Shaw’s process promises delivery soon, and critical appraisal awaits that product. Which other ministers are producing useful products for the voters?
   • David Mac 3.1

     4 September 2018 at 10:53 am

     I agree Dennis, the most important ingredient of any business or government is the customer. Everything else, hurdles to be cleared but without a customer every business fails. The customer is King.

     The difference between a fledgling tech idea and an app worth millions is that journey from zero customers to millions of potential/established customers.

     No matter where in the business growth cycle, once the ‘OPEN’ shingle is in the door satisfied customers come back for more and recommend the product/service to their friends.
     • Dennis Frank 3.1.1

       4 September 2018 at 2:49 pm

       So David, do you see other ministers signalling the production of worthwhile or inspiring products prior to the next election? Who else other than Twyford & Shaw is a contender? Anything else that will be seen in retrospect as an historic achievement, such as Anderton’s Kiwibank or Peters’ Gold Card?
   • Gosman 3.2

     4 September 2018 at 11:02 am

     Taking that analogy further – If customers expectations are set that the product will be priced affordably but it is actually priced out of the reach of most people then it is likely people will not form a favourable opinion of the organisation providing the product regardless of whether they deliver a good quality product or not.
     • David Mac 3.2.1

       4 September 2018 at 11:06 am

       Pricing is a one of many components and plays a minor part in satisfying customers.

       If I have access to financing for my home and it’s an affordable amount I don’t care what the sticker price is.

       NZers aren’t yelling out for particular price points. They’re yelling out, ‘I just want somewhere pleasant, warm and dry to live mate.’
       • Gosman 3.2.1.1

         4 September 2018 at 11:16 am

         600,000 for a starter home is not affordable to most people. Heck I just bought a house with my wife for much less than that and it was a stretch financially despite both of us earning a good income.
         • David Mac 3.2.1.1.1

           4 September 2018 at 11:37 am

           Market forces Gosman. If Twyford gets close to his projections and creates a pile of $600k – $800k houses great things happen to the pricing of the houses all the buyers move out of. You stretched to afford your new place, as equally as important is what happened to the place you moved out of. Did you free up a rental or create an opportunity for an ‘on wages’ first home buyer?
4. bwaghorn 4

   4 September 2018 at 10:32 am

   With regards to point 6. Labour need to go spend time with the AB’s management . Once the all blacks shifted from one all powerful coach who got axed after a few losses meaning a complete rebuild to the smooth transition type of management we saw going from Ted to Hansen with unstoppable results .
   • Gosman 4.1

     4 September 2018 at 11:05 am

     The All Blacks never transitioned to that model. The NZRFU could still cause the All Black Management team to resign and also could replace them next time their contracts are up for renewal.
5. Bill 5

   4 September 2018 at 12:15 pm

   Wouldn’t government as governance be nice?

   I know the post is intended as analogy, but the problem with this government is that it’s elevating a very specific measure of financial health above societal health. It’s the same shit as has been done these past decades, and it’s not working.

   When I say “it’s not working”, I mean that more and more people are seeing their personal long term and/or inter-generational prospects tank while a select few cream it.

   I also mean that it blew up in 2008, and the “independent” economists who control government treasuries insisted that society be bled and the blood used to restore the beast of finance to some semblance of health.

   A direct consequence of that is a sharper tanking of those personal prospects, and an even steeper general run-down of society in terms of services and infrastructure.

   A quick look around the world should tell even the most casual of observers that the patient (us) is spitting the prescribed medicine straight back in the face of those who would dole it out (the ‘traditional’ parties of government) Yet, this government is still happily picking up the prescriptions doled out by those “independent” economists.

   In the US, the Democratic Party (the Clinton iteration of it) is dead. In the UK, the Tory Party is dead, as is the “New Labour” project of Blair. Same across the continent of Europe, where the established parties of government that have held sway “since forever” are imploding and being replaced with a ‘new’ politics that sometimes embraces positive (notionally) left ideals, or sometimes quite ugly stuff usually associated with “the right” ( eg – anti-immigrant and chauvinistic nationalism).

   Anyway, a more apt analogy for the current NZ government might have been the stages of death for a person in an aged care facility – one that was somewhat run-down and short staffed, of course. 😉
   • Ad 5.1

     4 September 2018 at 2:58 pm

     Honestly I thought I was going to get told off more for putting a commercial analogy around a democratic purpose.

     It would make for more interesting history if governments and movements ended more abruptly. But otherwise it would be hard work. Reports of the demise of the forms you mention would be welcome, and yet ……
     • RedLogix 5.1.1

       4 September 2018 at 3:46 pm

       Honestly I thought I was going to get told off more for putting a commercial analogy around a democratic purpose.

       So did I. Once upon a time there would’ve been finger wagging about you going all ‘managerial’ on us. I’m encouraged we’ve been able to see past the passionate, but often rather narrow, perspectives of the last century. Overall I really enjoyed reading the OP.

       Having said that; I’m sure you’re aware that the external drivers of a government and a purely commercial entity are somewhat different. In particular governments respond to a democratic accountability that has much longer risk/reward horizon than your average tech startup.
       • Ad 5.1.1.1

         4 September 2018 at 5:57 pm

         …but not that much longer.

         You can just imagine how long governments would last if they were measured by customer satisfaction.
     • Bill 5.1.2

       4 September 2018 at 4:15 pm

       Well, JK did do that NZ Inc thang and NZ Labour seem happy enough just to take their allotted positions in the boardroom.

       I could believe that only the most ardent fans decked in red scarves and hats pay much attention to them any more, y’know….like that football team that used to fly high and fill the terraces with passionate thousands, who are now well established in the mid ranges of the third division playing before a smattering of shuffling old men who turn up every Saturday because “that’s what you do”.
   • left_forward 5.2

     4 September 2018 at 3:13 pm

     So hang on Bill – you are saying that Trumpist style politics are somehow the antedote to the old order and that our moderately left Labour party is old and dying?
     I am far from being with you – it is much more likely that the Democratic Party (still the same old) will sweep away the GOP (which in my view is the party that is now dead) and our Labour Government will do two terms here at the very least.
     • Bill 5.2.1

       4 September 2018 at 4:05 pm

       You’re aware the “established” Democratic Party nominees are being given a bloody good run for their money by upstart Progressive candidates? Some victories are being had and inroads made. (Trawl The Intercept if you want comprehensive articles covering various candidates and races won and lost)

       The NZ Labour Party is what the UK Labour Party would have been under that Welsh guy who challenged Corbyn for leadership (Owen Smith?) – a continuation of what I’d term more or less conservative liberal policies – ie, Blairism.

       Trump is no antidote. Sanders might have been (Probably would have been). Sturgeon is. Corbyn is. Podemos is…

       Voters are breaking left or breaking right depending on what’s on offer – anything to get away from what’s perceived (correctly imo) as the failed and out of touch establishment politics. And some establishment politicians have successfully and dishonestly gained office by tumbling to that and selling themselves as “not of the establishment” – Macron in France and Trudeau in Canada for example.

       NZ Labour might do two terms. We’ll see. The thing about NZ is the lack of any alternative (ie, National and NZ Labour subscribe to the same orthodoxy, the Greens have become somewhat of an adjunct to NZ Labour, and elections are really only over who gets a shot at being manager)
       • Ad 5.2.1.1

         4 September 2018 at 5:31 pm

         Bill you will enjoy this little clip on the 3-person studio who are the support behind the Democratic Socialist candidates causing ripples within the DNC.

         Nice glimpses of their motivations based within Detroit.
         • Bill 5.2.1.1.1

           4 September 2018 at 6:37 pm

           Cheers Ad. That’s kinda cool.
6. SPC 6

   4 September 2018 at 2:45 pm

   If they are lucky, there will be

   a substantial migration to Oz because there are jobs to take up that pay enough to buy a home. And this results in an easing of local property values.

   If not, they need to be brave

   A CGT that is the GOAT. Any rental/investment home/bach property not the main place of residence upon post 1 April 2021 sale be subject to a CGT (no matter how long ago the property was purchased).

   Thus any suggestion Labour would win the 2020 election would cause a flood of properties onto the market and reduce land values for new Kiwi Build homes and thus reduce their cost.
   • burt 6.1

     5 September 2018 at 9:37 pm

     So the only hope for the country is that the talented and mobile ( tax payers ) depart leaving cheaper houses for people on benefits.
     • SPC 6.1.1

       6 September 2018 at 10:57 am

       This is happening all the time, its just the matter of scale (in decline because of the slowdown in the Oz job market in recent years and tightening of access into the UK).

       It would only take net migration to Oz returning to previous levels to ease house values nationwide – which would ease rents for those not owning.

       If not, there is the more decisive form of CGT option.

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