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Friday's Top 10 with NZ Mint: Innovation crisis or deleveraging crisis? Or maybe it's both? Fine not-so-young corporate cannibals; How a Ferrari crash changed China's leadership succession; Mr Burns and the fiscal cliff; Clarke and Dawe;

Posted in Opinion

Here's my Top 10 links from around the Internet at 11 am in association with NZ Mint.

As always, we welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.

See all previous Top 10s here.

My must read is #9. It's just a chart that tells the economic history of America. The first 4 cartoons today are mostly about the very Autumnal fiscal statement in Britain, which pledged yet more austerity, even slower growth, a delayed budget surplus and higher debt. Rinse and repeat. Just nuts.

1. Innovation crisis or financial crisis? - Kenneth Rogoff writes about this question at Project Syndicate.

There's a live debate around at the moment about why economic has slowed to not much, despite 5 years of waiting for recovery.

There's a group, including tech entrepreneur Peter Thiel, who believe we haven't invented enough new technology in recent years to power future growth.

There's another camp who say it's a natural result of a financial crisis and too much debt that needs to be deleveraged away in slow period of saving and financial repression.

Rogoff wrote the seminal 2009 paper (and then book) on the effects of deleveraging on growth with Carmen Reinhart. He still thinks it's the debt, rather than the innovation, that's slowing things down.

Or maybe it's both?

Here's Rogoff:

There are certainly those who believe that the wellsprings of science are running dry, and that, when one looks closely, the latest gadgets and ideas driving global commerce are essentially derivative. But the vast majority of my scientist colleagues at top universities seem awfully excited about their projects in nanotechnology, neuroscience, and energy, among other cutting-edge fields. They think they are changing the world at a pace as rapid as we have ever seen. Frankly, when I think of stagnating innovation as an economist, I worry about how overweening monopolies stifle ideas, and how recent changes extending the validity of patents have exacerbated this problem.

No, the main cause of the recent recession is surely a global credit boom and its subsequent meltdown. The profound resemblance of the current malaise to the aftermath of past deep systemic financial crises around the world is not merely qualitative. The footprints of crisis are evident in indicators ranging from unemployment to housing prices to debt accumulation. It is no accident that the current era looks so much like what followed dozens of deep financial crises in the past.

2. Deflationary shock coming - So says CLSA Asia's Russell Napier

Central banks are straining to produce inflation but developments in emerging markets (i.e. China) suggest a deflation shock is now likely. The Capital exodus from China is disrupting the creation of inflation.

3. Euro-democracy's future - Antony Beevor, the famed historian of the Second World War, writes about his worries about democracy in Europe.

The memory of the second world war hangs over Europe, an inescapable and irresistible point of reference. Historical parallels are usually misleading and dangerous. The threat of economic collapse now is not the same as the threat of Nazism and war. But the current crisis still poses a threat to parliamentary democracy in Europe. It may awaken the nationalist monsters which the European ideal had tried to consign to history.

The general public as a whole is as badly informed today about the dangers facing the eurozone as the populations of Britain and France were in the late summer of 1938 during the Czechoslovak crisis. The poet WH Auden called that period “a low, dishonest decade.” Politicians have to sell hope. No Cassandra ever won an election. Churchill, who had been dismissed as a war monger, only came to power after the crisis had broken in all its fury.

When my book on the Spanish civil war was published in 2005, journalists in Madrid asked me in all seriousness whether it could ever happen again. I replied that thank goodness the same conditions simply did not exist. The vicious circle of fear between right and left, which had originated in the extreme cruelty by both sides in the Russian civil war, did not exist.

4. The Yen will get it in the end - Here's Reuters' James Saft with an analysis of what's coming for the yen.

What happens when an over-valued currency meets a political leader seemingly bent on imposing his vision on a battered central bank? Watch Japan, soon-to-be Prime Minister Shinzo Abe and the yen in 2013 to find out. (Spoiler alert: the currency gets it in the end.)

5. Huawei debate not going away - Reuters reports Huawei tried to sell equipment to Iran to let it spy on mobile phone users...

A Reuters investigation has uncovered new evidence of how willing some foreign companies were to assist Iran's state security network, and the regime's keenness to access as much information as possible.

Documents seen by Reuters show that a partner of China's Huawei Technologies Co Ltd offered to sell a Huawei-developed "Lawful Interception Solution" to MobinNet, Iran's first nationwide wireless broadband provider, just as MobinNet was preparing to launch in 2010.

The system's capabilities included "supporting the special requirements from security agencies to monitor in real time the communication traffic between subscribers," according to a proposal by Huawei's Chinese partner seen by Reuters.

6. A fateful Ferrari crash - The New York Times reports on how a Ferrari crash and the subseqent cover-up altered the succession of China's new leadership.

The outlines of the affair surfaced months ago, but it is now becoming clearer that the crash and the botched cover-up had more momentous consequences, altering the course of the Chinese Communist Party’s once-in-a-decade leadership succession last month.

China’s departing president, Hu Jintao, entered the summer in an apparently strong position after the disgrace of Bo Xilai, previously a rising member of a rival political network who was brought down when his wife was accused of murdering a British businessman. But Mr. Hu suffered a debilitating reversal of his own when party elders — led by his predecessor, Jiang Zemin — confronted him with allegations that Ling Jihua, his closest protégé and political fixer, had engineered the cover-up of his son’s death.

7. Mr Burns has been thinking about the Fiscal Cliff. He thinks it's great.

8. Cannibalising each other - As the pressure on government finances intensify, companies are proving very effective at playing state and national governments off against each other in the contest for new jobs.

The companies demand big tax breaks and subsidies to set up their operations in one place rather than another. The whole process ends up ratcheting down corporate tax rates all around the world.

Sound sustainable?

Here's David Segal at NakedCapitalism and the New York Times piece it is based on.

The relevance of course for New Zealand is how we were gamed by Warner Bros over the Hobbit movies.

The other interesting aspect is the identification of the agents who do these dodgy deals.

The WTO is the only body that’s threatened to provide any sort of meaningful check on this sordid dynamic, ruling that several billions of such subsidies to Boeing were problematic — but that European subsidies to Airbus were even more severely infringing.

Perhaps the most transparently absurd manifestation of war-between-the-states phenomenon is the case of the film tax credit, driven by the movie industry’s exploitation of star-struck state legislators who seem to believe that the likes of Boise and Des Moines stand to become the next Hollywood. The film tax credits spurred the most precipitous race to the bottom I’ve witnessed in my time in politics. It came to a head in 2009, when Wisconsin had just spent $100,000 dollars to support Johnny Depp’s personal grooming expenses and Connecticut was fixing to subsidize episodes of Jerry Springer’s talk show — lots of broken chairs to pay for. The capstone of this farce was California’s institution of tax credits to entice productions back to Hollywood.

9. The chart says it all - Courtesy of Joe Wiesenthal at Business Insider, here's a chart showing the corporate profit share in the US economy since World War 2 (red line), compared to the wages share of the US economy (blue line).

Suffice to say, the big change in the late 1990s to deregulate banking systems and gear up coincided with a structural shift higher in the corporate profit share and a structural shift lower in wages.

Sigh.

10. Totally Clarke and Dawe - They preview the deciding cricket test in Perth.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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43 Comments

Interesting take on the

Interesting take on the "fiscal cliff"
Certainly some parallels with the euro project

An economy is "social" by

An economy is "social" by definition. Last time I checked I lived in a society. What a load of rubbish. Fiscal cliff is an illusion....a trojan horse to rob what is left of the new deal and it's grand ideals.
Cheers

re #1. More debt than

re #1. More debt than innovation, deleveraging needs to take place but the likes of Bernake wont let that happen. Someone should confiscate his printer

#1 - No!  Really?   Five

#1 - No!  Really?
 
Five years of waiting for recovery. Fancy that.
 
"who believe we haven't invented enough new technology in recent years to power future growth".
 
What an oxymoron - technology doesn't power anything; energy does.
 
Technology can make you more efficient, andthat's all they can do, energy-wise. Efficiencies are a low-hanging-fruit-first cherry-pick. Diminishing returns set in: more and more effore for less and less return, ultimately crossing into an EROEI of below 1.
 
How long is this nonsense-talk going to continue? 

yeah, I was going to post

yeah, I was going to post maybe its the cost of energy stupid....you saved me the bother.
Mind boggling that here we have so so called bright ppl yet they cant see it.
Some do mind....
Interesting....

#1. A lot of past techonolgy

#1. A lot of past techonolgy was geared towards utilising energy sources that had been discovered. The problem isn't so much the lack of invention, but the lack of discoverable new energy sources.

#5. Read all Antony Beevor's

#5. Read all Antony Beevor's ww2 books. Many of us don't realize how unstable the finacial system really is today.
Politics is polararizing, as is wealth accumulation. Our economic system is simply one idea of many. We have succumbed to the dangers of compound interest that many of the classical economists warned about. The debt overhead, or more accurately, the stream of interest payments to creditors is squeezing productive effort to death.
There is a lot we can do but of course those that benefit from a healthy living without work or effort have a lot of power and self interest in the status quo.
We are told that we have no choice in matters, but credit money is simply a construct of the human mind, and the rules we write around it's use can be rewritten.
I always bear in mind that WW2 was fought regardless of taxation and debt. Fiscal cliff is a ridiculous notion propogated by intense self interest.
Cheers

Have a read of 'Savage

@Andrewj.... I will order

@Andrewj.... I will order that book, looks good.
cheers

I've just bought that one

I've just bought that one now...good recommendation, thanks andrewj.....have just been reading churchill's books on 2nd world war, this is a perfect follow-on

thanks Andrewj

thanks Andrewj

Have a listen to Niall

Have a listen to Niall Ferguson:  a lovely comment about any advanced civilisation operates on the edge of chaos. 
 
Call it a sweet spot.
 
Sure, the subsistence-farming crew (and a few common taters on this Fair Site) can point to 'sustainable' systems which by definition sit far back from the edge of chaos.
 
But they don't scale, and they are incapable of supporting the current populations at anything like our current level of comfort.  One, other or both of Popluation and Comfort would haveta go, and that's not exactly an electable proposition in a democracy.  But then in my darker moments I suspect this crew aren't that fussed about democracy - too many Lesser Minds get to Vote!
 
Demographics will actually take care of population:  Germany, Russia, Japan and China all face hideous demographics over the next 40 years.  Italy is well on the way to halving birth cohorts with replacement rates nearing 1.0.   Mark Steyn is the original RWDB bore on demographics, and it's well worth reading his books if only for the deathbed humour to be had.
 
So that's gonna leave Comfort.....who gets to choose?

Waymad - good post.   Trying

Waymad - good post.
 
Trying to 'grow' on the front edge of resource-consumption, while conveniently failing to address or mitigate the real costs, isn't what I'd call a 'sweet spot'.
 
On you other point, we've never said anything else. As Professor Ellen Moseley-Thompson said at the Uni Staff Club a few years back, when asked how many people the planet could suport she said ; "that's not the question. Tell me the level at which you want to live, and then I'll tell you how many".
 
Demographic descent lags too far behind what will almost certainly end up being a Seneca event.
 
Democracy? Best of 'em, but needs an informed populace. That isn't happening.
 
Comfort? That you can get using stuff-all. That one's not a bother. Sustainable food/water/infrastructure are the problem. Mind you, some think they contribute to comfort.
 
Go figure......        :)

Democracy might be the best,

Democracy might be the best, it looking at where we are then it is clear it has serious shortcomings. I heard it once said that the best form of governance is a benevolent dictator and I find it hard to disagree.
 
Comfort, well we seem to focus so much on possessions instead of people. Unfortunately as people become dispossed as a result of the behaviour then people will again become the focus, but probably not in a nice way.

#8 is so relevant to Peter

#8 is so relevant to Peter Jackson, Warner Brothers, Lord of the Rings etc. While I admire his audacity and PR skills as well as his directing ability and drive, his personal fortune is roughly equal to the tax breaks his movies have received from the government. Yet not only does he not acknowledge this or thank the taxpayer, he repeatedly lobbies for more.
 
Like the twitter arguement Joyce and Selwyn Pellett are engaged in over Endace and government grants, if the government is contributing so much money to a company, production or industry, shouldn't the grants/tax breaks/subsidies be in return for equity
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10852563

Is it really the fault of the

Is it really the fault of the 1% that incompetent, corrupt, evil politicians aceppted their bribes?
 
It is not the fault of economics that we have this mess. All the blame lies with the way we are governed. A system that allows governments and bureaucrats to be corrupt and accept bribes. A system that allows backroom deals in secrecy, like the TPP talks. It is the corrupt system that needs fixing, not the economy. A corrupt sytem that allows greed and dishonesty to succeed must be destroyed.
 
It is time everyone, world wide, were allowed to have a fair and responsible constitution. One that has an economic bill of rights, one that has a more equitable distribution of the wealth as a constitutional right. One that makes governments and bureaucrats accountable.
 
It is time for a real change, a change in the way we are governed.

Mike B - I think your on the

Mike B - I think your on the wrong site this is interest.co.nz  NOT action. 
But very good points you have made !!!

Yes, you are right of course.

Yes, you are right of course. There are only two kinds of people in this world, the living and the dead.
 
There are also only two choices for us mear slaves. We can spend all our lives winging, moaning and depresing ourselves, trying to make a difference when we know it is a waste of time. That's why we have sites such as these, they are there to cater to the wingers, moaners and fire side experts (self included of course).
 
Then there are the sheeple who have sky sports and become armchair experts on sport. Oh, i must make time to keep up with the royals and their babies, yes and i must see the Hobit at least six times. Boy this ignorance is bliss.
 
I wonder which world we live in, the living or the dead?

On 1, (the lack of growth) it

On 1, (the lack of growth) it seems to me three things blocking growth:
Very high indebtedness by most people and countries; and by definition extremely high creditness (I know not a real word) held by a few people/countries. The extremely wealthy people have enough inventions already to appease their senses 24 hours a day, so will struggle to consume more. Some of the very wealthy countries are resisting building consumption as they seem addicted to surpluses. But financially they are the only countries that really have the scope to increase consumption. Looking at you, Germany, China, Japan, Switzerland etc
Finance aside, the real growth potential seems to be in spreading more of the inventions already made among those who cannot afford them currently. So that's an equality of income/wealth issue; and not from an ethical position, but a practical "who has the capacity to consume more, and so drive activity" point of view.
That soon will run into PDK's objection of a lack of energy; and other stuff. So the big invention required will be in new energy sources that are not massively environmentally damaging. I am more confident than him that such inventions are possible, even likely; but that could be because he knows more about it.

Possibly    :)   Ultimately,

Possibly    :)
 
Ultimately, nuclear aside (and currently that's a finite resource with potential long-term repercussions) all energy-sources are solar in origin. You don't invent them, but you invent ways to use them. Hydro and wind, even tidal, are essentially solar in origin.
 
The problem is that the morph has to be done on fossil fuels, and currently we haven't even started, percentage-wise. At this point, I'd suggest that we're not 'growing' meaningfully, globally, and that the 85 million barrels-a-day we consume, are all going into maintenance of BAU. Given the nature of maintenance vs time, that's a losing game in itself. Chuck in increasing demand, dwindling real supply, declining EROEI, reduction in what's export-available, and it's clear we'll have to triage hard and long, to free up the available energy capital to do it.
 
Solar doesn't scale enough to support BAU - there are more than enough kilowatts landing, but we're back to physical capture infrastructure, limits thereto.
 
Are you going to gift this stuff to these 'poor' folk? If so, you'll be 'poorer'. If not, they will be via attempted debt-repayment.

Thanks; On the income

Thanks;
On the income redistribution, the world seems to have headed down a slippery slope where even working middle classes struggle to afford a lot more than relatively basic housing, transport, clothing, food, health needs. The current fairly fierce debate between Republicans and Democrats seems about this issue. 
When I started working I believe a typical large company CEO earned say 10 times the median income in a firm. Now it seems closer to 100 times. More than your energy constraints, (as real as they are) this growing inequality seems to me the larger block to growth. The middle classes are highly indebted and can borrow no more, and so can consume no more. This analogy also translates to countries.
Companies are probably not going to voluntarily revert to more level pay scales- although some public pressure may bring down the more absurd CEO salaries and bonuses.
So as in the US, there will likely need to be tax cuts for the middle classes; and tax increases for the wealthiest. Some form of debt forgiveness may also be necessary, although ultra low interest rates probably already achieve that. How exactly these play out here, time will tell. CGTs; property taxes? Along with pressure still on entitlements? And incentives to work.
And as a country we need to live within our financial means. Current Account anyone?
 
 

Confident based on

Confident based on what?
Energy sources are not an invention btw....the invention is the machine/method to extract/convert it.
So try and spot the new energy source(s), at,
a) A price we can afford to pay.
b) that is transportable
c) is that dense (as fossil fuels)
d) Can scale up
and those are the problem(s)....
regards

Probably based on ignorance;

Probably based on ignorance; and apart from that on a faith in human ingenuity; and also that necessity is the mother of invention. I suspect a multitude of responses.
Smaller scale nuclear and other electricity generation; geo thermal, very local solar, wind etc. Can power things that electricity works well for. Electric cars will likely grow in popularity, and efficiency, and lower price. Battery technology to improve?
Some plant to hydrocarbons- algae etc?
Where dense fuel is essential- e.g. flying; heavy transport?; then hydrocarbons will likely remain the fuel of choice. 
More efficient power in existing appliances- LEDs etc.
On a negative angle, am not sure global warming action will really happen. Oil, coal and gas will likely keep being used while they are financially economic to do so. And I understand there's a lot of coal left.
I like to think NZ is well placed in many of the more environmentally friendly options.

Stephen L - very simply,

Stephen L - very simply, 'human ingenuity can only address the more efficient use of energy, and efficiencies must follow a path of diminishing returns.
 
Nothing else scales;
plant to hydrocarbon starts with solar to plant, solar it is.
Small scale nuclear?  Bigger is more efficient.
Local solar and wind?  by all means.
Electric cars won't grow in efficiency, the motor bit is 90% or better now. Charging losses, discharging losses, build-energy required for the battery, they are problems. Just remember that currently (pun intended) somewhere between 40% and 50% of global electricity is fossil-fuel-powered.
Efficient appliances are good, but Jevons Paradox kicks in - as it has with heat-pumps. Folk haven't saved the efficiency; they've just stayed warmer.
 
We will - globally - burn the oil and the coal. History tells us we're that stupid. Have a read of Prof Jared Diamond's 'Collapse'.

Always happy to learn. Jevons

Always happy to learn. Jevons paradox is interesting

Have a listen to Niall

Have a listen to Niall Ferguson:  a lovely comment about any advanced civilisation operates on the edge of chaos. 
 
Call it a sweet spot.
 
Sure, the subsistence-farming crew (and a few common taters on this Fair Site) can point to 'sustainable' systems which by definition sit far back from the edge of chaos.
 
But they don't scale, and they are incapable of supporting the current populations at anything like our current level of comfort.  One, other or both of Popluation and Comfort would haveta go, and that's not exactly an electable proposition in a democracy.  But then in my darker moments I suspect this crew aren't that fussed about democracy - too many Lesser Minds get to Vote!
 
Demographics will actually take care of population:  Germany, Russia, Japan and China all face hideous demographics over the next 40 years.  Italy is well on the way to halving birth cohorts with replacement rates nearing 1.0.   Mark Steyn is the original RWDB bore on demographics, and it's well worth reading his books if only for the deathbed humour to be had.
 
So that's gonna leave Comfort.....who gets to choose?

As a self-confessed Austrian

As a self-confessed Austrian I have little time for him....though some of the things he comes out with seem to be more voodoo than anything.
Demographics, fraid not....this suggests we have 30 odd year to morf, we do not, we dont even have 10....and we dont want to even recognise we have an issue let alone tackle it.
The problem of living on the edge is of course too far and the drop goes a long way....compounded by the fact that its our energy consumption that keeps us there.
comfort, a good Q, however Im afriad it looks rougher than that.
regards
 
 
 

Oh, bugger, the Friday Fish

Oh, bugger, the Friday Fish Fingers have Struck!
 
On a lighter note, here's AEP from the ToryGraph with a piece of cheery news.  Negative Rates for ECB!
 
I think the technical term is 'One Foot on the Greasy Slide'.
 
Wheeeee!

Oooooooooookay.   Am I the

Oooooooooookay.
 
Am I the only common tater left standing? 
 
Has GBH done another Runner?
 
Has Awkland succumbed to another one of Gaia's Little Caresses?
 
Anyhoo.  Here's a truly spiffing interview (at some length) with AEP.  A bit of Friday Bear!
 

I miss GBH and I also miss

I miss GBH and I also miss Tribeless butting heads with all the Keynesians and Malthusian doomsday cultists...

#5 Ah the Chinese/Huawei

#5 Ah the Chinese/Huawei bogeymen again. Remind me what all those boxes are doing at Western telephone exchanges and their connection to ECHELON and the spy agencies including our own. I'm sure they're only to catch "terrorists" and not keep an eye on internal "subversives" or businesses.
 
Granted the Iranian regime is often barbaric, especially to women but the Israeli/US supported Shah wasn't exactly a democratic paragon of virtue. His secret police SAVAK used to use things like a bacon slicer, and converted wire bed frame as a human grill to interrogate people with CIA/Mossad approval. If the Shah or one of his cronies was still in power it would be US equipment doing the same thing

Mmm and to hear  Barack Obama

Mmm and to hear  Barack Obama warning the Assad regime against using chemical weapons so sooooooon after America sent its Spent Uranium into Iraq is Alice in wonderland material par excellence! Guess you gotta choose your words carefully; the French had the Resistance Fighters but the Iraqis who resist are merely Insurgents. Go figure?

Depleted uranium is a

Depleted uranium is a verboten topic like Israels nuclear arsenal.
 
One man's terrorists are another man's freedom fighters as they say. At the time of the American Revolution/War of Independence the British regarded the 25% of colonists who were rebelling as terrorists I'm sure. 25% supported the British and 50% were ambivalent, just wanted a peaceful life. The "insurgents" won with French help and are now heroes of history.
 
Be interesting where Assads's chemicals came from. Saddam's came from Germany and the US as well as his biological weapons like anthrax when he was a friend.

#5 I seem to recall that

#5 I seem to recall that cisco did the same with china?
regards

Christchurch update ...

Christchurch update ...  http://www.facebook.com/CantabriansUnite
 
       *   (NEW) SEISMIC ASSESSMENTS OF COMMERCIAL BUILDINGS - Way too much "rot" ... and earlier ...
 
 
·       CERA’S vague Christchurch recovery costings spin (Central Blueprint ?)
 
·       Tires of living on New Zealand’s overpriced housing rubbish? Texas examples – superb videos
 
·       EQC reinsurance costs treble
 
·       Ecans $700,000 spend up on Ngai Tahu
 
·       Housing: Mr Key – Get on the programme – Top Scoop...  http://www.scoop.co.nz/stories/HL1212/S00041/housing-mr-key-get-on-the-programme.htm
 
 
Hugh Pavletich

Yay it's Friday....!  Geeee

Yay it's Friday....!  Geeee it's tough on the rundown to Christmas, and take care at the office parties, lotsa stressed people.
 

The Office Party.

 

John, woke up after the annual office Christmas party with a pounding headache, cotton-mouthed and utterly unable to recall the events of the preceding evening.

 

After a trip to the bathroom, he made his way downstairs, where his wife put some coffee in front of him. "Louise," he moaned, "tell me what happened last night. Was it as bad as I think?"

 

"Even worse," she said, her voice oozing scorn. "You made a complete ass of yourself. You succeeded in antagonizing the entire board of directors and you insulted the president of the company, right to his face."

 

"He's an asshole," John said. "Piss on him."

 

"You did," came the reply. "And he fired you."

 

"Well, screw him!" said John.

 

"I did. You're back at work on Monday."

 

 Happiness.

Lol.

Lol.

Regarding #1   The reasoning

Regarding #1
 
The reasoning is spot on. This is exactly the argument that the late and greatly lamented Prof. Sir Paul Callaghan established beyond doubt in his outstanding presentation: "Beyond the Farm and the Theme Park".
 
A failure of innovation has resulted in New Zealand's ever-accelerating fall from being the richest country on the planet. In 1900 we had the highest per capita income in the world. By the 1950s we were still in the top 4 or 5. We’re now about 45th and still sinking.
 
We blather on about farming and tourism being our saviours when, in fact, by providing little other than low-wage jobs they're distracting us from developing the Samsungs, Apples and Nokias which are the only path to prosperity in a resource-challenged future.
 
We whine about not having good enough health structure, education resources, defence, roads, superannuation and the like but the real problem is that we don't earn enough to generate the tax income required to provide the services we lust after.
 
Look at Scandinavia. They pay taxes that would make Kiwi's eyes water. They don't complain because they get very good value from government services and their per capita GDP is so high that despite the fiendishly high taxes they still have far more disposable after-tax income than we do.
 
For us it's gonna get worse.
 
Much worse.
 
RIP Paul. You're sadly missed.

Personally I think PC was

Personally I think PC was wrong....he ignored much that didnt suit his outlook, hence what he said was flawed IMHO.
regards

Paul's views weren't based on

Paul's views weren't based on his opinion but on hard facts. He also put his money where his mouth was and founded a successful high-tech comapny of his own. He supports his argument with facts and figures from New Zealand and around the world which are hard to refute. I'd like to hear reasoned argument against his views from someone who's actually watched the full presentation.
 
His arguments are reinforced by any analysis of successful economies around the world.  Education, innovation and technology provide prosperity. the alternative gives what we have: relatively very long working hours and very poor returns on all levels except for the 0.01% (as evidenced by the chart in Bernard's #9 - we have similar trends in New Zealand).
 
The Labour government knighted Sir Paul for his services, The National government made him New Zealander of the year, the Labour party fronted him up to harangue their last convention and they all totally ignored his message.
 
I've lived through our demise for 71 years.  It's a no-brainer. 

In a nutshell:
Keeping ahead of Botswana - we wish.

  • By 2025 we’re on track to be overtaken economically by Botswana and Khazakstan.
  • We’ve gone from being the richest country in the world to being 32nd by Paul Newfield’s count. According to my current figures we’ve sunk much further: to around 51st. Probably because his figures are for the OECD only. There are plenty of countries not even in the OECD who’ve left us in their dust.
  • Not covered in the video: since 2008 we’ve fallen 5 places in OECD per-capita GDP rankings, Australia have risen 5 places. Catching up with Australia seems to be needing little more work Mr Key.

There is a saying and one Ive

There is a saying and one Ive found to be very true, an academic is a philistine in any area but his own expertese.
What is his area of expertese? physics, what did he comment on? economics and history.
Problem is his lecture and thoughts are built on the past and he was wedded to growth as are the political parties that honoured  him. 
He wasnt all bad, but he looked forward via the rear view mirror.
ie assumed tomorrow will be an extension of yesterday....
http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=107...
I think he's very wrong on green / clean tech but very right on niche....
Consider how many of the companies he names are highly energy and "wealth" dependant.
With future  energy and materials constraints consider where the green party wants to go,
"sustainable agriculture, organic farm production, fisheries management, forestry management, renewable energy generation, and conservation."
All these are highly useful in such an energy and mineral constrained  future. Forget exports as such, its quality of life for NZers....
F&P does well on apnea products, I suggest you look up yotube on how cuba mvoed to a non-fossil oil based economy....very few fat ppl.
 
regards
 

We run into this 'respect the

We run into this 'respect the dead' thing, but I'd wanted to debate him while he was around, for the reason that I thought his approach was flawed.
 
The real question - of Callahan, Russel Norman, and a few intelligent others - is whether they know where it's going, know that it'll just cause a flap to announce the reality, and understand that promoting the 'best track' while maintaining the illusion, is the best approach.
 
The problem with that is that you can't explain the urgency. in complascent tones.