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Britain's rise of the machines and 10 million missing jobs; Here comes Xi; Just study the ABs; London's sociopathic City bankers; Clarke and Dawe; Dilbert

Britain's rise of the machines and 10 million missing jobs; Here comes Xi; Just study the ABs; London's sociopathic City bankers; Clarke and Dawe; Dilbert

Here's my Top 10 items from around the Internet over the last week or so. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz

See all previous Top 10s here.

My must read is #2 on the effects of technology on Britain's workforce.

1. Here comes Xi - Chinese President Xi Jingping visits New Zealand next week for three whole days. He'll be visiting Auckland and Wellington and will no doubt be followed by a massive Chinese media entourage.

This is bigger than Lord of the Rings for New Zealand in terms of getting air time in China. Yet there's been very little coverage or sense of anticipation here.

Everyone is still talking about will Barack Obama be coming or not.

Xi Jingping is a much bigger deal. The last time a Chinese President visited New Zealand was in 2003 and back then less than 5% of our exports went to China. Now 25% does.

President Xi is also a much more powerful President than Hu Jintao was. He's more dominant of his own Government and China is now the world's largest economy by some measures.

He has shaken up China's elite in a massive way and embarked on a hunt for 'tigers and flies' -- corrupt big and little officials. One particular focus is hunting down officials who have fled to other countries and salted away ill-gotten assets in all sorts of places. He won't personally be looking for them here next week, but no doubt there is a team trawling through connections here to find people and money.

Perhaps there'll be a few extra (former) Chinese officials on the plane going home next Friday.

Here's a useful piece from Henry Sender on how China's anti-corruption drive may be driving even more people and money offshore.

China’s anti-corruption drive has found a lot of allegedly ill gotten gains. But the campaign may also be spurring a growing number of wealthy Chinese to send their money out of the country – accelerating capital outflows at a time when concerns about weaker growth are also making the Chinese currency less attractive.

Today, private bankers in Hong Kong are offering mainland clients a panoply of investment choices abroad that have the added attraction of qualifying the buyer for a foreign passport. Demand has soared since the anti-corruption campaign was launched, they say. One prominent lawyer who used to specialise in corporate mergers and acquisitions now helps groups of wealthy Chinese acquire real estate in the US. Such transactions do not attract as much scrutiny and often come with residency rights for the buyers and their families.

Now, the data are beginning to support the anecdotal evidence from private bankers and lawyers. China’s foreign exchange reserves fell by $100bn in the third quarter – the largest drop ever, despite a trade surplus and foreign direct investment inflows. China had registered a $51bn outflow beyond the current account in the second quarter, according to balance of payments data, and September numbers suggest a $122bn outflow for the third quarter, according to Kevin Lai of Daiwa Capital Markets in Hong Kong. All this is a dramatic reversal from the early days of the US Federal Reserve’s quantitative easing, when as much as $1tn came into China.

2. 10 million missing jobs - This Deloitte report using the research of Oxford University's Carl Benedikt Frey and Michael Osborne is a detailed look at what robotisation and machine learning might do for work and wages in London and Britain. There's going to have to be an awful lot of re-training and income redistribution if this is all to end well.

We conclude that 35 per cent of today’s jobs in the UK and 30 per cent in London are at high risk of disappearing over the next two decades as a result of technology. There are significant implications for the number and types of jobs at risk. Jobs most at risk from technology are in office and administrative support; sales and services; transportation; construction and extraction; and manufacturing. However, for 40 per cent of UK jobs (and 51 per cent of London jobs), the risk of automation is low or non existent.

The jobs least at risk are in skilled management; financial services; computers, engineering and science; education; legal services; community services; the arts and media; and healthcare. Frey and Osborne estimate that for the UK as a whole, jobs paying less than £30,000 a year are nearly five times more likely to be lost to automation than jobs paying over £100,000. For London, the ratio is more than eight times.

3. Britain's productivity slump - Martin Wolf bemoans a shocking fall in British productivity since the GFC. He's right that it's rarely talked about in public debate.

Why has the productivity collapse been largely ignored in the public debate? For the government, poor productivity is the reverse of job creation, which it hails as its vindication. Gross domestic product in the second quarter of 2014 was only 2.1 per cent above its pre-crisis level. With normal productivity growth, unemployment would undoubtedly far exceed 10 per cent.

The stagnant productivity has allowed the economy to combine weak growth with buoyant employment, at the price of falling real wages. This has been fortunate. But, as labour markets tighten, the UK must now hope the stagnation ends. It must do more than hope. It must try to make that hope a reality.

4. Study the All Blacks - The Productivity Commission is doing lots of great work trying to work out why our productivity performance hasn't been great and what can be done with Government policies to encourage better productivity growth.

The whole business of squeezing more output out of each hour of work or unit of capital or land is quite nebulous, but crucial. Sustainable improvements in welfare are only possible when we manage it, although there is the subsequent question to be answered about who gets to consume those fruits of the better labours, but that's another matter for another day.

Meanwhile, the business of getting better at getting better is a serious one. Who are our high performers we can study? I'd suggest the All Blacks. What are they doing with their structure, their practices and their management that helps them get better continually? I reckon the Productivity Commission needs to do a case study. Now that would be a fun job for an economist.

Paul Conway from the Commission has written a blog musing usefully about whether all this technology is actually improving productivity. He's optimistic, but acknowledges a few challenges.

 How does the education system respond to avoid skill mismatches when technology is rapidly making many occupations obsolete? How do firms adjust and grow in the face of highly disruptive general-purpose technological innovation?

I’ve never really been one for making forecasts – the world is just too complex to predict what might be around the corner, much less fifty years out into the future. But I am firmly in the camp of the technological optimists. However, while the conditions are ripe for technological progress to go on as before or even faster, we must be vigilant to ensure that bad institutions and policies do not get in the way.

5. Start by investing some cash - One of the problems (hinted at above by Wolf) is that Governments and companies are not investing heavily in new factories, products, R&D and people to get the economy really going.

One thing companies are doing is borrowing more and then paying the cash back to shareholders through share buy-backs. Others are simply accumulating mountains of cash and then doing share buybacks. It's an amazing trick. It increases the company's return on equity, increases its earnings per share and gooses the share price. Voila! There's plenty of New Zealand companies gearing up to do this too, including Auckland Airport and Mighty River Power.

Here's John Plender from the FT calling for an end to corporate cash hoarding.

Federal Reserve data show that the US non-financial corporate sector has gone from being a net lender to the rest of the economy, to the tune of nearly $500bn at the peak in 2009, to being a modest net borrower in the first half of this year.

The snag is that this newfound confidence is not being reflected in non-residential private fixed investment, which Fed economists reckon increased at an annual average rate of only about 4 per cent in 2012 and 2013. Net investment after depreciation as a percentage of the capital stock remains subdued, hovering around 1.5 per cent a year.

In effect, animal spirits in the corporate sector are being diverted into share buybacks. Such financial engineering reduces the number of shares in issue and artificially boosts earnings per share. For executives whose bonuses and incentive packages are related to earnings per share this works wonders on overall pay. For shareholders it may be another matter.

With equity valuations historically high, this is unlikely to be an efficient allocation of capital. That reflects an ownership vacuum. Over the next 12 months we will find out how damaging this might be for the real economy if quoted businesses continue to invest only halfheartedly in equipment.

6. The living wage - One of the reasons why companies are not investing in new capacity is they can't see the demand in the future from actual consumers to soak up the extra capacity. One reason for that, in the United States at least, is falling real wages, some say since the 1970s.

One way wages were lifted from the 1930s to the 1970s was through strong union movements. They were killed off or died through the 1980s and 1990s all around the developed world. Now some are making a come-back, or at least trying. One new tactic is the push for a Living Wage. New Zealand has a version, which has had some success with the likes of The Warehouse and Wellington City Council.

Apparently, the New Statesman says, the living wage is re-energising the progressive left in America.

Frustrated by the impasse in Washington, campaigners have begun to take matters into their own hands, and, fuelled by further intellectual support in the form of Thomas Piketty's book - a bestseller in the country - a wealth of anti-poverty campaigns and activity is spreading across the country. Although less glamorous than the rock 'n' roll Occupy Movement (which was named the "person of the year" in 2011 by Time magazine and quickly adopted as a brand by the rapper Jay-Z), they are slowly but surely bringing issues of low pay and inequality back to the fore.

Earlier this year, a long-standing "Fight for 15" campaign in Seattle was victorious after the council unanimously voted to impose the highest minimum wage in the US at $15 an hour. Fight for 15 are hopeful that San Francisco will commit to the increase when the proposal is voted on in November. In Los Angeles, the Council is pushing to raise the minimum hourly wage for employees in large hotels. Mayor Emmanuel Rahm, Obama's former chief of staff, is under pressure from the living wage movement in Chicago and is aiming to raise the minimum there to $13 per hour. In New York, Oakland, Washington DC, San Diego and San Jose, there are active and prominent campaigns pushing at city and state level to raise wages for the very poorest.

7. The great US wage stagnation - Just in case you think all this talk of flat wages (in the world's largest economy at least) is just a leftist plot, here's David Leonhardt in the New York Times with a juicy chart showing what has happened to real household incomes.

He suggests a few solutions, mostly involving going for really fast growth. He also wants a tax cut for the middle class. In New Zealand we delivered that through Working For Families.

As the 2016 presidential campaign begins to stir, the central question will be how both parties respond to the great wage slowdown. Neither has offered a persuasive answer so far — let alone a solution — which is why the public mood is so sour and American politics has been so tumultuous lately. The partisan makeup of the Senate has seesawed more over the past decade than in any time since just after World War II. The Republicans won big victories in 2004, 2010 and 2014, the Democrats in 2006, 2008 and 2012.

All the while, incomes keep stagnating, and nothing influences the national zeitgeist quite so much as income trends, for understandable reasons.

What can Washington do? The answers are very different for the short term and the long. Over years and decades, nothing matters more than economic growth. The last period of strong income gains — the late 1990s — was also the last period of strong economic growth.

The best hope for doing so, in the immediate future, is probably the oldest and most obvious play in the book: a tax cut.

A few years ago, a middle-class tax cut would have seemed a silly idea. Both Mr. Bush and Mr. Obama had already cut taxes, and the federal budget deficit was enormous. But the deficit has since fallen sharply, thanks in part to lower health costs. Meanwhile, middle- and lower-income families are reaping a disproportionately small share of economic growth. Having the government try to rectify the situation doesn’t sound so silly now — and probably won’t in the 2016 presidential campaign.

8. Where did the money go - All this talk of stagnating incomes is at odds with the economic growth America (and us) have been having for three or four years, or the last 20 for that matter. Where did it go? Not to households in general and less skilled workers in particular.

These charts tell the story, courtesy of Paul Krugman.

Wages for ordinary workers have in fact been stagnant since the 1970s, very much including the Reagan years, with the only major break during part of the Clinton boom. My first chart shows wages of production and nonsupervisory workers in 2014 dollars; we have never gotten back to 1973 levels.

The second point is that rising inequality is a big part of the story for stagnating household incomes. My second chart shows real GDP per household — nominal GDP, deflated by the consumer price index, divided by the total number of households; and compares it with median household income, both expressed as indexes with 1979=100. We’ve had substantial income growth since then, but very little for the median household, because so much of it has gone to the top.

9. ##$$%%!*! ing London banks - John Plender at the FT is still shaking his head at the rottenness of the London and New York banking cultures that created the GFC and have just been caught doctoring LIBOR and forex rates in London. They paid shareholders' money out in fines and seem to be carrying on their merry way.

By now the pattern is familiar. The directors and top executives were in charge but not in control. Their response to criticism over earlier scandals had been hopelessly flabby. All those pious words about raising ethical standards and cleaning up the culture were so much flannel. Meantime, traders left an incriminatory trail in the chat rooms in colourful language confirming that the people who inhabit trading floors are closer to the animal kingdom than the rest of the (unjailed) population.

In effect, they are bonus-hungry hired guns who show no loyalty to their banks, customers or the markets. They have thus threatened the integrity of a systemically important market and undermined confidence in the wider financial system.

Clearly the culture of the world’s biggest banks is fundamentally rotten. The question is whether it can ever be cleared up. It is hard to see how that is going to happen as long as the main thrust of the regulatory response to such egregious behaviour is to fine the banks, thereby bleeding shareholders, rather than go for the directors and executives who have so signally failed to respond to regulatory exhortation.

10.Totally Clarke and Dawe on Tony Abbott's petrol tax, scientists and dealing with reality.

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30 Comments

#8 - Just verbalising what most of us are already feeling: we're being pinched, and stretched at both ends. The extra cash, all that printed money, hasn't gone into the pockets of those who would keep a real aconomy going.

 

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Bernard provides no evidence or data to indicate how far the US position described here is replicated in or representative of New Zealand.  

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An annual one percent increase for CPI certainly helps to focus upon the likelihood that the masses are unable to compete for discretionary goods purchases with spare disposable income.  Read more at Stats NZ, if they are not on strike for higher incomes.

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Of course you supply no evidence this is not the case.

Take the inequality index, fairly flat? however thats included the likes of WFF.  So taking out that "cash back" jsut waht would that index really look like?

 

regards

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I think we are in agreement, Steven; discussion about inequality in New Zealand, and how Government policy affects it and/or should address it, should be based on evidence of the situation in New Zealand and not on evidence from the US, where the extent and nature of inequality, and Government policy, and political and social priorities, are all quite different from how they are here.  

 

Bernard does New Zealand no favours by continually presenting evidence from the US without any attempt at examining its relevance to New Zealand.  This merely misinforms and misguides the debate.

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In response to most of the points above.

First you must read

Robert J Gordon's NBER Working Paper Series - Is US Economic Growth Over? Faltering Innovation Confronts The Six Headwinds.

At the moment i am trying to put into words my thoughts on the future. I believe, in this respect, we can do better than we have in the past at predicting the future. Perhaps not enough thought and effort has been used.

What i am trying really requires the experience of a Historian and people better suited than me. But someone has to make a start.

 

People talk about a "Living wage" or a "Big Kahunda" but get real, it is not going to happen, "Never".

 

Take a look at our education system and all this student debt. What government is going to pay people, a living wage, to sit at home, when they wont even pay for your education?

 

I am trying to look at our future by extending our past. The three major lines i am following are

War

We have spent thousands of generations improving the way we kill other humans. So that is not going to change in our future.

Leadership

We have moved from Tribal leader and War Lords to Kings and on to Governments. These forms of leadership are "For our own good"

Now governments are creating governments (UN and EU) to control them "For their own good"

This trend is unlikely to change in our lifetime. The only question is "How many governments of governments will we end up with?" And note a loss of Democracy with it.

Work

We have always had to work. Initially to hunt and gather our own food. Then we worked on farms and then moved into factories. Today our work is largely producing for our pleasures called "Service work"

I will cut this short and just say my vision of future work.

It will be in a "Virtual Reality world" and i will leave it at that for now.

And, looking back, governments usually support  the employer more than the worker. They have even used the police to break strikes.

Add to this Corporate globalisation and all this surveilance and, i believe, a picture starts to emerge.

 

Try extending the past into the future and maybe you will find something.

 

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#2 This video is an excellent summary of the effect of automation/AI/robots. From minute 9 it is all about high paying, high skilled jobs. Good reason for a UBI/GMI but will require completely new system of redistribution

https://m.youtube.com/watch?v=7Pq-S557XQU

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#1 Perhaps John Key could offer to set up a joint taskforce to track down all that dodgy money in New Zealand and perhaps sell the ill gotten assets on behalf of China for a small commission. That might have an effect on the Auckland residential and commercial property market. Sky City could be a tad upset though

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This Gov't will not do anything that will upset Sky City.

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If inflation is threatening to go below 1%, and while the exchange rate is "unjustifiably high" if I were Mr Wheeler, I would happily fund $x billion of middle class tax cuts (so at the lowest tax rate, a cut for all) where x is the number that should get inflation back towards the target of 2%, and/or the exchange rate where it is not unjustifiably high.

In my view this would at least mitigate a number of economic balance and equality issues.

Reserve Bank writes cheque to Treasury in other words. Make it clear that they are short term; say for a year, if and until balance improves. Rinse and repeat next year if they haven't.

 

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Sounds like a good idea Stephen, my only concern would be those tax cuts would go into property rather than stimulating real growth.  I wonder how big those tax cuts would need to be.  They could always reduce GST for a limited period like they did in UK.

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The GST idea could work. Depending on whether it was "looked through" it would actually reduce inflation technically, but maybe looking through it would make sense. Such a move would be easier to reverse out later, I accept. Income tax cust always do encourage production; GST a little less so. But worrth considering for sure.

Would either low end income or GST tax cuts go into property? I think less likely than interest rate cuts, which are the traditional method. And interest rate cuts arguably go to the highly leveraged, but not necessarily to the middle class spenders. 

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The problem is in terms of income the middle class are not "spenders", they are savers as they have descretionary income.  Also no tax cuts do not always stimulate production especially if they are middle and up. This is a classic right wing arguement and is I think shown to be wanting to say the least.

regards

 

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I believe when the US talks of the middle class they are referring to people we might consider lower middle. Workers who spend everything they earn. Give them tax cuts and they will want to earn more and will spend most of it. The bit they don't spend will pay off some credit card debt. If you give cuts at the bottom end everyone does get them. GST cuts are the same. Infrastructure is a reasonable option. What would you build here? Quite a bit goes offshore.

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Well right now we are not at the zero bound trap so dont need to spend much unlike the USA.

What could we spend it on? well I'd go for Green tech, infrastructure.....fix leaky schools...etc.

regards

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Well, that just about confirms what i've always believed: I'm no longer "middle class" as our savings on one income are minimal.

:-) 

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Tax cuts of GST cuts are very difficult to reverse politically and also dont seem to stimualte much.  If you want a positive ratio of "spending to return" then the Govn spending on infrastructure works is a one off so easy to finish and also can have a multiplier of 1.6 to 1. The main thing is it creates jobs filling a private sector spending void until the private sector start to spend again, so the sepnding is also offset with less welfare outgoings as well as churn in the system.

regards

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Fortunately for NZ  then you are not.

The last thing we need or want is middle (and in effect) upper income tax cuts, all that would do is give ppl with descretionary income yet more which they will put into housing, so bad idea.

On top of that tax cuts are a poor way to stimulate the economy when Govn spending on public works can give a return factor as high as 1.6 to 1, tax cuts Im not sure they even break even.  However both these only need to be actioned when the OCR is an effective zero, it isnt it can be dropped 2% yet with ease. At the same time chop a few % points off the LVR ratio, say to 77~78%.

regards

 

 

 

 

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I'm struggling to understand your logic here Steven - "tax cuts will be put into more housing", but mortgage rates based off a zero OCR wouldn't ? This is the situation some are getting themselves into, the notional vaue of property and therefore debt levels are so high they clain we need even lower interest rates, yet lower interest rate keep making the property values and debt even higher - surely people can stand back and look at the bigger picture here ? Who cares what happening to CPI inflation, asset inflation dictates higher rates before the system stops - and inevitably when something is unsustainable it will stop and revert to mean.

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Within the context of what is the better way to stimulate the economy when in a zero bound trap Govn spending on infrastructure gives a 1.6 to 1 or so boost.  So for every dollar spent into the economy gives a x1.6 return.  Tax cats its seems are more like 0.8.

NZ of course isnt in a zero bound trap yet, the OCR can be lowered to 1% even 0.5%. WHo else does a low OCR help? well those directly under borrowing stress, businesses having to borrow due to cash flow, FHBers.  Tax cuts are just a scatter gun even "helping" ppl who dont need help and it seems not a very effective one.

regards

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You may not care about CPI but I do because at 1% and dropping from higher figures that signals deflation and a recession, even a depression possibly as bad as the 1930s.

Also a high OCR is direct stress on many FHB households and businesses who have to borrow to survive.  At a CZPI of 1% the huge danger is a too high OCR will trigger a recession and job losses, (and maybe worse) Sweden looks to be a classic case for that oops, go take a look.  

Assets cannot be controlled with an OCR anymore after peak oil.  Plus when ppl are convinced they can gamble and make a lot of money, well how do you fight that illogic?  Well LVR tools, stop people inflow, ban foreigners owning property and land. 

Raising the OCR to cure the un-curable (by OCR rises) will seriously undermine much of the rest of NZ's economy and if that falters it will bring housing down anyway.

regards

 

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I'm certainly not arguing for tax cuts Steven, but if you really want to put a rocket under house prices,  yes cut the OCR - the FHB will thank the RBNZ for that won't they ?. That will give you a nicely lower NZD as well, and absolutely bugger all chance of disinflation let alone deflation. Talk of deflation in NZ I notice seems to be mainly touted by those who seem to desperately need lower rates - christ, they've only got a mild version of it in some parts of europe at the moment, a place with zero growth and a huge contraction in credit after a  period now approaching eight years. And those that are going to compare us to europe lose all creditability to my mind.

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My problem is if you dont cut the OCR then there is a real danger the economy will in 2015 go into a recession IMHO, once in its hard to get it out.  What is the risk of overall inflation? very little IMHO as there are no wage increases and that can be countered fairly easily, deflation not easy to counter.

I dont see a lower OCR effecting FHBs that much because the LVR in effect limits the FHBers buying instead of the OCR. Those FHBs already in well the OCR going lower and assuming the retail rate drops will be under less stress.  

The future of the EU I think looks bleak, sure its mild right now but that trend seems down and unstoppable.

BTW I an taking tax cuts v Govn spending in the context of stimualting the economy in a particular environment that of teh zero bound trap.

"Touting" well I have no need of a OCR cut myself, what I am looking at is the evidence of what happens when it is too high.

regards

 

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Cut OCR to what level? Please post your model confirming your decision so the readers can gauge the validity of your claims.

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LOL, there you go spouting anger it seems. So where are your models supporting your point of view? of not dropping the OCR? OMG, raising it? otherwise you talk crap IMHO. 

a) No one has such a detailed model of our (or any country's) economy, if I did I certianly wouldnt post it. 

b) If I had such a fantastical model who here could judge its validity?   you? unbaised? yeah right.

c) We dont need a detailed model as such as have some recent real data to look at of NZ recent history.  Look at the CPI and OCR from say 6months before the RB started to raise and plot both forward. Graphically that might give us a ball park figure of where the OCR probably needs to be.  Not a lot of math, just paper and pencil (or excel).

d) Simpler, So if the CPI was rising too hot before and now its looking flat and maybe collapsing then an OCR somewhere in the middle would be a starting point for a setting. We can probably iterate an approximate setting.

e) Third, so the "rapidly" rising CPI was over-corrected for in the OCR changes, that actually looks like a classic PI[D] controller setup problem.  Someone with maths in this area could probably model that controller and get a good (enough) plot.  You could then feed in a lower OCR and see what the graph of CPI plots like then. 

But lets examine another possibility,  another actual piece of real life data and hence a model, Sweden. We can see their graphs of what they did to their economy  in black and white, their RB buggered their economy by raising too far and (maybe) too fast.

and your plan is what? do nothing and collapse a sector of our economy? Let that sector drag us into another recession? send up un-employment?

Whats the negative of dropping the OCR btw? we see some job gains and then som inflation? in wages across the board where it counts?  and that is so hard to squash when its actually occuring with an OCR hike?

Hmm, no.

regards

 

 

 

 

 

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So, in fewer words and less bile you couldn't call upon the shining success of the zero bound interest rate economies of US, EU and Japan in defence of your rate cut prescription?

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Um no, "All else being equal" lets see the austrian sourced austerity they put themselves under were not significant factors? Are you really that blinkered  that you cant see that the mixture of failed Austrian / austerity polices by Governments in the EU and around the world have not been big factors? 

EU, because of the inability to devalue a nation's currency because of the Euro has meant that the likes of Spain cannot get "competitive" except via actual wage reductions?  and since wages are sticky that means ppl have to lose jobs and then a) not get another job or b) take jobs at less salary and/or less hours which in turn has no effect on inflation you think? c) What about the huge un-employed youth inthese countries? you dont think that might not cause some social "unrest" or teh fact that such a big % of youth may well never earn enough to buy over-infalted housing off BBs desperate to get some cash?

Really the world seems to be going to hell in a hand basket greatly assisted by right wing ppl and pollies praying to broken austrian or make believe economic models, leaving the RB's to try and catch an economy. Worse the same right win pollies have been blocking attempts to do classic Keynesian fixes when in the zero bound trap, screaming for OCR rises which demonstratably are disasterious and then blame keynes for teh failures?

Yeah sure I am a bit p*ssed.  I see blinkered ppl wedded to a broken ideology intent on causing others hurt despite the copious evidence that their economic ideals are a failure. 

Who of those watching this such as myself or those actually suffering at the hands of others not suffering (and even making money) wouldnt be gob smacked at the "im OK so f**k the rest of you attitude"?

How did it go? "let then eat cake"?

That ended well for a few of the French didnt it.

History is a rinse and repeat it seems.

regards

 

 

 

 

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Ok, drop the EU out of the equation and add the UK to the US and Japanese zero bound interest rates economies and explain what good lower interest rates have done for anybody but the top 1%. 

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NZ v EU of course you cannot compare today's state, however the effects of policy and what it does, yes.

Like I said Sweden raised the OCR and buggere dits economy, lets not repeat by example.

regards

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Are the all blacks actually productive though? don't get me wrong, they are the best at what they do, but being elite is in no way related to being productive. Arguably they are they far end of the bell curve of one of the strongest rugby nations in the world, and you've got to take into account the contributions from the rest of the nation (starting from the people who organise schoolboy rugby on up).

They may well have excellent monitoring and improvement systems, which people could learn from, but those have their own cost inputs and are not the same thing as productivity.

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