Alex's politico-economic blogroll: Why Cunliffe won't be the next Finance Minister (and Brash will); Nolan rips Greens' jobs policy to shreds, and what others think; NZ economically free; Cartoons

Alex's politico-economic blogroll: Why Cunliffe won't be the next Finance Minister (and Brash will); Nolan rips Greens' jobs policy to shreds, and what others think; NZ economically free; Cartoons
Will Don Brash be NZ's next Finance Minister? David Haywood's done the maths, and thinks he has the answer...

Here's my blogroll for the week. Have a good weekend all. Bit of reaction to the Greens' economic policy released earlier in the week. 

1. Why Labour's David Cunliffe will not replace Bill English as Finance Minister - his cranial diameter is average, whereas every NZ Finance Minister since 1975 has been in the top or bottom 1% of head size. Public Address' David Haywood gave this hilarious presentation in August after 'researching' cranial diameters, building on prior research done by Shane Jones and Owen McShane.

The measurements are fictitious of course, but it's very funny.

From the research he discovers Don Brash will be New Zealand's next Finance Minister, due to his very small cranial diameter. That's because no one currently in Parliament fits the requirement of being in the top or bottom percentiles of head size, so it must be Brash, who will be brought in on John Banks' coat tails as the ACT Party leader.

English apparently has a very big cranial diameter of 49cm, although it is shrinking, meaning he will be rolled after the election, Haywood finds.

Rob Muldoon (28 cm), Roger Douglas (26 cm), David Caygill (26 cm) and, it seems from the presentation, Michael Cullen, also had large craniums. Ruth Richardson (11cm) and Bill Birch (11.09 cm), who hired Don Brash as Reserve Bank Governor, had very small head sizes.

Cunliffe's cranial diameter is only 18cm, which is average and therefore won't allow him to be Finance Minister, Haywood finds.

The first half of the it is Haywood having a go at Katherine Ryan, with the head size research coming in after that. Good fun.

OGB 2011 - David Haywood from Public Address on Vimeo.

2. The Greens surge. The latest Roy Morgan poll had them dropping off a bit, but the Green Party has certainly been trending up in the polls lately. Whether that's because Labour's hopeless and its voters are turning Green (pun intended), or whether voters are starting to like the more 'sensible' image the Greens are putting forward, we don't know yet (it's probably a combination).

The Greens, led by Opposition finance spokesman Russel Norman, put out their economic policy this week, and found acclaim from a number of political columnists.

Anthony Robbins at the Standard has mixed feeling about the Greens' rise, not due to them stealing votes off Labour it seems, but because they're moving away from where they (properly) started under Rod Donald and Jeanette Fitzsimons.

I was a big fan of the party of Rod Donald and Jeanette Fitzsimons, and I’d hate to see the Greens lose their political soul.  On the other hand I support any party of the left, and I’m happy so see one doing well (yes even at Labour’s expense, I’d be happy see Labour dragged to the Green / Left a bit!).

I’d be particularly interested to hear what Green supporters think of the party’s “new direction”.  The proof of the pudding is coming up in November of course.  The Greens always seem to poll better than they perform in the election.  Will they break the mould this time?

3. And here's the latest Roy Morgan poll, conducted between August 29 and September 11. Labour has tanked since July, while National spiked up. The Greens fell a bit in the latest poll, and are sitting below that 10% mark they'd love to get over in the November 26 election.

4. '100,000 jobs' claim deceitful marketing from the Greens, who actually have some good policies, but feel they need to market their package on short-term stuff. Idiot Savant at No Right Turn has this to say about the Greens' economic policy:

I've spent the morning reading through the Greens' "Green jobs initiative" [PDF]. The short version is that the Greens are promising to "create 100,000 new green jobs through business incentives and government leadership", specifically through increased investment, building a clean energy sector, and increased support for a green economy. But when you look at it, its not really about jobs at all; rather its about greening our economy, with jobs as a byproduct. Political marketing means that that byproduct is being highlighted, in a way which is at times outright deceitful.

The bulk of the policy is about "big picture" economic issues. Ending ETS subsidies. Water pricing. A capital gains tax. Increased R&D funding. These things don't directly create jobs in the short-term. But they move our economy onto a more sustainable basis, and force innovation on the sclerotic private sector, making us more secure in the long-term. Sadly, such long-term thinking is difficult to sell, and doesn't have an easy marketing tagline, so these policies aren't highlighted. Instead, the focus is on immediate, short-term stuff. But even then, jobs are really a byproduct.

5. Unsurprisingly David Farrar at Kiwiblog isn't impressed by the Greens policy:

I’ve noticed that this election that the Greens have billboards and slogans along the lines of “Vote Green to grow the economy”. This is radically different slogan from their rhetoric of a few years ago when the Greens would denounce economic growth as evil and actually argue against growing the economy.

I’m not convinced that their policies have changed, just that they have a better advertising agency. The so called policy to create 100,000 jobs  in fact has less substance than an anorexic Leptotyphlops carlae. Take their claim of 47,000 to 65,000 new jobs from renewable energy. They said:

The global market for renewable energy technology is forecast to reach an annual value of $590–$800 billion by 2015.6 If we can secure just 1% of this market, we can build a new $6–8 billion export industry here at home, creating 47,000–65,000 new cleantech, high-value jobs

Translation provided by a financial analyst:

So if the global market for green tech gets to an incredibly high number and if we could secure 1% of this incredibly high number and if those were highly-paid jobs and if they didn’t replace any other jobs in the economy then hurrah – we would have 65,000 jobs!

6. Why wouldn't they be leaving? Peter Cresswell at Not PC isn't surprised by stories of Christchurch property developers leaving the city once they've got their insurance payouts.

And why wouldn’t they? For one year they’ve been kept from their buildings and treated like mushrooms—allowed to visit to extract the important tools of their business only for ten minutes at a time, and only after loud and repeated protests; not even given the courtesy of consultation about the demolition of their own bloody buildings; and then told by the ruling junta what grand plan they intend to impose on property-owners’ property, with or without their consent.

So why would property-owners stay and re-invest there, now that they’re newly liquid?

7. What world are the Greens living in? Economist Matt Nolan rips the Greens' plan apart with this fantastic little rant. He had been considering voting for them, but...

FFS, just when it sounded like the Greens were going to come up with sensible policy prescriptions we get this absolute piece of rubbish.

If this is how we base policy why don’t people just make plans as follows:

1. I will talk with people in important tones during very serious meetings,

2. I will offer to give them money arbitrarily

3. …

4. Therefore:  I will create jobs, income, sustainability, and cute kittens.

Seriously, in what world does a massive building initiative make sense when we are going to be struggling to rebuild Christchurch during the next decade given capacity.

In what world does giving money to green entrepreneurs (I would call many of these people marketers) provide “65,000 additional jobs”. [Pro-tip:  1% of the global market is HUGE - remember that we are less than 0.1% of the global population - so saying "just", especially given foreign subsidies and scale, is ridiculous].

In what world do these policies not crowd out other industries – guess what, skilled workers are already in work, you will be just driving up their wages with your arbitrary industrial policy.

Tbh, this rings of policy made by people who just want to win an election, and have very serious meetings with policy analysts and people who make glossy leaflets.  It shows no reality, and no willingness to think about trade-offs.

8. Why aren't they writing out new insurance cover? Economist Eric Crampton at Offsetting Behaviour has some questions for those not writing new policies:

I remain a bit perplexed about why people can't get new policies. You can't insure against a certain risk, but if the risk of another February hitting Christchurch is around 5%, you'd think reinsurers would be happy enough to issue cover at a fairly high premium. Some potential explanations:

Reinsurers fear being saddled with the costs of prior quakes in any new event if a full assessment of a property's prior damage hasn't been completed

But then, why is there difficulty in getting coverage for new builds?

Uncertainty over what portion of future claims will be covered by EQC if the EQC fund is exhausted,

But then, wouldn't we expect solution through better insurance contracts? 

Reputational costs of actuarially fair pricing would swamp potential returns

But reputation accrues mostly to the local agent, not the big reinsurer; for those, reputation is determined, I would have thought, by track record in paying out.

I think we need a fair bit better understanding of what's going on before we start nationalizing insurance companies

9. NZ high up in terms of economic freedoms. Paul Walker at Anti-dismal picked this latest study up. We're third in terms of all that free-market stuff....

The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas:

  • Size of Government: Expenditures, Taxes, and Enterprises;
  • Legal Structure and Security of Property Rights;
  • Access to Sound Money;
  • Freedom to Trade Internationally;
  • Regulation of Credit, Labour, and Business.

The top ten countries in this year’s index are

  1. Hong Kong 9.01 out of 10;
  2. Singapore (8.68);
  3. New Zealand (8.20);
  4. Switzerland (8.03);
  5. Australia (7.98);
  6. Canada (7.81);
  7. Chile (7.77);
  8. United Kingdom (7.71);
  9. Mauritius (7.67);
  10. and the United States (7.60).

10. Worst misses ever. Had some news bloopers last week, so here's some football bloopers this week. 10 worst misses ever. Painful. Have a good weekend all

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?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

41 Comments

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Highlight new comments in the last hr(s).

Good lord, if NZ is third on the list for economic freedom, with government spend at 45% of GDP, I dread to think of what state some of the other countries must be in.

And they're missing a vital measure of economic freedom: government spend on IRD, in NZ at 8% of GDP, and the powers to destroy business and indviduals that department has in a country. For example, in New Zealand, IRD are currently trying to chase away the investment made, and jobs created, by some major Aussie companies. Clueless.

Wow, this was deleted off Stuff in seconds and replaced by Gerry's spin on the job, that was quick, like, his spin department must have been all over the Dom in seconds of the story being released. Free speech is such a wonderful thing, unless it doesn't suit the cause of course.

>>>>

New Zealand faces the prospect of limited or no natural-disaster cover within a year as global reinsurers shy away after the Canterbury earthquakes, the Insurance Council says.

Council chief executive Chris Ryan said New Zealand needed to be prepared to join the likes of Japan and California, where natural-disaster insurance was limited and expensive.

http://www.stuff.co.nz/business/industries/5671180/Reinsurers-wary-of-New-Zealand-disaster-risk

Governments man on the job says, watch the ending ;-)

http://www.youtube.com/watch?v=X16G2hsVI9w

Andrew - you are again straight on the point !

 We are all thinking, talking - and nothing has been done.

Roubini : The risks ahead are not just of a mild double-dip recession, but of a severe contraction that could turn into Great Depression II, especially if the eurozone crisis becomes disorderly and leads to a global financial meltdown. Wrong-headed policies during the first Great Depression led to trade and currency wars, disorderly debt defaults, deflation, rising income and wealth inequality, poverty, desperation, and social and political instability that eventually led to the rise of authoritarian regimes and World War II. The best way to avoid the risk of repeating such a sequence is bold and aggressive global policy action now.

 http://blogs.reuters.com/great-debate/2011/09/19/how-to-prevent-a-depression/

 What makes me wonder is, why are these financial/ economic experts, policy- makers incl. politicians in charge not taken the massive impacts of climate change, increase natural disasters, men made catastrophes, political worldwide wrangling have, costing societies trillions into consideration. Because experts are so one sided in their views, hardly anyone draws attention to complex correlated problems in their analyses/ assessments.

Therefore I think the depression scenario and the fall of societies is taking place far sooner, then most experts even think of.

 With other words:

What most experts suggest is the world driving a brand new car, needing usual expenses only, but unfortunately it isn’t a new car - 200’000km are already on the odometer. Maintenance, repairs and especially unexpected costs are growing massive.

Time to act - change the driver(s) first  and then the car !

.  

Andrew, I am not sure why you are surprised.

a) What you describe is what a propaganda machine does, and has done for at least decades. George Orwell's Nineteen Eighty-four is based around the subject.

b) Stuff is part of Rupert Murdock's empire. Start thinking of Murdock's 'News of the World' transported to N.Z. and how that might be translated into money, power and influence.

c) I have been pointing out that the media are integral to defending the status quo. You have just provided a good illustration of that in action. Well done, and thanks.  

Christov - I submitted that one weeks ago.

Apologies Walter........I must have missed it.....cudos to you for being on the ball..!

.... ooops ! .. You're on the " bloopers " list , Count .

.. But fair dos , it is easy to miss some of the stuff that gets put up : Alotta bloggers @ interest.co.nz  , .. and some of us have to clear off from time to time to gee-up the revolutionary hoards , and the retrospectively whores .

Hang 10 , good buddy ! Stay cool , man .

There's no getting one past him GBH.....Swiss Goalies uh..!

Who is the idiot that decided not to provide the free tickets to the choir members who sing the national anthems, after they were told they would receive the tickets....who is this mean bugger.?

Either Revenue Minister Peter Dunne or someone from the IRD . ... . You cannot have a freebie in Godzone , everything must be accounted for , signed off in triplicate , and taxed appropriately .

.. these bloody choir singers are leeches on society , and they need to pay their " fair share "  !

Not likely Peter Dunne, he's so far left he's on a permanent lean and giving away tickets to those less well off would've been right up his alley.

Maybe the choir members need to complain to Len Brown that they missed the game because of public transport issues.  Len will happily compensate them.

Maybe they were means tested to be sure they were "less well off" enough and failed the test.

We need the Govt to 'name and shame' these Choir singers, its the only way

I think there may have been a fresh Harvest ...just before the Greens anounced their job creation policies....sounds like it was a really good crop too..! 

Bernard,

Why do you and other political commentators hold the Greens up to higher standard's than other political parties?

When the National Party launched the "Jobs Summit" back in 2008, its intent was infact to prevent the failure of capitalist firms, which otherwise would have happened without government intervention and using the "Jobs" label as a convenient cover. Who's going to argue or even criticise a Summit aimed at protecting the jobs of hard working Kiwis, other than the coldest hearted Marxists?

I think this confirms my suspicion the green party hasn't any economic qualifications at all.

**Insulating homes is a good long term goal, but the employment it creates will collapse as soon as the government subsidy/program is removed.

**Requiring all rentals to meet yet more regulatory standards and check boxes will drive rents up which affects the poorest part of our community.

**Renewable energy is the most expensive energy there is.  So they are just as likely to create drive up the costs of energy for everyone in NZ.

**In my book taxing carbon is as silly as taxing oxygen, so can't see anything but an increased tax burden for us all there.  Even if you think carbon is evil the cost of living still goes up.

**Tax boosts for  "clean tech" - so lots of regulations to define thar meaningless phrase.  If they are lucky they can create another little industry that collapses as soon as the subsidies end.

**Government buys local sounds loyal and okay as far as it goes, but also has the flip side of driving up cost of government if local sources aren't competitive.

Seems like the only plan is to spend more, tax more and drive up costs of living for everyone.

Ralph - you really are a yesterday thinker.

Like so many, not prepared to open up to anything which might spoil your little dreams.

What they will be aiming at - unless the new lot are complete morons - is to get us  the best physically-prepared we can be for what is coming, commensurate with getting enough mandate to do so.

Given that the media keep churning out the horseshit (to me, you prove that they have/are) that's probably the best they can do.

In her valedictry tour, Jeanette Fitzsimmons stated that if we were going to have changed in time, we'd have done it by now. She said somethiong along the lines of "the planet is stuffed - but it's never wrong to try to do something about it".

There will be folk in the Greens who know - clearly - that peak energy meant peak finance-underwrite. They'll know that there's a cliff.

http://www.peakoil.net/uhdsg/

How do you grow what money buys on the back of that, Ralph? Exponentially and forever?

Spare me.

One thing I notice....the deniers are not that bright and cling to their version of reality like a limpet to a mine......to stupid to realise that their limited horizon is the curve of the bomb..........

regards

Nothing new about people that are so short sighted that it is astounding to those that can actuallly think.

The list above is so pitifully weak that it isn't even worth the time to address them. Obviously that sort empty reasoning has plenty of company going by the ratings of the post.

Insulating homes, reduces power needs....both peak and capacity in lakes.....in two or three consecutive winters we would be in dure straights.....let alone saving teh poor money...

Rentals, now I agree that this will either drive up rents or make some PIs sell.....it has to be economic.....and Ive had huge arguments with "fellow" green's on this, my answer is trun on the heater, or what do you think the rent will climb to if landlords are forced to do this?  they have no reality on ths one but Ive argued to deaf ears for weeks now.....ended up with them thinking Im a pig fascist greedy landlord...  Poor ppl are usually poor for a good reasomn they are thick.

Renewables, we use 17TW per annum globally, much of that is transport fuels.  Where the heck do you think its going to come from and its cost post peak oil? You are nuts if you think this cheap era will last, its finishing and the time lag from loss of production to having repleacements will kill us economically. So subsidizing renewables now gets them in and on site and working ready for when prices rocket....it will save our butts...in short you are going to be paying anyway, make your choice, a bit mor enow per year for say 5 years or cheap for 3 or 4 years then triple or mosr the cost...."price signals" will hurt like you will not believe.

Carbon, yes its known as changing behaviour....like getting smokers off their tobacco drug.

"The only plan"  our costs to live are going to go up.....let it ramp gardually or take a huge step they will be hard to actually climb....make your choice.....Im for the former.

regards

A  VERY good summary Ralph - you may go home early

 Bernard- there should be a function able to deduct points.

Walter : There is no polite way to phrase this ...... but this is not the first time that you have appealed to Bernard for a " deduct " button  to counterbalance the " thumbsy-up " vote ......

...... so I'll just say  : " Turkeys --- Vote --- Early --- Christmas "

.. and leave YOU to join the dots ..

Gummy .

[ Disclaimer : GBH is fully aware that more than a few around here would cheerfully turf said Gummster off the top of the tallest edifice in town to see  if a dead Gummy Bear bounces any higher than his counterpart , the dead Kunst . ]

 Bernard help !! - how can that comment above mine make three points - with my one 4 now ???? - there should be a function able to deduct points. Some sticky people here.

Ah there you are Gonzo. I thought the person with his hand up you had left the theatre.

I think that ranks as a Claytons endorsement. The one you have when you're not having one.

 

gloomdownwiwi - dont forget to give us your thoughts on Bill Buckleys award posted earlier in the day

I'd say that where you and I differ is that I don't regard optimism as guaranteeing reality.

So my thought is that we're poles apart. And if you are who I think you are, we've met once and I felt an instant repulsion.

Actually, someone like you won't want to understand that folk like me are non-stop inventive 'tecchies'. I build bikes, cars, boats,tools, buildings, infrastructure systems (just spent today bettering my fridge - already one of the most efficient around) and design most of them myself. Tech-smart is one of the things we have to be, but simple smart, rather than unfixable smart.

I never got around to sourcing that magazine with your fridge PDK, but I am intriqued just by you talking about it. Tell me do you use ground source? Either directly or for the air conditioning cycle. Just thinking about this has made me ponder where in the cycle the ground source energy imput is. Would it go between the evapourator and compressor to replace some of the work done by the compressor? 

and Bill Buckley ?      good for NZ or no?

Not good for Labour gonzo...last thing they want to see...private successful wealth generation without Labour there to bugger it up with union trouble and red tape. Too much of Bill Buckley and who would need the Labour slices of electoral pork.!

 "Economic growth is likely to pick up next year, but the picture could be "significantly worse" for New Zealand if there is a sovereign debt default or the eurozone splits, forecaster Berl says" herald

Well bugger me....'Berl' are really onto it....fabulously useful economic forcaste...!

I think BERL are the same economists that provide 'independent' analysis to local and regional councils indicating that it is O.K. to increase their salaries at a rate of 4% p.a. compounding (48% over 10 years) as ratepayers can afford to pay the increased rates. 

You make up your own mind about this:

 "AMI CEO John Balmforth is one of the highest paid executives in the country, earning a salary that would rank him in the top 20 among listed company CEOs.

The troubled insurer, which was bailed out by the government after Christchurch's February earthquake, paid Balmforth a salary of $869,369 in 2011 plus a bonus for the 2010 year of $122,700, according to its 2011 financial statements.

The statements released last week are much more extensive than those released in previous years. They also show the company is in breach of both the Reserve Bank's draft solvency standards for insurance companies and the solvency standard in the Crown Support Deed which provides $500m of back-up capital.

Failing to meet that standard is a "trigger event" that would allow the Crown to take ownership of the company." stuff.co

IMO this will cost Key and co a swag of support.  

I am not sure about John Balmforth being one of the highest paid executives. Fonterra alone has 19 people with remuneration over $1,000,000 - half admittedly offshore. Only 5 of the 19 get $2,000,000 or more.

 "The average Marlborough house is valued at $310,000 in 2011, down from $352,000 three years ago; the average vineyard capital value fell over the same period to an average of $2.2 million, from $3.6m in 2008."

http://www.stuff.co.nz/marlborough-express/news/5673668/Property-values-cut

And the 2011 dollar is worth some 12% less than the 08 dollar....how you like them apples?

The total capital value of Marlborough property has dropped from $16.5 billion in July 2008, to $13.7b, Mr Fletcher said.

So, a $2.8 billion drop in capital value just for Marlborough. How much across all NZ?

Does that impact on John Key's assertion that we (NZ) have a strong balance sheet?

 "Blatant Lies by French Finance Minister "

 http://globaleconomicanalysis.blogspot.com/

Martin Hawes writes in the SST, "...this is a zero sum game. For every mortgage of $100,000 there is a term deposit ( or other lender) of $100,000..."  Does one of our better known financial commentators really believe that this is how fractional lending works? $100,000 worth of deposits generates far more than $100,000 of mortgages...( Actually the mortgages, issued first, create the deposits!)

As I have noted a few times recently, the media are heavily into defence of the status quo. A partial counter is provided by a few of the better bloggers. John Ward:

I’ve written about this endlessly, but the truth remains that there is no need to put on a  duffle coat and carry placards asking people to smash this or fight that. When the eventual Big Change comes to England (or Britain, if Salmond doesn’t get his way), the best and quickest way will be via the internet media available. As Channel Four remarked pointedly three years ago, the internet is for opposition. For once they’re right, because it is still by far the least controlled.

But the control has started, and is well under way. Predictably, the main Establishment hysteria about the recent riots concerned looters using Facebook and Twitter to organise either SWP attacks on the police, or Underclass locust-charges into the sports shoe and technology outlets. And as we saw, the ISPs were falling over their knickers to give the control freaks everything – indeed, anything – they wanted. Given that this vastly exaggerated phenomenon first took root in the Dacre Mail, I leave those with some discernment left to judge the veracity or otherwise of the bollocks masquerading as news that emerged from the British tabloids during that week.

More generally, total eavesdropping of the net is now in place – certainly in the UK, because under pressure both GCHQ and the Home Office have admitted as such. As much-inconvenienced sloggers will know only too well, step too far out of line with anyone from Ed Balls to Google, and you’ll be gagged and in the sin-bin before you can say personal liberty. These people are Fat Controllers: if they weren’t, they wouldn’t be doing the jobs they do. Ugly little trolls sitting in voluntary moderation centres, measuring the gap between words like ‘Obama’ and ‘empty-headed jerk’ in every blog and thread. Winston Smith, eat your heart out.

http://hat4uk.wordpress.com/2011/09/24/at-the-end-of-the-day-76/