Here's my Top 10 links from around the Internet at 9 am in association with NZ Mint.
I welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.
I'll pop the extras into the comment stream. See all previous Top 10s here.
I'm travelling again today so Today's Top 10 will be a little slimmed down. #8 is my must read today.
1. Time for golf anyone - The Press' Sam Sachdeva reports Christchurch CEO Tony Maryatt left a key council meeting yesterday to go and play golf.
The anger in Christchurch is boiling on this.
Something slightly feral is brewing in New Zealand on the issue of executive pay and fairness.
It might well creep up on a few people and surprise them.
It turns out Maryatt has a history of playing golf at crucial moments for Christchurch...
The chief executive's golfing habit came under fire last month, after it was revealed that he had played golf on two of the weekends he said he worked after the February 2011 earthquake.
An anonymous caller directed The Press to Marryatt's golfing records on the golf.co.nz website, which showed he had played two rounds of weekend golf at Clearwater in the nine weeks after the February 2011 quake - on April 2 and in a stableford competition on April 9.
His round on April 2 was played on the same day it was reported that council staff were fighting to prevent the city's sewerage system collapsing, blanketing the city in an "almighty stink".
2. Germany vs Greece - Ambrose Evans Pritchard at the Telegraph looks at German demands for Greece to delay its elections and appoint a government of technocrats.
Is this really the position of the German government? Greek democracy be damned? I presume he (Germany's finance minister) has seen pictures of the blackened buildings below the Acropolis – and yes, the evidence is everywhere: a neo-classical house near my hotel at Monastiraki metro station was completely gutted, as was a building across the road. (There were four homeless sleeping in the cold alley next door, being comforted by a young volunteer.)
I presume too that Mr Schäuble has been well-briefed on the explosive political mood in Greece, so one can only view such a demarche as deliberate provocation – like the Austrian ultimatum to Serbia in 1914 (a miscalculation, as it later turned out, since "contagion" from Serbia could not be contained). "Who is Mr Schäuble to insult Greece? Who are the Dutch? Who are the Finns?" retorted President Karolous Papoulias, himself a teenage resister against the Wehrmacht in Epirus almost seventy years ago
3. Just default - British European MP Daniel Hannan says Greece should just default.
It’s a problem common to every EU country. Because Brussels has been kind to the politicians, they genuinely struggle to see that it isn’t in the interests of their constituents.
We heard precisely the same arguments from our own political elites during the final months of ERM membership. Leaving the system, we were told, would spell ruin. In the event, our recovery began the day we left: 16 September 1992.
It’s true that Greece is in a worse position now than Britain was twenty years ago. All its futures are clouded. But reissuing the drachma at least offers the prospect of eventual growth. Remaining in the euro guarantees a generation of poverty and emigration.
4. Savers will pay - Bank of England Governor Mervyn King, who is printing money at a great rate of knots, agrees savers are seeing their savings eroded by inflatin, but it's the only way...
Sir Mervyn insisted he understood the problems facing savers, but made clear he believes he can do nothing to help.
“I have deep sympathy with those who are totally unconnected with the origins of the financial crisis who suddenly find that the returns on their savings have reached negligible levels,” he told a press conference. "These are consequences of the painful adjustment prompted by the financial crisis and the need to rebalance our economy."
The Bank could respond by increasing Bank rate from its current level of 0.5 per cent to 4 or 5 per cent, he said. But that would push up the exchange rate, depress investment and consumer spending “and we would go back into a recession.”
“All groups in society are suffering from the financial crisis,” Sir Mervyn said, insisting that there can be no special help for particular groups. “Difficult though it is, we have to make a difficult judgement about the right course of action for the economy as a whole.”
5. Not so pure - Massey water scientist Mike Joy has good old rant here about New Zealand's environmental record.
A recent peer-reviewed international study[1] compared 189 countries using seven well accepted measures of a countries environmental performance. The report compared for each country their proportional loss of native vegetation, native habitat, the proportion of endangered species, as well as the amount of fertiliser used, marine captures, water quality and CO2 emissions. This comparison showed that per capita we are 18th worst with regard to environmental performance in the world (i.e. 171 countries ranked higher than NZ).
The closer you look at the figures the bad news just gets worse. For a start we have the highest proportion of threatened species in the world, and if you take out our CO2 emissions and judge us on the other six measures then we are the 10th worst country in the world. This CO2 result may seem surprising but this is only because the comparison didn’t include methane emissions from agriculture, only our CO2 emissions which are relatively low.
Perhaps because of our delusion about how clean and green we are we smugly look down on countries like China as environmental destroyers. But, in reality we only rank one notch higher than China. Of course their overall impact ranking was much worse because their population is much higher; they ranked third worst behind Brazil and the USA. When it comes to this overall impact we ranked 47th worst in the world (i.e. 142 countries ranked as better than NZ).
6. The importance of competitiveness - Bryan Gould also has a good old rant at NZHerald about our economy. Well worth a read.
More and more of our national wealth goes overseas. We have less and less control over our own economy, as the proportion we actually own diminishes. High interest rates not only inhibit domestic investment but produce an overvalued dollar that prices our goods out of international markets, including our own, and reduces our return on those goods that we do sell.
We have been travelling down this no-exit road now for nearly 30 years. Yet our policymakers still set their faces against any change of policy. We continue to assert that the only focus of macro-economic policy must be to control inflation, even though the measures we use to do so are poorly focused and slow-acting, and actually make our real problem much worse.
What is our real problem? It is certainly not inflation. It is that we are basically uncompetitive. We have steadfastly ignored the fact that the world has changed and that rapidly developing economies like China, India, Korea, Taiwan and Singapore are now super-competitive economic powers, determined to build on that huge advantage by holding down their exchange rates and becoming ever more competitive.
They have rapidly built the strength of their productive sectors and have earned huge trade surpluses which have allowed them to buy up the assets (including our own) that they will need for further development. Many of them already enjoy living standards better than ours and pay wages and salaries that are higher.
We, on the other hand, are arrogant (and stupid) enough to believe that competitiveness does not matter, and that we can - in defiance of economic rationality - continue to push up our exchange rate with impunity. By focusing on inflation, to the exclusion of other objectives, and using interest rates and an overvalued dollar in the attempt to control it, we make it inevitable that our lack of competitiveness gets worse.
7. Who is this guy? - Emma Beer asks this question at The Wellingtonian about Wellington's CEO Garry Poole, who earns NZ$419,230 a year but won't speak to the public. See #1 re the feral mood sweeping the nation on pay. Good.
Garry Poole earns $30,000 a year more than the Prime Minister, has been running Wellington City Council for 13 years ... and could walk along Lambton Quay unrecognised. Who is he and is he worth the money?
Tony Marryatt, the Christchurch council chief executive, has been hammered for his $538,000 pay (a $68,000 pay rise that he finally rejected after some arm-twisting) and his Kapiti equivalent, Pat Dougherty, is under fire for his $285,000 pay packet (an 18 per cent pay rise). What about Garry Poole? What does his job entail and is it worth an $8070 a week pay packet?
Despite several requests, Mr Poole declined to make any comment. He is either pathologically media-shy or extremely secure in his job. When Mr Poole became chief executive in 1998, his salary was $217,500. It has nearly doubled in 14 years. Prices have risen 39 per cent in that time.
8. The doom loop - The Bank of England's Andrew Haldane has a good piece here at the London Review of Books about equity and the banking system.
The continuing backlash against banking, as evidenced in popular protests on Wall Street and in the City of London, is a response not just to the fact that the world is poorer, as pre-crisis riches have turned to rags, but to the way these riches were privatised, while the rags are being socialised. This disparity is nothing new. Neither, in the main, is it anyone’s fault. For the most part the financial crisis was not the result of individual wickedness or folly. It is not a story of pantomime villains and village idiots. Instead the crisis reflected a failure of the entire system of financial sector governance.
9. Hemlines and markets are connected - CNBC reports.
10. Totally Clarke and Dawe on Australian political instability. Eggs are being broken from different ends of the egg.
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.