Island Life: Q+A. Fill in the blanks.
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Me, I'm trying to come to terms to the fact that it's being rescued by FIAT. That's like being told how to keep on the straight and narrow by Satan.
Parallels with the post-British Leyland motor industry in the UK.
And Pontiac has just been killed off by GM. GM basically has until the start of June to get its house in order, or face Chapter 11.
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Like I said, I have been unable to find empirical real-world evidence of cutting upper marginal income tax rates magically delivering productivity (which is what we need for growth in this country). The "rational" argument is along the lines of "people will work more cause they get to keep more of it".
Working longer is not the path to increased productivity, though. Any politician who tries to argue otherwise should be ignored out-of-hand as having not the slightest fucking idea what they're discussing.
Increased productivity comes from producing more with the same inputs of labour and time. If I can make six widgets an hour, working at maximum possible speed, my productivity is not improved if I work for 10 hours a day instead of eight. Indeed, my average hourly output would probably decrease over time due to the decreased recovery time per day. However, if my employer invests in a machine to do some of the work and I can now make eight widgets an hour, my productivity has increased. But that requires an investment in capital means of production, which in this country is almost a dirty phrase - it's up there with "tax increases" and "sickness beneficiaries". Until that changes, we won't see any huge improvements to our OECD rankings. Employers will continue to pay the lowest possible wages to as many people as necessary to get a job done, rather than spend money on technology that would let them employ half that number of people for the same output. It's not some altruistic notion about keeping their employees in jobs, either, it's simple short=sightedness that makes them see the employees as an immediately-deductible operating expense vs the technology's long-term, depreciable expense that costs lots of money now but can only be deducted against income tax over some period of years (possibly 15-20, maybe more).
If Rodney really wanted to improve our productivity he'd be calling for a minimum wage of $20. That would force employers to evaluate technological improvements to their production methods, rather than taking the "throw more bodies at it" approach. Oh, that's right, he's only about improving returns for business by scrapping employee rights. Productivity is just code for "Mandatory whipping until morale improves."
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The US makes plenty of useful stuff, so why waste resources making shite cars nobody wants?
That's the problem. People do want them. Dopey US consumers - with insecurity complexes and an inability to go more than 30 seconds without eating/drinking - that have been pandered to by genius marketing and design groups desire those enormous, wallowing, dangerous beasts. It's illogical, and irrational, and actually pretty damned terrifying, but want them they do. And best of luck convincing them that, actually, they should be buying things like Previas if they really need the space.
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Working longer is not the path to increased productivity, though. Any politician who tries to argue otherwise should be ignored out-of-hand as having not the slightest fucking idea what they're discussing.
Thanks Matthew, I was beginning to wonder why I wasn't yet impressed with any thing, any one, any place, any time, any word/s that may have sounded intelligent. Without criticism to anything in particular but I haven't learnt any info that I can decipher as intelligence.Hel I actually enjoyed Douglas today(shame, shame) because he began with "it's my job to give everyone a hard time" but I also got a letter on behalf of Rodney Hide, and that just confirmed we have no say in Megabeggardropapopamiss. Now I will lower all expectation of a for the people by the people city. I continue .
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Matt P:
Working longer is not the path to increased productivity, though. Any politician who tries to argue otherwise should be ignored out-of-hand as having not the slightest fucking idea what they're discussing.
Once again, encouraging people to keep up with the Joneses and buying the latest Range Rover or lifestyle block seems to be the prevailing economic doctrine. It'd be unfortunate if the mortgage and credit card sectors go Icelandic, but I suspect it's the only thing that will jolt overspenders to their senses. Westpac's Brendan O'Donovan I believe described it as the Freddie Mercury economy: "I want it all, and I want it now".
Sofie:
I also got a letter on behalf of Rodney Hide, and that just confirmed we have no say in Megabeggardropapopamiss. Now I will lower all expectation of a for the people by the people city. I continue.
Maybe there doesn't even need to be a poll tax to screw things up after all.
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Maybe there doesn't even need to be a poll tax to screw things up after all.
But you knew that. :)
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But that requires an investment in capital means of production, which in this country is almost a dirty phrase - it's up there with "tax increases" and "sickness beneficiaries"
That's nonsense. It was true 15-20 years ago but has not been the case for some time.
There has in fact been a surge in capital investment since about 2002. (Its dropped off recently, for obvious reasons) We've had a tight labour market so businesses have had to look at more machanised ways of doing things. Also most of our capital goods are imported: when the dollar was low a lot of businesses took advantage of that to import plant and machinery.
The biggest drag we have on productivity is the numbers in our workforce who are still functionally illiterate and innumerate.
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Let's not forget the possibilities open to us little guys to raise productivity by developing software and technology in the comfort and low overhead of our own homes.
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Rob, about a couple of things you said:
That's nonsense. It was true 15-20 years ago but has not been the case for some time.
There has in fact been a surge in capital investment since about 2002. (Its dropped off recently, for obvious reasons) We've had a tight labour market so businesses have had to look at more machanised ways of doing things. Also most of our capital goods are imported: when the dollar was low a lot of businesses took advantage of that to import plant and machinery.
I'm not sure we can dismiss what Matthew says as "nonsense." New Zealand businesses have been, and still are, poor at taking up new technologies. I'd be interested in understanding what "surge" you are referring to. At best there may have been a modest uptake of new machinery and technologies - that's certainly my impression from working as a lawyer in the technology/IP sector, but does anyone have any figures on this?
The biggest drag we have on productivity is the numbers in our workforce who are still functionally illiterate and innumerate.
Is this verifiable, or just one of those canards sold to us by the people who would like to justify why we must remain a low wage economy? New Zealand's performance in a number of education reports recently has been pretty good, actually. In a recent OECD report we came second to Finland for performance in science for 15 year olds.
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Dopey US consumers - with insecurity complexes and an inability to go more than 30 seconds without eating/drinking - that have been pandered to by genius marketing and design groups desire those enormous, wallowing, dangerous beasts.
I don't think New Zealanders would win any 'smart consumer' prizes on this score either, frankly.
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I think the key is to always use the highest gear you can to maintain a decent rev count (~90-100rpm). On hills, this usually means dropping into a lower gear rather than manfully struggling on - using too high a gear is allegedly bad for your knees, and it's usually easier for most people to push a lower gear at higher revs than to push a higher gear at lower revs.
Or to put it another way: Jan favoured a higher gear/lower revs, Lance was notorious for spinning a lower gear. One of them kept winning.
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I don't think New Zealanders would win any 'smart consumer' prizes on this score either, frankly.
No, probably not. But if the American consumer had never desired such a ridiculous vehicle they'd never have been imported here. We don't get focus-grouped with a view to creating entirely new classes of vehicle.
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But if the American consumer had never desired such a ridiculous vehicle they'd never have been imported here.
That's because they're a huge market, not because they're inherently any dumber or more insecure than we are.
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Rob, why did F&P Appliances off-shore to Mexico? That's right, because the labour was cheaper. I'd be amazed to find out that there was no automation solution that could've allowed them to keep production here, even if it meant laying off some employees.
Similarly, we have very little high-tech production here. We missed out on Motorola because our workforce is under-educated in engineering and advanced sciences. That we still have Tait is an absolute miracle.
Have we got any of the fancy in-field lumber milling systems here? That's a perfect example of where technology could increase productivity, but as far as I know we still use the classic "man with a saw" methods (I know they use machines, but it's still reliant on trucking out whole logs, and cutting the trees down one-by-one).
As for your claim that it's workforce illiteracy/innumeracy that's the biggest problem, we've got a far higher rate of fully-educated adults than the US. America manages, and well. I don't doubt that it's a problem, but you're going to have to try far harder than that to convince me that that's a predominate reason for our lousy productivity.
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I'd be amazed to find out that there was no automation solution that could've allowed them to keep production here, even if it meant laying off some employees.
I don't know anything about making dishwashers, but I think if it could have been done cheaper by a machine, F&P would have done that, here or in Mexico. The most likely reason why it's still being put together by people is that it's the cheapest/easiest/most reliable way to do it.
When it comes to saving money, capitalism typically finds a way.
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That's because they're a huge market, not because they're inherently any dumber or more insecure than we are.
Maybe, maybe not. I do note that our top-selling vehicles are all cars, not SUVs/trucks. It was huge news in the US that when Civics, Camrys and Corollas outsold the F-series pickup last May, being the first time since October 1991 that the F-series had been outsold by anything. That does carry its own implications about the relative merits that respective markets see in their modes of transport.
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When it comes to saving money, capitalism typically finds a way.
Yes, it surely does. But there's a serious aversion within NZ business to the concept of "You've got to spend money to make money." This even extends to getting professional advice, where businesses will avoid it as long as possible and then only grudgingly hire the cheapest consultant they can find. In the long run, that can cost far more than it saves.
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Maybe, maybe not.
Basically, I don't see the point of calling 300 million people dumb and insecure as the key thrust of your argument. It's unnecessarily reductive.
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When it comes to saving money, capitalism typically finds a way.
It does. And that way is often reducing what you pay people to work. Machines require upfront investment, and continued maintenance, and cost more and more as they get older, so lobbying for decreased labour regulation and shopping around for low-wage economies can look like a better deal.
I agree with Matthew. I've seen it over and over again. It is the dark obverse of our can-do, jack-of-all-trades, no 8 wire culture - we disrespect specialists, skimp on maintenance, and jury rig cheap solutions that break a lot.
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Danielle, what about that bit of my post where I actually gave you concrete examples to support my ambivalence? I also said they'd been manipulated masterfully, which points to credulity as much as "dumb and insecure". I should point out that those are your words, not mine. Either way, most of the top-selling vehicles in the US are ones that subscribe to the "it's big and it's high" philosophy. Here, such vehicles don't get a look-in. It's not much to do with fuel efficiency, either, since Commodores and Falcons were the rest of the top 3 for last year, behind the venerable Corolla. The rest of the top 5 were Japanese cars.
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Dopey US consumers - with insecurity complexes and an inability to go more than 30 seconds without eating/drinking -
I stand corrected: you didn't call them dumb and insecure. You called them *dopey* and insecure. I'm also not quite sure why the eating and drinking thing is at all relevant to your point, but whatevs. You tend to be a bit 'othering' about Americans, sometimes, and since I'm half-American and married to an American, I find it a little off-putting. No biggie, really.
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I'm also not quite sure why the eating and drinking thing is at all relevant to your point
Read the article I linked with "enormous, wallowing, dangerous beasts" and you'll get it. I consider it a completely valid point, but YMMV. I have no idea if it applies here, assisted by our total lack of a domestic automotive production sector, but it doesn't appear to apply to any other car producing nation since I'm unaware of any other country where it's de riguer for there to be at least a 1:1 ratio of cup holders to seats in even the largest vehicles.
As for "othering" Americans, assuming I'm understanding the term correctly, I'm hardly alone. Possibly more vocal, but definitely not alone. I can usually point to at least some evidence to back up my position, as I've done here. They buy vehicles that are demonstrably unsafe and inefficient, and claim that it's because they're "safer". We buy cars, admittedly of very variable levels of safety but cars nonetheless. I've proved that this is true, unless you're questioning the validity of my sources?
I'm quite happy to drop this. We're not going to agree. I'm perfectly willing to concede that Kiwi consumers may well be as credulous, dopey and insecure as American ones, but the evidence points to Kiwis being somewhat more cerebral, as opposed to instinctual, when it comes to buying automobiles.
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People do want them. Dopey US consumers
That's one country of 300mln, and a lot of them want a normal, efficient car these days. The export market to the other 600mln people in the developed world is pretty limited, and to India and China it's non-existent.
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Stephen Judd wrote:
I agree with Matthew. I've seen it over and over again. It is the dark obverse of our can-do, jack-of-all-trades, no 8 wire culture - we disrespect specialists, skimp on maintenance, and jury rig cheap solutions that break a lot.
As a former engineer, I can only agree with you on this one...
Rob Hosking wrote:
The biggest drag we have on productivity is the numbers in our workforce who are still functionally illiterate and innumerate.
I've been fascinated (if that's the word) by NZ's low productivity for nigh on two decades. I've read and thought a lot about it -- and I simply can't see how any of the numbers would back your claim. As far as I've ever seen, NZ does very well internationally in these areas. Do you have a study or some numbers that you can quote to explain your argument?
Of course, one of the problems in understanding NZ's productivity is the lack of quantitative data in certain areas.
For what it's worth, here's my take on the two biggest causes of NZ's low productivity (this is basically the macro-driver for the symptoms that Stephen Judd has pointed out):
1. Extremely poor governance
2. Very poor management
And I suspect our biggest economic advantage is:
1. Extremely low levels of corruption.
2. A highly literate and numerate workforce.
If you get a chance, it's very interesting to contrast German governance/management practices with NZ. Note that Germany is the world's largest exporter and has extremely high wages (starting salary for an engineering graduate over NZ$200,000) as well as a very generous holiday scheme (six weeks per year minimum).
According to the NZ Business Roundtable, of course, Germany has it all wrong...
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Interestingly, a year ago I walked past three car yards on the way to walk and now they've all shut down. I get the impression that the imported used car trade is completely f..d; the price they have to pay has shot up, while the price anyone is prepared to spend has fallen substantially.
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