NZ Greens Party and Labour Party discover an 'over the horizon' election losing strategy

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Wow!!!! This is huge news. Labour and Greens together have raised minority party extortion to a new level. As far as I'm concerned, its great news because it highlights the nature of our useless 'representative' democracy. At stake is the spectre of a non-governing party threatening to subvert the existing government.
The Labour Party and Greens are saying in the midst of a power privatisation that they are going to change the rules of the game. An 'asset' is a capitalised stream of earnings. If you change the government, change the rules, you are going to change the expected earnings, or investors sense of vulnerability. The market is already uncertain about 'drought' (least of their worries), the closure of the Rio Tinto smelter, and now Labour and Greens are saying they will thwart the sale - in effect!
This effective curtails any hope of investment in the country (in anything substantive) as well as any hope of getting a sale of assets. Its the cheapest form of populism. Worse that 'minimum wages' and capital gains taxes by a country mile. Mind you, the policy was unpopular for National, and they were too arrogant to even deal with the broad-based apprehensions. This is of course just another reason for spurning 'representative' democracy. see and like us at www.meritocracy.org.nz. Join our mailing list.

This is actually worse that Julia Gillard's Mineral Resource Rent Tax (MRRT) because:
1. NZ needs the jobs and industry
2. Australia is a strategic and prized supplier of minerals
3. People kind of expect minerals to incur some rent
4. The mining industry was always very powerful, and thus a backflip was to be expected
5. The Australian Labor Party is just about to be dropped
The twisted aspect of this is that Labour and Greens just placed themselves in the wilderness....and ACT are looking more credible than ever. We have the socialists to thank for it....they really showed their true colours. Giving people sugar does not always work; most particularly when the market/media show you the implication of your decision-making. Shearer just retired permanently.
I guess we have to respect the 'honesty' (if not blatant stupidity) of the NZ Labour Party and the Greens Party. I guess they have locked in the support of the party faithful. But they might have just jettisoned any member or supporter with any sympathy or brain stem. To those people, I say welcome to ACT Party. John Banks, its leader is probably the only person with half a brain stem, and its a semi-impervious connection to God. So we live in hope. But you know; that's the price you pay for moral relativism. Get rid of representative democracy! Its not really 'democracy' in any meaningful sense. It does not give you 'real representative'. It takes from you power of attorney, vested in a person you will probably never meet or really know, who runs agendas you will scarcely understand because he is thinking full-time about thwarting your better judgement, and you are scarcely 'participating' to bearer scratch together a few brain cells. We need a meritocracy with a rational framework for political discourse. This is the only way that anyone can participate in a legislature. Visit us at www.meritocracy.org.nz. You want respect for your legitimate interests and rights - become a libertarian - we are not all Christians.


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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Auckland - living on the edge of a volcano - they didn't see it coming

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On the 17th March 2013 I wrote about the risks posed by a volcanic eruption in the Auckland Volcanic Field. I posed a number of questions as much as anything, since as a geologist, I go on evidence, and frankly, I was at a loss to find any. I don’t live in Auckland, so I don’t have any particular interest beyond an odd-hours research, but since writing this story, I’ve seen an escalation in interest in the issue. Might it be that there is more evidence than originally reported? Well there is a follow-up story in the NZ Herald today which raises several more issues which I want to address:
1. Focus of activity – The story probably creates unnecessary fear because it suggests that each of the old active volcanic craters in the Auckland Volcanic Field is active. This is unlikely. More probably an eruption is going to be in the Rangitoto Island area, if not the existing cone.
2. Eruption history – It suggests that Rangitoto has a sporadic eruption history of up to 1000 years. This is less important than the nature of the eruption. Really the threat posed is from an early blast rather than a later flows of liquid, highly fluid magma. Since the eruption is probably going to be offshore, I suggest the greater threat is a mini-tsunami in the bay, as well as a volcanoclastic surge blasting your windows to smithereens. You might want to rethink that bay-side waterfront apartment acquisition; if only for the high rents and the surge risk.
3. Eruption activity – The evidence suggests that volcanic activity has increased in intensity, i.e. the latest eruption some 500 years ago from Rangitoto Island was the most activity in terms of lava flow and ash.  Where does that leave us? Maybe more explosive coming? Maybe simmer or subside.

It goes without saying that Auckland is unique in the world. It is not unknown for cities to be built adjoining volcanoes. The problem for Auckland is that it is probably the only place that I know which is actually built on top of a volcanic field. Having said that; the next eruption is probably going to be offshore. Let’s not forget how ‘recent’ human arrival was; and I’m including the Maoris.

Does it make sense to rethink the focal of NZ development? Does it make sense to keep developing Auckland? Well, given the characteristic of these types of volcanoes, I think it does make sense to keep developing Auckland. Does it make sense to retain it as the centre or focal point for NZ development? Perhaps not; but then expensive housing prices are probably destined to drive people out. Who wants a bird’s eye view of a volcaniclastic surge? Not me.

The reality is that there is a great deal to question about the nature of this volcanic phenomenon. Does one lead one’s future in the hands of academic volcanologists with a limited understanding of geological events? Such volcanologists are really learning as they go, largely on the basis of empirical evidence. They have not even observed an eruption from any field with this style of eruption; let alone from this volcanic field. Reason for caution? Not really perhaps until the evidence trail grows.

Associate Professor Phil Shane said: “Future planning would have to consider living with active volcanism for a long period of time….It is not as bizarre as it sounds, if you think about Iceland and Hawaii - societies have gotten used to living with volcanic activity for generations”.

I have a problem with this statement insofar as Hawaii and Iceland are a completely different type of eruption centre; both in terms of style and character. I doubt there is even the evidence to suggest that Auckland is even a ‘hot spot’ in the conventional sense. Certainly not like Hawaii with its flood basalts, or Iceland for that matter. I suspect its origins are more tectonic than is appreciated, with activity arising from a fractures opening up offshore of Auckland. The evidence is simply not there. There is a major kink in the tectonic plate at Wellington, and you can bet no work has been done interpreting earthquake activity offshore from Auckland.
The problem too often with ‘empirically-driven’ scientists is that they only start questioning convention when some event jumps up in front of them to tell them how little they know about the world (having an incomplete geological account due to erosion and limited observation) and not a great deal of knowledge about the cause of the Auckland Volcanic Field. In this last respect, these empiricists are largely ‘talking blind’. There are not too many geologists around who say ‘I don’t know’. Neither are there many people who define themselves as ‘critical geologists’. Everyone wants to fall back on convention to convey how much they know. The flipside is that unpopular academics seems to be a contradiction in terms, hence you cannot always expect volcanologists (indeed any scientist with unconventional ideas to get taken seriously). Can you imagine how safe one must get with life-time tenure? Can you imagine how annoying a person could become if you worked opposite a professor you did not like for a lifetime? My sense is that they grow to get along; much like the Japanese, defined by their own sense of safety.


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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Focus NZ Party: A struggle for identity

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The prospect of yet another libertarian party in NZ. I don't know whether to laugh or cry? I do know that I'm leaving the country, so what's the difference. Well, its nice to think that there is some hope of a libertarian sovereign state somewhere; but given the values conveyed by these 'hicks', I do believe I will be crying. So what's up with them. Well, here is the problem as I see it....the list is a little long.


1. The prospect of a a new (Focus NZ) party is probably only going to increase the chance of a Labor-Green victory because it will mean no list seats for a libertarian party. This will of course spell the death of all libertarian parties. 'Divide and rule'....that depends on how you divide. Three libertarian parties is ridiculously too many, particularly since you make no point of differentiation. If they merge with Daniel Craig's Conservative Party (yeh that was a joke) or ACT, that would be better.
2. The other big problem is that they have pursued the wrong approach to credibility. ACT's strategy of digging up former National Party leaders is ridiculous for a party that should be trying to differentiate themselves. Find credibility within the business community and appeal to high profile people across the country to back you, not just business people....otherwise you look like a pack of hicks or vested interests. But don't just create the perception of being broad-based, actually change your mind-set from concrete 'vested interest' 'exporter of the year' myopia, to all issues. Not just fiscal, monetary and industry policy, but welfare, treaty, energy policies and besides.
2. Another big problem for libertarian parties is that they have no clear identity. This is perhaps the hardest pill to swallow, but 'libertarianism' as a concept is rife with problems. You have to pick a winner. If you accept to 'pick the package' then you diminish your credibility. You are positing yourself as the 'honest party', but you can't be if you are contemporary libertarian, which means, only caring about advancing 'small government' agendas, but being indifferent to the divided philosophical values that divide people. This 'packaged' attempt to be all things to all people works for the 2 major parties; but it won't work for ACT or Focus NZ. The reason is clear I hope - the 2 major parties are 'extortion' based parties - both peddling fear. Labour is peddling concessions based on extorting wealth from the rich; and Conservative-Centre National Party, is peddling a defensive 'we'll protect you strategy', or 'we'll allow you to grow' on a good day. They are entrenched in this extortion-based two-party model. Trying to be the balance of power is not going to work given that the Maori Party is already doing that. This means the libertarians need to differentiate themselves, and that means 'growing market share', and that means being something the other parties are not. But since its different, you need to convey integrity. It does not matter if you have to divide your market share; at least you will convey a coherent system of values the people can trust.
3. Identity - The problem with 3 parties is that there is no point of difference. Libertarianism is a political philosophy that advances 'small government'. Your problem is that people support small government for basically 3 different reasons (i) Indulgent, reactionary, subjective anarchistic reasons, (ii) intellectual Randian objective 'natural law' type reasons, (iii) intellectual utilitarian reasons, (iv) divine/Conservative party reasons.
The implication is that its very hard to integrate that set and preserve integrity because at the end of the day, the Labor Party, and National Party and even Greens, have a fair claim on these people.
4. Broad based policy is needed. Just looking at your website, and that's where journalists will look, one observes the following errors, aside from the pitiful website....
(a) Right wing is not a good term to adopt...its meaningless...better individualism, prosperity,
(b) Focus on 'producers and exporters' - its a mistake. You may as well call yourself an irrelevant farmers party. Farmers are the 'backbone of the country''. Perhaps, but the problem is they are 3% and you have not found a way to teach sheep to vote. Labour has. 

(c) Talk of 'foreign exchange rate' controls is the wrong way to go about policy for a party that purports to be 'free market'. You need to ask yourself why the currency is high and deal with the problem from that respect. All commodity currencies are high...to give you a hint.
5. Criticising the outsourcing of jobs. There is already a 'nationalist party', why are you going that path. That's not 'broad-based', that's just idiotic. Winston Peters already panders to the ignorant. Jobs are going offshore because its cheap to make things in China. If you increase the costs of living in NZ, then you have inflation. You will diminish jobs in NZ...the exact opposite of your intention. The cost of living will rise. It is true that there is a false economy in outsourcing jobs which will come back in 20 years, but the solution is not simply protectionism. The solution is not to identify the problem and not have a solution either.

The policy position of Focus NZ is actually not bad, at least from their opening page; the issue is more on the strategic positioning of the party. Of course there will be a need to see the detail. The problem with such small parties is that they tend to lack the lack of analytical skills to make a credible effort, and then they tend to fail on public presentation, which the major parties handle convincingly. Most voters are not analytical; but journalists will be voracious, so party speakers need to be. Going after list seats makes sense as a policy strategy until they identify credible public speakers.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

John Key on asset sales: Three Strikes And Your Out!!

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In both October 2011 and January 2012 ( a year ago) I alluded to the threat of a closure of the Rio Tinto alumina smelter, and the prospect of the smelter closure impacting on the electricity market, and the forthcoming power industry privatisation. It loomed at as a compelling reason for the NZ government not selling the power assets - probably the only reason. But given the market outlook its a big one. On the 23rd March 2013, I gave John Key a third warning. Now, I know this guy reads my blog posts because he seems to respond to everything I say. On this occasion however he showed utter contempt for my advice. So what's the problem? Aside from the adage "Three strikes and your out", the problem is that:

The spectre of the Rio Tinto aluminium smelter closing means that 11% of the nation's electricity consumption is handing over the market. That is a big problem for several reasons:
1. The nation's population growth is flat
2. We are in the midst of a recession

The fundamentals for asset sale otherwise look pretty good; but this disposition will remain the case for the foreseeable future. In fact, there is good reason for expecting a future government to increase immigration, and to perhaps expect more Kiwis to return home. There is also the prospect in 5-10 years to expect some offshore resource development, with all the onshore developments that are associated with energy processing. But that's a long way off. In the near-term, we are looking at 10 years of subdued energy demand. More worrisome for Key is the push for reform of the Resource Management Act, which would reduce the cost of installing new generating capacity. This is less of a concern for large capacity additions; but there might be perceived to be a 'pent-up demand' for mini-generators like private wind farms, solar concentrators, mini- and run-of-river hydro schemes. The wind farms are particularly appealing in NZ, given the falling costs of installation, and growing acceptance.

The implication is that Rio Tinto is effectively using the power privatisation issue to "extort" a concession. The deal looks like this:
1. The government subsidies Rio Tinto in the long term to stay
2. The government takes a hit on the asset sale price

Ultimately, it might not even be the government who pays. The government might be setting up a lot of voters for failure; or will it be its reputation. I suspect the pain will be less if it just accepted the lower return because at least it can say, Kiwis had the opportunity to buy the asset. He can also argue that 'they got the price it was worth'. Well, true 'today'. But who knows what a bit of policy could do in the future?

Notwithstanding the benefits of selling the asset, it makes more sense to retain it for the time being. It would not do Key's reputation any arm by delaying the sale for 5 years. Interest rates will stay low, so whilst the government is getting a 10-12% return on investment, they are only paying 4-5% interest on the public sector debt. In the meantime, they might be able to raise economic activity. In fact, the global economy should start looking a lot more positive by that time.

John, you need to listen more. If I've told you once, I've told you three time. False pride go'eth before a fall. Your prospects for a third term looks pretty bad. Thanks for the legacy! Defer the privatisation. Great ideas have their time. Your timing is wrong.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com