Living with banks in NZ

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I have had 2 reasons for dealing with ANZ in New Zealand recently, and I must say that the service suxs. The bad news is that its not just ANZ, its probably all banks around the world. Why are they so privileged; when they sux worse that most people. Here are the issues:

1. ANZ Cheque cancellation: A bank cheque does lost in the mail. I presumptuously went to the bank thinking that they would be able to track down the cheque within a minute. Because they did not actually track cheques, offered no reference on the bank statement, it took 30 minutes for the branch attendant to realise that she can't help me without a receipt. I gave up, deciding to look for a receipt. The bank did not have records online for more than 3months. So I went to another branch. This time armed with the exact date I drew the cheque. She found the branch; the details were not online. The branch finally called back with a cheque number; at which point we were referred to the wrong person, then the right person. On Gmail I can find my details in seconds going back 5 years. These mega-corporations with immense resources cannot track down a bank cheque within a minute....it takes them 90 minutes....and 4 staff. Unbelievable! 

2. ANZ Withdrawal: My partner and I were overseas and we had $709 withdrawn from our account. We could not account for the missing funds, so we contacted the bank. They could give us no information for a day. Once again, there was no information...just withdrawal 05464463535333. Suddenly the funds appeared the next day. It seems the funds were withdrawn without explanation. 

3. ASB Automatic withdrawals: I had a previous experience with ASB Bank as well, owned by Commonwealth Bank of Australia. Now, I have a long history of problems with CBA in Australia, principally related to the stunted individual who was charged with sexual harassment in their securities division COMSEC. I was initially impressed by how quickly they were able to set up a bank account for me. The problem arose because an automatic payment placed by account in arears, and I received a sequence of default fees which reoccurred, and the bank manager was not there to fix the problem. She was the only one who could resolve the issue. 

4. Commonwealth Bank - The owners of ASB in NZ. I have a separate blog for describing my experiences with them. In fairness to this bank, they offer pretty progress services in their main banking division, and have lead the rest of the industry in new initiatives. From an operations perspective however, they really suxed in their COMSEC division. 

I know one of these banking executives. There is nothing special about them. They might have good memories....the one I'm thinking of is the son of former banking executive. So self-important, so deficient in self-worth, so arrogant....yep, give then million-dollar salaries....that will make it a better world. If anyone thinks this society is designed to reward 'achievers' think again. My experience is that achievers are spurned and marginalised. Change the political system - its the key!

I had hopes that the class action against the banks would put them in their place. Sadly, the judge took a 'letter of the law' interpretation of the law, as opposed to a contextual approach. Oh well, life drags on. 

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

Pike River Coal Mine Disaster: The cost of public administration

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The Pike River coal mine disaster highlights why you cannot rely on government to be engaged in operating or executive roles. There are several problems:

1. They are idiots - they do not know about life. Their entire thought process is antithetical to critical thinking. They are modern-day serfs; not suited to regulation or monitoring under the current system of govt.

2. They have a conflict of interest - The Pike River Mine was owned by the operating & marketing company Pike River Coal. This company was listed in Australia and NZ; but in reality the company was not so independent. It was substantially owned by Solid Energy; a 100% government owned enterprise. You can imagine how little compliance or accountability will result when you have two idiots talking to each other.

In the context of this case - a disaster was imminent:

1. The lack of public oversight

2. The gassy coals

3. The lack of UG mine experience

4. The recruitment of poor staff - those that couldn't get a job in Australia for 2x the wage.

Read this article. The problem here is public adminstration under representative democracy - it does not matter whether it was a Labour Party or National Party government. i.e. Labour cut coal mining inspectors; and National Party could equally care less.

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

Dialogue with Don Brash over central bank accountability

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This is a Facebook conversation I had with Don Brash, former Governor or the Reserve Bank of NZ, and former leader of the National Party on the current economic crisis.

Andrew Sheldon talks to Don Brash

Don, do you accept (or better still, have evidence to suggest) that governments (say the US or UK) are too cozy with bankers. When you look at how the US has bailed out the banks rather than plausibly supporting the creditors, might this point to an underhanded relationship between the two...for mutual (dubious, unenlightened) self-interest. And should not have the National Party have anticipated this crisis a decade ago...I know I did with a great many others. Why did NZ, Aust, Canada central bank governors allow it to go on... Perhaps you only want to speak for yourself? But perhaps you could also speak generally.

ADDENDUM: My criticism of US government fiscal and monetary policy extends back to 2000, however I only started blogging in 2005 – and continued my criticism.

Top of Form

Like · · October 11 at 2:46pm ·

Don Brash

Andrew, no, actually I don't think the US and UK governments have had too close a relationship with the banks. The reality is that the banks are at the very heart of the financial system - both the credit system and the payments system. The governments of the US and the UK (and of course of many other countries also) realised that the collapse of their banks would have had an impact on their whole economies which would have been utterly disastrous, so they bailed them out. Should they have regulated them more tightly to avoid the banks getting into trouble? Don't get me started! I blame the collapse of the banks in PART on the policies of some of the governments, in part on the greed and stupidity of some of the banks involved, and in part on the very tight system of regulation which actually led many people to assume taht the banks were effectively government guaranteed.

You ask why did NZ, Australian, and Canadian central bank governors "allow it to go on". I'm not sure I understand your question. The banks in those three countries are among the most robust in the world.

October 11 at 8:58pm · Like

Andrew Sheldon

By the last part of the question, I meant in terms of weighing into US, EU, Japanese govt policy decisions, an independent central bank believing that the substantive financial markets which underpin their demand have a substantive interest in 'sustained growth'. The policies of these govts have undermined global growth...that affects every economy. Say for NZ, does not the central bank have a mandate to preserve growth, thus weigh into international markets which affect their outlook?

October 11 at 9:05pm · Like

Andrew Sheldon I appreciate our banks are fine...more concerned with the broader economy, and the unsustainable interest rates which lured in home buyers, causing injury....not to mention the effects in equities.

October 11 at 9:06pm · Like

Andrew Sheldon We might reasonably expect the IMF to be independent...but sadly their role seems to be compromised by their need for OECD country funding

October 11 at 9:08pm · Like

Andrew Sheldon IMF says very little whilst 9 of 24(?) OECD countries have debts over 100% of GDP.

October 11 at 9:08pm · Like

Don Brash Not really fair Andrew. I've read plenty of IMF Papers which are highly critical of the enormous debts of many OECD countries.

October 11 at 9:19pm · Like

ADDENDUM: So does this reflect on the media’s lack of interest in bad news? Why might that be the case? It was very years ago to find a journalist offering critical views on the economic outlook. One of the few was Max Walsh, Editor-in-Chief of The Bulletin (Australia). Is the editorial content of the media skewed towards good economic news…even though there was a lot of critical economic analysis around from 2005-2008 outside of the mainstream media.

Andrew Sheldon

True, sovereignty lies with national govt...so what about central bank governors...what stops them from being more critical of foreign central banks and govts? They are independent from govt supposedly, so no embarrassment...just political integrity issue. i.e. Would Simon Power get a job with Westpac if he had an unfavourable Commerce Dept policy towards the banks....well, I know the answer because bank fees are a form of extortion...the basis of a class action in Australia as we speak.

October 11 at 9:46pm · Like

Don Brash Andrew, you are certainly right that central bank governors are reluctant to criticise other central bank governors. But who would you like Alan Bollard to criticise at the moment if you had your way?

October 14 at 9:20am · Like

Andrew Sheldon Ben Bernacke, ECB gov, all govts for adopting regulation which distorts rather than protects; for sanctioning extortion or 'numbers' rather rationality as the basis of political discourse.

October 14 at 9:49am · Like

Don Brash

Not sure that I understand your argument Andrew. To the extent that central banks are preoccupied with maintaining the value (purchasing power) of their own currency, I would have thought that most developed country central banks are doing OK at the moment (as measured by inflation, which is the only basis for assessing whether purchasing power is being maintained).

I share your concern that banking regulation may have actually contributed to some of the banking system problems, but central banks are certainly not the only ones (or even the main ones) to blame for the problems in the banking sector. In the US, for example, a lot of banking system problems stem from political pressures since at least the early nineties for banks to make loans to uncreditworthy, and marginally creditworthy, borrowers.

October 15 at 7:32am · Like

ADDENDUM 1: Actually, governments have a monopoly over the initiation of force. It was the Clinton administration who deregulated the banks in the USA; thus we ought to blame there for facilitating the actions of banks, which was largely acting ‘legally’ despite a few exceptions.

ADDENDUM 2: Actually, governments should be preserving a stable or fixed amount of currency relative to growth so that purchasing power actually increases. i.e. The amount of their wealth increases whilst the value of goods remains stable. We currently have ‘flat’ or ‘non-trending’ asset prices, no income growth, and rising product prices. i.e. We have inflation, i.e. Erosion of the real value of goods. It will not readily show up because govt masks the impact of the more volatile factors, i.e. rent, fuel, food,; arguing that they are too volatile to measure. True, but in the long run, they should not be ignored.

How can you be sure of that? How do you measure economic activity efficiently?

Andrew Sheldon

If central banks were duly concerned with preserving - or better still increasing purchasing power (as we live to progress I believe) - they would take measures which achieved maximum, but sustainable growth. Notwithstanding the fact they are confined to monetary policy, as an independent agency, there is no reason they cannot have an opinion on fiscal policy, and offer another element of accountability. Rather than debase their currencies, the US central bank lowered rates to extraordinarily low levels, govts like Aust subsidised great, Fannie Mae was instructed to offer the poor loans, creating a great deal of debt, and only in the last 3 years have we seen debasement of debt with quantitative easing...but there is more to come...causing more inflation. It’s about pushing the trauma into the future. If govt would only stop distorting the economy, each would be able to achieve growth of 8-12%...not the 1-3% we are accustomed to. The idea that we can only grow at these miniscule rates is because of govt...look at the Maritime Transport Act..calls to update it in 1998...its now 2011. It will happen now immediately after the election. Meantime priority 'distractions' for govt - aside from earthquake - rugby, seabed issue. One gets the notion, govt is about putting out fires, placing defensive.

October 15 at 8:13am · Like

Andrew Sheldon

Ultimately, I blame govt for being politicians rather than statesmen. They live within the system, lacking the ideas to change it. The problem is not the central banks per se its the govt which sanctions everything they do...its the idea that people really have any influence; that we have participation, choice?? We don't. We have a pretence of choice. We have a pretense of rationality within parliamentary debate...when really its a 'numbers' extortion game legitimatised by 'participation'. Tell me what participation I had in any piece of legislation. If I make a submission, what option do I have to hear criticism of my submission? None. How am I to know if it’s been read? Can't. There is a short range agenda to stay in power which means 'slow change' rather than selling ideas because our elected MPs have not developed a coherent philosophy before entering politics. I'd actually say you are better than most. But when or if you get substantive influence, you will become inaccessible, and centralised govt and universal suffrage will ensure you are motivated by the wrong priorities. You will become like the NP and Labour - 'constrained' by the system. Banks are custodians...they are not acting in accordance with their fiduciary duties; though you are right, govt requires no compliance from them. Another problem is the unconditional expropriation of wealth by taxation. Unless a voter has the right to renounce their sanction of govt by withholding tax, they are slaves. Representative democracy is slavery; we need a meritocracy where reason is the standard of value.

October 15 at 8:24am · Like

Don Brash

Andrew, I'm afraid I don't have time (and I'm not even in Parliament yet!) to reply to all your arguments. But let me just, in defence of my fellow central bankers, say that central bankers should not be increasing the purchasing power of their currencies (that would mean steadily average falling prices, or deflation). If money is to be used as a store of value, and as a measuring rod, it is important that it neither decreases in value (as with inflation) or increases in value (as with deflation). Most central bankers acknowledge that the only way in which they can help economic growth is by keeping the value of money stable, so that consumers and producers can use the price mechanism to inform their decisions. You obviously fear that successive rounds of quantitative easing will cause inflation. Yes, it may do, but it certainly hasn't done yet, and I strongly expect those central banks which have undertaken quantitative easing to reverse that process at the first sign of inflation.

ADDENDUM: Whose fault is that Don. You joined the ACT Party just 2 months ago, and his is the only opportunity I get to talk to you, and when the questions turn a little hairy, you evade them. That is govt; you don’t need to be a parliamentarian…you think like one merely as a candidate. You are over-qualified…that is the problem.

October 15 at 2:14pm · Like

Andrew Sheldon

Don, there is nothing inherently bad about increasing purchasing power; that is wealth creation. Yes, you can match the growth in money supply to productivity to stabilise prices, but that is not what the Fed Reserve has been doing. It has been stimulating debt levels with unsustainable low rates of interest....now there is a great deal of defaults, so debasement or recapitalisation is necessary to avoid default of that debts, say in USA, EU, etc. Mass transfer of wealth (via extortion). The poor suffer the most. Measures of inflation are entirely selective and arbitrary...just look at MS growth over productivity or economic growth.....to that you say, QE 'might cause inflation'? Ask yourself why QE is necessary at all? Why did asset prices rise so high? And how inflation is avoidable? Inflation will inevitably cause debt defaults among those not propped up. You seem to think there is no causal relationship between MS and productive capacity? It is true strong wealth creation in China and the developing world is offsetting OECD antics...but the relative distribution of capacity is going to create a productivity gap.

October 15 at 4:10pm · Like

Andrew Sheldon Don, the evidence does seem to suggest inflation ahead...this at a time of subdued confidence. Read this inflation news from the UK, and I've seen similar from Australia....

ADDENDUM: Don seems to have stopped talking to me; so because he is focused on getting higher profile attention, I thought I’d bring this to the attention of the media, because they love a controversy.

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

Rio Tinto out - the extortionists move in

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“Rio Tinto puts Tiwai Pt smelter on block” by Brian Fallow, NZ Herald, website, Oct 18, 2011.

This is an interesting move – Why is Rio Tinto selling off some of its aluminium assets? Zinc alloys more popular? Alumina reserves at Gove near exhaustion? Overpriced power in NZ due to a failed privatisation policy? Inability to build a hydro plant due to a poor regulatory regime?

NZ has the lowest average electricity generating cost in the world, but the mark-up of residential over industrial electricity prices is among the highest in the world. i.e. Higher than Japan or the Philippines. For an industrial company like Rio Tinto this is not usually a problem, as they have the financial muscle to build their own capacity. This is not so easy in NZ given the communities sensitivity to thermal energy. The National Party has said it is opposed to Helen Clark's policy of prohibiting new thermal power generation. The other problem is the structure of the electricity market. There is a very large resource of lignite in Southland...but clearly the National Party has created so much bad press about coal mining that I can't see Solid Energy having an easy time developing that resource. Its a very good lignite resource in fact...but there are other uses for this fuel, i.e. A Victorian university is developing a compressed fuel briquette.

Companies sell assets which are dogs or which are not a strategic mix because of their other asset mix or price outlook. Selling 1/3 of capacity means this is a strategic jettisoning of high-cost, low or no-growth capacity. That’s why its unstrategic. And yes, its hard to compete with China because it has subsidised electricity, and offers the cheapest conversion costs in the world….and I suspect there is large resources of alumina in Mongolia or Siberia….but that needs to be confirmed.

These assets are dogs....if you are an investor...do not buy them. NZ - if you want to avoid losing an export industry...think about electricity market restructuring. This will however bite into the govts hidden tax collection from privatisation....so it looks like these assets will probably be closed in years to come unless a 'mysterious' buyer emerges. The last ($500mil) upgrade to the NZ plant was in mid-1995, so the depreciated value of this asset must be close to zero....and this is a protracted recession.

The implication of this asset sale is - NZ will in about in 3-5 years have a spare 12% capacity surplus, so this means NZ generating assets are in many respects a dog for investors given that the country has bugger all industrial activity and population growth. Thus profitability will have to come from customer extortion. Trust me....you don't know how painful government can get. Consumer extortion in a small, stagnant market like NZ is the most lucrative way to make money; particularly if you function in a 'self-regulated' market.

The implication is - it would be silly for the NZ government to sell off its power assets for the next 5 years; and it would be silly for the NZ people to allow them to do it until they compel the Commerce Commission to fix the flaws in the NZ electricity market structure. The flaw is the structure of the market. With 70% essentially free hydro generating capacity, and electricity prices charged at the marginal price (set by thermal and wind capacity), NZ is paying the highest cost of electrcity, when there is actually very little demand. i.e. Why do generators need to charge so much - they don't need to build any more new (expensive) capacity. Prices are rising because executives cannot get bonuses until they can extort profits from residential consumers. This is why NZ needs an effective regulation system. Nothing about Labour, National, ACT or the Maoris give me reason to think any of them have the intellect to anticipate these issues.

Big business will realise....because they have smart analysts like me. Ok, not as good as me, but then few of them have as much respect for facts, nor have they studied philosophy, so public policy can be a 'no go' zone for them. Too much conflict. Morality...uuuhh!

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

Competition alive and well down under

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According to the senior executives of Jetstar and Air NZ, the recent and 'short lived' offer of $1 and $5 flights to Auckland is a sign of real and effective competition in the aviation industry. That's right, the airlines were offering 600 tickets for just 1 hour the other day, and on just one of their hundred-odd routes, and that constitutes competition.

In fairness, there is going to be some competition in this area, and the reasons are:

1. Displacement of services from Christchurch - The new terminal is complete at Christchurch airport, and I am guessing that the airport authority will be looking to raise airport fees paid by the airlines. This I believe is why Jetstar is trying to lure people to Dunedin airport. This is particularly appealing for all those travellers coming from the South. That's right, you might have to travel as far as 8 hours from the far south because of the limited connections offered from Queenstown and the premium prices you pay for them.

2. New market entrant - Air Asia is a new discount entrant into the market. It will lure passengers, but it is only going to take market share from those flying to Asia; so Jetstar after Pacific Blue's exit is going to retain the lion's share of the Australian market.

Dunedin is a big of a hole. Its a very ugly city, and its layout is messy. But it seems, if you can both chancing 1-hour discounts, and you are lucky enough to hear about one, they are not really competition. Really they are token gestures offered by airlines, and duly reported by the media. Sounds like cheap advertising to me. Yep, there are plenty of airlines offering 'discounted tickets'; the problem however is that there are:

1. So many conditions attached to them they are not worth having, i.e. No meals, no flexibility to change the flight, substantive luggage restrictions, highly pernicious penalties complying with their restrictions.

2. The need to carry the risk of buying a ticket you cannot cancel. I suspect they have made as much on unused tickets as those used.

3. The burden of having to read their 9-page list of conditions; or carrying the risk of not reading them.

Yes, competition in the modern era is an illusion. Its all about perceptions, or 'smoke and mirrors', or 'bait and switch'. There is a law against bait advertising in Australia....this seems to breach it. But of course there are those wonderful inventions - the 'asterisk' (i.e. *). They are magic to the business community. They only need to ensure that they have one on the advertisement, and all conditions are in play....and that makes it not 'bait advertising'.

For sane people like myself, the letter of 'statutory law' denies too much, and that the spirit of the law is in breach. Statutory law offers no prospect of justice so long as:

1. It remains arbitrary - no rational, principled basis, no spirit, just 'letter of the law' loopholing. i.e. The law has no context.

2. Justice is expensive - high legal fees, and the prospect of court appeals

I recall a case of a car rental company being challenged in the court by a customer who was charged enormous legal fees for the privilege of saving $50. Seems like a false economy to me. No one it took 10 fees for the practice to be challenged. In the 'common law' case of bank fees, the banks are being sued in a class action in Australia after 20 years of duping customers.

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

The prospects for a competitive telecom market in NZ

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You might ask - what would a free marketer like myself expect from a NZ broadband network. We all have long come to understand that free markets don't always deliver desirable outcomes. There are reasons for this:

1. Cross-market subsidisation - profits extorted through market power in some market can be used to finance new investment in others. We thus want to ensure in a global world that companies are able to finance improvements to services, but that any surplus profits are invested in the local business.

2. Market collusion - profits are not able to be excessive because two market competitors are able to extort excessive prices from the consumers who have no 'effective' choice. It matters little if there are just two players pretending to compete or 10 who have a formalised price-following or price-targeting strategy. i.e. You might find that the CEOs of these companies get together and they decide that in 2011 Telco A will be the price leader, in 2012 Telco B will lead any price changes. It goes without saying that those pricing changes will be favourable.

3. Transfer pricing - They all establish enterprises abroad, say in Ireland (with a lower tax rate), which purchases the hardware, and they pass on the costs to the NZ operating entity, so they look competitive, and profit margins look thinner.

4. Accounting tricks - Maybe they will use creative accounting to understate profits, such as making provisions for the acquisition of future capital, or the depreciation of old plant, which help to understate costs. These provisions don't even have to be real; they are just planning, so those profits can be released at any convenient time.

The question then becomes as to how does one achieve a truly competitive market? Or how does one ensure that business earns a reasonable profit, business has an incentive to cut costs, but at the same time provide an efficient service; and how does one get business to accurately and honest report its performance such that the market achieves an optimal outcome. We might also ask:

1. What constitutes fairness? Who gets the market surplus created in these transactions - the consumer or the business operator? Who created the surplus? Business.

2. What right does the consumer (or the government) have to ensure surpluses are not invested abroad in new or more competitive markets?

These are the intellectual questions that never seem to get answered. They are not new questions. They were asked and answered by people like David Ricardo and Karl Marx; not always with desirable interpretations. Far from wanting revolution, I would like to see an efficient market. Perhaps the strongest prospect for competition comes from a change in the way we structure society. This is an intellectual debate we do not have because our political system is so impervious to ideas. People are so concrete-bound. They are reluctant to engage with ideas, because the legislature does not place a value on ideas. It values perceptions because that is what the majority of voters respond to. They response to the 'concrete' because they have no effiective power, they have little specialised interest in all-manner of issues. So they are passive, only responsive to subtle messages.

I am not going to answer this question here. The greater issue is our political system.

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

Pike River Mine tragedy: The competency of management

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The more information that emerges about this mine accident, the more one is compelled to reflect on what plausibility could be the reason for the accident. An inquiry will make the final decision after hearing submissions, however after reading the latest news from the NZ Herald, I am going to raise several points:

1. The current CEO was appealing because he had a relationship with miners in the area. He was therefore appealing as a CEO candidate because he had the capacity to keep wages low. It is a small town, so a 'liked CEO' has the capacity to stop 'wage extortion' during a coal mining boom. This is a small town, so you want to appeal to 'old town' values right? Did this result in safety mistakes? Did he have underground mine experience in Qld?

2. The latest news suggests that the operations manager at the mine was "a former Deputy Chief Inspector of Coal Mines with the Department of Mines in Queensland" (source). This is a concern to me because you have a bureaucrat running a mining operation. A certificated mine worker has since convinced me that this manager was experience in underground coal mining and that he was very safety conscious. He has worked with him, and argued that I should not attribute blame to him. I have attempted not to do that because (like most), I am on the outside...merely highlighting plausible causes for the disaster. Gas and coal dust explosions are preventable. Its possible this could have been anticipated, but it must be acknowledged that even the best supervisors cannot completely avert poor practice because they must delegate responsibility, human error, someone has a bad night, etc. Taking work in NZ could ultimately be considered a step back in one's career, or maybe it was a retirement decision. The inquiry will make the decision...this commentary is only intended to assist any family ensure all bases have been covered.

So you might ask...how is the government to blame for this? Well, its a long straw, but aside from the points I have made elsewhere, the problem arises because of government for several reasons:

1. Government regulation makes decision-making arbitrary and overly centralised, resulting in bottlenecks in supply and demand. Govt makes markets less efficient.

2. Chinese huge energy demand which sees corporate entities making 'life-threatening' decisions for the sake of large profits, or distorting markets so others are marginal, can tend to result in 'short cuts'. The Chinese demand was because of political oppression by the Chinese 'government', and now suddenly they release the oppression, you get an economic and investment boom stimulated by cheap wages. The same thing happened in the Industrial Revolution. The distortions created slum conditions, which we see today in Chinese cities. Its not news so much in the West because there is no modern-day Karl Marx going to China and reporting on it. It will probably happy. Probably some rich liberal too; but that won't stop the 'maligned working class' from blaming all rich people and capitalism.

They will be too uneducated and unthinking to make any reasonable analysis; but it won't stop them from duly disparaging capitalism and capitalists with smear as to its impracticality, when it was always socialism and the socialistic distortion of capitalism. You will hear only smear about 'greedy capitalists'. You will not hear how this Pike River CEO was under tremendous pressure, knew the workers personally, regarded them as friends; nor the fact that he cried over their losses. Cynicism will rein and they will disparage people on dubious ideological grounds. That does not mean we should repudiate ideas. You don't throw the baby out with the bath water....as moral sceptics are prone to do...you remain a critical and engaged thinker.

It was just released that their has been a 2nd mine explosion at the Pike River operation on the West Coast of NZ. The Police Operations Commander has come out to defend his decisions. He argues that a 'team of experts' has made this 'logical' decision. One might wonder whether it was a 'majority' vote, and whether there were any objectors or critics of the strategy from within the team. Governments, in fact many decision-makers, are reluctant to convey that it was a difficult decision. It would therefore be good to know - who objected to the strategy and why? Have those objectors been vindicated? We might never know if their were any objections. Hopefully the media will ask the question, and if the media will have access to them. I suggest there may have been a poor decision-making process in place. i.e. A democratic one as opposed to an objective one. There is a belief that if you take a democratic vote among experts you will get the best decision. You don't! You get the smarter people stifled by political agendas and committee-talk. There needs to be a process of reconciling conflicting ideas in order to develop the best strategy. The process by which decisions were reached was not developed.

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

Paul Henry not to blame - go after TVNZ

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There is a typical over-reaction to the current news of a TV presenter Paul Henry making some pretty controversial statements on his Breakfast TVNZ program in NZ. The host is supposed to be provocative and with respect to this show, political correctness goes out the window. The program really does appeal to the red-necks who hark back to the old days of NZ pride. Those days will not be revisited for probably another 2 decades, however it does auger well for better TV content is such persecution of minorities is not encouraged, and not given a voice.

The question you might ask is - was it his fault? Or does the greater responsibility lie with the host. Was he not employed to be provocative. Previously on his show, the host had disparaged gays, and other minorities. Does this not reflect on a section in the NZ community whom TVNZ is obviously targeting. Only TVNZ knows how lucrative this market is. It must be retaining the program for a reason. mind you - his attitudes need not reflect their racial views. He might simply resonate with viewers because he speaks his mind.

Collectivism is the dominant global value system. Do not expect racial prejudice to disappear as long as that remains a reality. Collectivists have a group identity, whether its NZ or Indian pride, and NZ has a higher proportion of collectivists than NZ, because its ideological base and lower literacy rates support that premise.

The bigger issue is - who is responsible. I actually think it is the TVNZ executives who ought to lose their job. They have committed the greater indiscretion by allowing the show to continue in its current mode. They ought to have reflected on the content, and adopted some standards. Did the program need to be live? It was very careless of them to have enabled this 'shock jock'. I think he was doing as he was paid to do. He ought to be counselled into changing his ways, but ultimately it is TVNZ which ought to be subject to reprimand here, not the TV host. This is not however the focus on media journalists. They chase the bone.

One has to ask what is the problem? Racial prejudice in NZ? What is new? Is it new to India either? Come on...there is no story here. Its no more significant that my neighbour being prejudiced. Ask yourself how many racists are in 'collectivist' India, not withstanding a significant number of individualists there.

I think it is hard to censure every thought you make on TV, on a live program. The response of the govt-owned broadcaster, was more serious because they had the opportunity to reflect on his comments.

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

NZ road rules - second to none

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NZ had finally decided to change its antiquated road rules. In its wisdom some years ago, NZ bureaucrats decided to develop a set of unique road rules which even its smartest intellectuals would not abide by. These road rules are interesting because they attempt to embody 'politeness' into driver road rules. The scheme was a blatant failure. Why? Because people are inherently self-interested. The 'polite society' succumbed to the realities of human nature.

I am not even going to bother describing these silly road rules. Why? Because they are so counter-intuitive, you will start to have nightmares. But get this - these road rules - which no one follows - will not be changed for another 2 years. You might wonder why because the logic is that they should come in after the 2012 Rugby World Club. Why? I guess because NZ loves the opportunity to suffer longer, and because it wants to utterly confuse foreigners with its 'unique culture'. And I guess it does not mind losing a few more lives in senseless accidents. Oh, and I guess it never occurred to people that what comes naturally to people will be an easy adjustment. Expatriate NZ'ers will thank you for sparing them any more confusion.

Rather than waiting until 2012 to apply the changes, why not simply send every household a brochure about the road changes. i.e. 1.5 million households x $2 = $3mil plus costs. This is a lot cheaper than the $70 mil in losses due to increased road accidents. NZ could also do with the resulting lives for population growth, and it might even improve the country's rankings in the international relevance index.

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