Monday, 2 March 2009

Millions of dollars of bad ideas [updated]

At a cost of what Cactus Kate quite reasonably reckons would be several million dollars (”If you calculate the lost productivity and add in the time charges and travel costs of 200 attendees in that room for a day”), the Jobs Summit wrapped up with, as she says, twenty mostly crap ideas that any National Party caucus meeting or regular public sector advisory group would have been able to come up with – and probably reject right off the bat.

Christ almighty, the “big three” of those twenty ideas are a nine-day working fortnight that will reduce production while costing us all more; an investment fund worth hundreds of millions of dollars that will commence its activities by taking those hundreds of millions of dollars out of the same markets for loanable funds that genuine producers would like to be using;  and - the piece du bloody resistance - a cycleway the length of New Zealand.


If this really was a roomful of NZ’s best and brightest, then we really and truly are in trouble.

NB: Cactus has a wee profile of the dickhead who floated the cycleway pipedream, a poseur who admits "I've never tramped and never owned a bike since I left school," but “does have extensive experience … in walking round the Viaduct slowly enjoying the view with numerous pretty women.”

And Lou Taylor has an idea for the nationwide cycleway that might just put a $2.02 billion “investment” to the only work it’s every reasonably likely to be useful for – and it could pay for its own construction by selling off for scrap the under-used materials that presently run the length of the country.

UPDATE: The Visible Hand looks at the bad ideas from a mainstream economics perspective and concludes: “I don’t want the government to do any of the things suggested here - I think they will, in the current environment, make matters worse.” 

I agree.  But as Paul Walker at Anti Dismal said a few weeks ago, this is not about economics.  It’s politics.


  1. I generally agree with you, but just a quick question:

    How would a nine day working fortnight refuce productivity? Productivity measures inputs v the amount of outputs it produces. I agree a nine day fortnight would reduce outputs, but it would also reduce inputs. It seems to me productivity would remain the same.

    Happy to be corrected. The idea is a stupid one, I agree.

  2. No, I think you're basically right.

    I should have said "reduce production."

    I'll change it. Ta.


    Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

    Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

    Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

    But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."

    It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

  4. PC, I see that Mascot Finance is in receivership. Fortunately for me, I did not invest with them as I was not interested in their offering.

    Oh, just wait, I have just seen that I am "invested" with them. They are government guaranteed!


  5. Don't write off the cycle way just yet.

    If we can use this as an excuse to rip up 90% of the rail beds and turn them into a bus truck and cycle lane then it will be a great outcome.

    The feasibility study (joke study) supporting the proposed commuter rail link between Auckland and Hamilton could only forecast 90 users a day.
    The same route would attract more than 90 tourist cyclists. the Greens would decide what they love the most trains or cyclists?
    With luck they would end up like Pavlov's dogs.

  6. Haven't you sold Rail yet to avoid future liability?

    What are the Nats doing!!!

    PC - get them into line.

  7. Julian

    Would you ever invest in a company called "Mascot".....? Good point, why did the taxpayer.

    Muppets more like it.

    Expect more bailouts to come. At any rate there won't be any money left for these 21 silly ideas and stating of the bleeding obvious.

  8. There is a great nationwide cycleway already to finish off- just concrete between the rails!

  9. Haven't you sold Rail yet to avoid future liability?

    Sell it? Cactus, which planet are you on?
    No-one would buy it!

    We should rip up the tracks and sell the iron for scrap, along with the rolling stock. And anyone working for NZ Rail should be banned for receiving the dole or any other government handouts.

    (And before anyone says "Wellington commuters" - fuck wellington!) Once the government has been properly downsized, stick it in a couple of warehouse conversions next to the airport in Auckland and you're done.

    I agree a nine day fortnight would reduce outputs,

    Heh. That's why Key is so fucking brilliant. Make this compulsory in the public service! Then there is no reduction in output, but a 10% reduction in costs! Still nowehere near as good as simply firing the lot of them, but its still a start, and sadly, Key hasn't got the balls, or doesn't understand that the best thing he could do for NZ would be to eliminate the state sector as fast as possible.

  10. Anon and PC: the nine day working fortnight should reduce both output and productivity, I'd reckon. The decline in output is obvious. Results on productivity could go either way depending on whether you've got hard-core employees who push hard to get the job done in 90% of the time, or whether they keep effort levels constant. If effort levels stay about the same, productivity goes down if there's ANY kind of fixed cost to production. The fixed costs are costs the firm has to incur regardless of whether you're at your station that day. The machine that sits idle while you're not there still has a rental cost; the building's lights are still on if there are other folks there. Worse, if the firm has to hire more workers to get the same job done, productivity necessarily falls with any kind of fixed cost per employee (holiday time, etc). Results from France's attempted 35 hour work week are instructive -- didn't help anything and imposed costs.

    The only good thing that can be said about a cycleway, as compared to other infrastructure investments, is that it's at least the kind of work that shouldn't draw skilled labour from other sectors. As you've noted before, proponents of stimulus are far too quick to see labour as homogeneous: that there's a lump of unemployed people who'd be pretty much equally good at any kind of job the government might be hiring for. At least building a cycleway is pretty unskilled labour (or at least mostly is so). I'm still not in favour of it, but it'll do far less harm than governments spending the same amount of money on things like stadiums.

  11. Owen: The bus truck route idea is insanity outside the main centres, it is too narrow and duplicating infrastructure makes no sense where there isn't a lack of space to widen roads (and there isn't outside the main centres).

    The answer to rail is to let happen what TranzRail wanted to have happen. Let services be dropped from uneconomic lines, let anyone run a service if they want to

  12. The railway from Auckland to Wellington to Christchurch to Dunedin is profitable, it is the price setter for freight on this route. The coal from the West Coast is also a profitable route. The rest? Well with a few exceptions the lines should be run into the ground, with others allowed to provide services. If not enough are prepared to do so, leave the line mothballed for a few years (ala Australia) and when it is no longer usable, sell the steel and offer it as a cycleway to those willing to donate to pay for it.

  13. Without wanting to get into an extensive debate I suggest you are not factoring in the new technologies coming on stream which revolutionise truck/bas convoys on dedicated lanes.

    Our roads are full of hills and these new technologies deliver their efficiencies best on beds with low gradients.

    Time will tell.

  14. If the National cycleway is such a good idea, then (by the same reasoning) something even more intensive would be even better. How about a national canal? It would run the length of the country. Imagine how many people could be employed building it. When it gets to the Cook Straight those same people could spend one day a fortnight being trained how to swim. It would be called the Key Shute and when the economy fails to be resucitated by this boondoggle the Key Shute could be filled in and then redug again. Key + Keynes + National Socialist govt = doom.



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