Wednesday, January 15, 2014


One of the continuing failings of governments, of all hues, without exception, is the always demonstrated outcomes of inefficiency and expense incurred by managers with "no skin in the game", when Government attempts to solve problems in business by legislating or involving, totally or by degree.

Of course there are some tasks that will be left to the legislators as they are inherently only a cost center with no profit available. Defenc being one of a very few.

Occasionally an outcome seems on the surface to have been successful but for whom and at what cost is often hard to discover. On the surface bailouts can look good as in Air NZ, The BNZ, South Canterbury Finance (very clouded in most minds by the complicated associated entities involved) and even the Racing Industry lol.
When a bureaucracy picks winners, any reference to predicted and eventual outcomes is revealed as a yawning chasm but usually hidden by confusion and elapsed time

The "market" sans government input has a resilient way of correcting such problems without the cost of such corrections falling on taxpayers, a resource of compulsory acquired funding.

Sadly that does not stop the well intentioned and/or the agenda driven from repeating the mistakes and expecting a different outcome.

Key's cabinet resolved to prop up Rio Tinto and the Bluff Smelter on the grounds that it was an entity with current and future value, suffering what they saw as a temporary slump in demand for the only product produced, aluminium metal.
The Burnside Workshops OTH were judged to be without future although the traditional outputs were no longer wanted in volume, or able to adapt to any that would ever be profitable.

That did not satisfy the economic illiterates who judged the former as pandering to big business mates and the second as condemning good skilled workers to the scrapheap.

I see a difference here that the market could solve if it was a good idea and not just ignorant wishful thinking. If the Burnside closing was wrong commercially then why would not an entrepreneur step in and continue the business. Well quite simply it was just like Holden in Australia, it had no future.
The Bluff Smelter was only different in that a decommissioned smelter is little more than a junk yard as much of the infrastructure value is lost in the decommissioning. I reluctantly accept the support for Rio as justified, almost, if it turns out to be a one off.

I am a little mystified as to how the same busload can contemporaneously condemn both government decisions but they managed it with consummate ease and not many noticed the hypocrisy or even the irony.

Socialists just love creating employment that contributes little by way of creating a bigger pie, their efforts only create a greater demand for money and energy with an added bonus of a net gain in electoral support.
A diatribe in support of NZ socialism was presented by one Peter Davis as an article in the Herald from a rant prepared for the Fabian Society, anyone who thinks Cunman and Norcliffe are the answer should read it but then most would not understand what such tosh would actually mean for NZ Inc as an impediment to real sustainable growth.

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