Barbershop thoughts

I'd be surprised if something like this didn't already exist, but if it doesn't, it'd be a great feature for Spotify (or another of the streaming services).

I was sitting in the barber's chair yesterday when something that sounded a lot like Spotify's 80s New Wave collection came on. It was rather good. It was almost what Spotify's Daily Mixes might recommend for me some days. I was mildly proud of myself for finally remembering, two songs later, that the one that had been bugging me was by Echo and the Bunnymen.

Imagine a barbershop with some staff with musical preferences and customers who also have musical preferences. If clients with scheduled appointments have their Spotify handles loaded into the shoppe's roster, there'd have to be a way for Spotify to run an adaptive playlist that takes some least-distance measure across all the liked songs by the people currently in the room, filtered through some basic parameters the shoppe might set. The shoppe might wish to rule out songs with explicit lyrics, for example - or it might not. Or it might have an upbeat or relaxed or whatever vibe that it tries to go for - and the algorithm could then pull appropriate tunes from the customers' playlists.

It should have applications beyond barbershops though. House parties without a DJ could just let Spotify configure things after the host says who's there. Heading out on a road trip with friends? It would pull from the favourite tunes of those in the car without anybody having to muck about.

And having the feature would increase the value of network effects in the player with the feature - if your friends are using it and you want your tunes to start showing up when you're at your friend's house, you'll want to be on the same player.

I'd be surprised if one of the streaming services weren't already doing something like this though.

Due diligence and the Irish Central Bank

Barriers to exit are barriers to entry. If you're going to hire someone to a permanent position, you have to do a lot of due diligence. When I was on faculty at Canterbury, recruitment processes were very thorough as we appointed faculty to permanent positions - the norm in America is appointment to a limited-term position after which a faculty member may progress to tenure. So we tried to be careful. Mistakes could last for a very long time.

This morning, Radio New Zealand reported that the Irish Central Bank would not withdraw its offer of appointment to Secretary Makhlouf unless there were findings of "very very grave misconduct" in the current investigation.

That is a substantial barrier to exit. Firing governors of central banks should be hard if central banks are to be independent.

But where there are heavy barriers to exit, you need a lot of due diligence at the front end.

When Radio New Zealand's Madison Reidy asked economists around town whether I'm out on a limb in what I've been saying about Treasury, she couldn't find anyone who disagreed with me.

So I wonder just what kind of due diligence Ireland's version of SSC has undertaken. Did they ask any economists in New Zealand about how Treasury's fared over the past few years?

Hide the Decline

Back in April, Madison Reidy interviewed Treasury Secretary Gabriel Makhlouf about the 2017 Treasury Stakeholder survey. That interview didn't air until this morning; it's here. 

I'll do my best to transcribe the relevant bit here.

Makhlouf: Sometimes we haven't done a good enough job at engaging with stakeholders so they understand what we're doing and why we're doing it. I'd like to think that if we did that survey today, we'd get a better set of results.

Reidy: Shouldn't you be doing these measures again this year? You do it every two years.

Makhlouf: Oh we've done, umm, I don't know if we are going to do it again this year.

Reidy: Is that because you had such a poor performance last time that you're not going to measure it this time around?

Makhlouf: No it's because we're actually implementing a whole bunch of changes which we want once we've got to a particular point in our change program that we'll then want to assess how that's impacting so it's just a question of timing as to when we do it.

Reidy: It's all good and well to say to me that you know you think you've changed and that the perception of what the Treasury does and is is now better but wouldn't you want that in hard numbers?

Makhlouf: No no no I will do, I just said, I think it's just a question of time of when we do that.

I wonder whether that survey is yet underway. I was a respondent in prior years' iterations, and that would have been about this time of year. I expect RNZ will be following up to see whether the 2019 survey has yet been started.

The worries aren't Just Eric. I'm just the only one willing to have my name on it. Reidy followed up, as is eminently sensible.

Other top economists RNZ Business spoke to - who did not want to be named - shared the concern and frustration over Treasury's apparent weakened performance.

Independent think tanks are important.

Update: Reidy clarifies a bit further on Twitter, in response to criticism that she shouldn't have been talking to me because neoliberals, and that everyone else required anonymity.

Sure, but there is no economic thinking behind this criticism. They are people who are generally concerned about the quality of what should be the gold standard in their industry. None of this was orchestrated, I called on them individually and they all said the same thing.

— Madison Reidy (@maddireidy) June 9, 2019

The *all* seems significant.

The long term rot

Over at The Spinoff, I go through the problems at Treasury I've been chronicling here for some time. Most of this will be familiar to loyal readers, but I do put a couple of new bits in.

The Spinoff truncated a couple of bits for length ... I did go on for a while. The shorter form version is here; we have the full one over at our site.  

If the Canterbury earthquakes taught us anything, it’s that the immediate response to a disaster is a very different thing from the rebuilding that has to follow.

Disaster response is about triage, the good-enough, and avoiding substantial further harm. The rebuild is different. It takes a fair bit of thought about what the place should look like, and a long-term strategy to get there. In the best case, the long-term vision has always been in place and all that needs to be done is working out how to get there from the current mess. But it can be a lot harder if there were a lot of longer-standing issues prior to the disaster that also need to be resolved.

The State Services Commission’s investigation of Treasury Secretary Gabriel Makhlouf’s conduct and statements during last week’s unauthorised access to budget documents is disaster response. But this disaster was not the Christchurch earthquake, and the IT department is the least of Treasury’s issues. Last week’s mess is the culmination of years of mismanagement at Treasury that saw the substantial erosion of Treasury’s competence. Treasury’s core role as the government’s lead economic advisor has been put at risk.

Treasury needs a recovery, and a rebuild. The job facing any incoming Chief Executive will be exceptionally challenging.

I expect Minister Robertson will be watching the appointment closely; it's just too expensive for a Finance Minister to have an unreliable Treasury. 

Read the whole thing at the link above. It's good to see that the piece is making the rounds as it should. 

Protecting the Privileged

Over at Newsroom ($), I wonder why we extend employment protections designed with vulnerable workers in mind to Chief Executives - and just what the heck does somebody have to do to be fired as a public sector Chief Executive.

It used to be the case that the question of firing of public sector chiefs never even came up. Senior civil servants would themselves tender their resignations for catastrophic failures, and Ministers could accept or reject those resignations as appropriate.

But when a resignation is not offered for performance this far off the norm, and the appointee continues in the position, something is manifestly wrong - either employment law as it relates to senior executives, or the government’s willingness to put up with exceptionally poor performance.

Treasury has not had a good week.

... But the Minister cannot fire the Chief Executive, even if he wanted to. Chief Executives in the New Zealand Public Sector are appointed by the State Services Commission and can be removed only by the State Services Commissioner.

Section 39 of the State Sector Act 1988 states that the Commissioner of the State Services Commission may remove the Chief Executive of a department or departmental agency from office, with the agreement of the Governor-General in Council (in other words, Cabinet), for just cause or excuse.

This past week would seem to constitute just cause or excuse on a simple, normal English reading of the term.

But few things in employment law are ever simple. Employment law and case law around it has developed to ensure workers’ due process rights. Whatever your view on appropriate process protections for dismissal of junior staff, highly paid Chief Executives need to be able to be dismissed quickly, easily and without payoffs.

It seems absurd to view senior executives in the private or public sector as being in a vulnerable position in relation to their employer and needing the same protections as less privileged workers. But that is where the law seems to sit. A 2017 Members’ Bill from National’s Brett Hudson would have made it somewhat easier to dismiss senior employees, but was voted down by the Coalition Government.

And it may be prolonging Treasury’s misery.

...If Minister Robertson were to indicate extreme displeasure with the Secretary, or to categorically state he had been misled by the Secretary, he could be viewed as prejudicing the outcome of a due process investigation. If he does not, National will continue to attack him as complicit with Treasury in last week’s allegations about National’s so-called hacking.

The State Services Commission may wish for a tidy and quick investigation, but advertising timelines at the outset could also be considered prejudicial where he may need to demonstrate, for employment law purposes, that he has investigated the issues thoroughly and with an open mind. But without an announced timeline, we might fear that the State Services Commission is simply kicking the can until Makhlouf is safely ensconced in Ireland.

All this extends the stench of Wellington unaccountability. Just how bad does a public sector Chief Executive’s performance have to be before accountability kicks in? And what does it say about employment law in New Zealand when it comes to the most privileged?

Update: there's now an ungated version up at the Initiative's website.

Around the budget traps

Budget lock-up on Thursday was fun. I didn't get to ask Minister Robertson whether he still had confidence in his Treasury Secretary, but it probably would have been rude to ask. 

A few bits from me on it over at the Spinoff, our Insights Newsletter, and over in the Stuff newspapers - I think it ran in both the Dom and the Press on Friday. They reversed the headline, but s'all good.

The end of my Dom piece:

Treasury often undertakes this kind of programme evaluation work, or at least assists in overseeing it. But Treasury's core economic and analytical capabilities have been seriously eroded under its secretary, Gabriel Makhlouf.

Treasury was awarded $5m a year over the next four years to "deliver core functions and the wellbeing approach". Rebuilding Treasury to be able to deliver the evaluation capabilities necessary for achieving Robertson's vision may be a bigger job than that.

It would have perhaps been the wrong day to ask the minister of finance whether he has any confidence in Treasury's capability to deliver. I have doubts.

Programme evaluation has always been the poor cousin to programme announcements. When voters too easily infer a government's depth of caring by the quantity of its spending, rather than the outcomes that spending achieves, that outcome is not surprising.

I hope the wellbeing approach yet proves to be something more than that. It may otherwise be difficult to distinguish from business as usual.

Oh Treasury ... again

Tom Pullar-Strecker goes through the more likely explanations of the inadvertent partial budget release. 

There is speculation Budget documents may have been "hacked" by someone simply guessing the website addresses of documents prepared by Treasury but which were not yet supposed to be visible on its website.

Treasury has been approached for comment on whether that is what may have occurred, or whether the alleged hack might have been more sophisticated.

Puller-Strecker's interviewed experts think Treasury screw-up the most likely explanation, with pages being indexed that shouldn't have been indexed.

Whether this was due to somebody putting up placeholder content using near-live budget documents in a test environment that was less test than they'd thought, or a screw-up in the CMS where embargoed content was cached by Silverstripe in ways accessible to crawlers* - the current plausible explanations are Treasury screw-up.

The screw-up would fall under the Director of Operations' remit. But the Director of Operations is only a few weeks into the job, having replaced Fiona Ross, who left in April to lead the Ministry of Justice's Family Violence And Sexual Violence unit. You may remember Fiona from Danyl McLaughlin's reporting on DEVUCA worlds. 

It's still possible this was a leak from elsewhere. But if this winds up being confirmed as Treasury screw-up, it would be difficult to blame a DDO who's only been in the job a couple of weeks. 

And I agree with Hamish Rutherford's piece here: if Treasury really thought that market-sensitive information had been hacked, the budget would already have been released early to avoid giving any hacker a time advantage. Plus, were someone keen on really hacking Treasury, I'm not sure that the budget would be the most interesting stuff to go after. Tendering, commercial contracts, debt issuance - there's a lot of stuff that they'd have in the back-end that would be rather more interesting than a soon-to-be-released budget unlikely to have much market consequence. 

* I understand this to be a known issue in Silverstripe in some government implementations, but I could not possibly explain it.

[Update - link fixed along with spelling of Pullar-Strecker -- Doh!]