Thursday 28 May 2020

Afternoon roundup

A much belated closing of the browser tabs brings some worthies:
  • Kiwibuild never made sense. If it were needed, it couldn't work because the same things that block private development would block Kiwibuild. And if it could work, it wasn't needed. The government tried anyway, sticking bloodymindedly to a stupid election promise dreamed up on the back of a napkin in a taxi as the legend has it. And it continues to be a disaster. I hate to say I told you so, but ...

  • Kiwiblog links to Adam Creighton at The Australian on NZ's economic problems. Creighton's been on the crankier side when it comes to matters Covid, but he's not wrong on the economic worries here. Notable is that he has Graham Scott on record raising concerns as well; he's former Treasury Secretary and recently retired from the Productivity Commission. 

  • Nouriel Roubini is more grim than usual:
    What I have argued this time around is that in the short run, this is both a supply shock and a demand shock. And, of course, in the short run, if you want to avoid a depression, you need to do monetary and fiscal stimulus. What I’m saying is that once you run a budget deficit of not 3, not 5, not 8, but 15 or 20 percent of GDP — and you’re going to fully monetize it (because that’s what the Fed has been doing) — you still won’t have inflation in the short run, not this year or next year, because you have slack in goods markets, slack in labor markets, slack in commodities markets, etc. But there will be inflation in the post-coronavirus world. This is because we’re going to see two big negative supply shocks. For the last decade, prices have been constrained by two positive supply shocks — globalization and technology. Well, globalization is going to become deglobalization thanks to decoupling, protectionism, fragmentation, and so on. So that’s going to be a negative supply shock. And technology is not going to be the same as before. The 5G of Erickson and Nokia costs 30 percent more than the one of Huawei, and is 20 percent less productive. So to install non-Chinese 5G networks, we’re going to pay 50 percent more. So technology is going to gradually become a negative supply shock. So you have two major forces that had been exerting downward pressure on prices moving in the opposite direction, and you have a massive monetization of fiscal deficits. Remember the 1970s? You had two negative supply shocks — ’73 and ’79, the Yom Kippur War and the Iranian Revolution. What did you get? Stagflation.

  • If you haven't sorted out a VPN yet, you might want to. Tracy Martin wants to be the boss of what you get to see on the internet: content filters that always risk misclassifying content and creeping to cover more and more stuff. Just VPN around the stupidity.

  • The Shane Jones problems in forestry continue: his musings about nationalising the industry (go ahead and call it something else if you want, but setting something up where Shane Jones gets to decide which logs get sold to whom and at what prices...) have stopped the expansion of a pulp and timber plant in Tangiwai. BusinessDesk has the details (you should subscribe).
    "Submitter after submitter have told the committee the consultation on the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill has been farcical and its rushed implementation under Budget urgency an abuse of process.

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