Five box-tops, four bottle-bottoms

26/07/2013 § Leave a comment

I received a solicitation by email the other day. No, not that kind — goodness, this is a family show. It was an invitation from the International Centre for Parliamentary Studies to do a course for a Professional Certificate in Foundations of Economic Development.

So who are these people?

The International Centre for Parliamentary Studies is a research institution of the United Nations Public Administration Network (UNPAN), and also works in partnership with the United Nations Development Programme (UNDP) and the Association of European Election Officials (ACEEEO).

Apparently, an official, above-board sort of place. And what are they offering?

Examine the myriad of issues which determine prospects for economic development and develop comprehensive and effective plans for the delivery of measurable economic improvements to citizens’ lives.

Complex economic systems, including micro-entrepreneurs and shadow economies, require management and leadership with clarity and cohesion, encompassing understandings of multisectoral linkages, sector planning and development strategies. Participants will work with leading specialists to analyse this broad range of issues and develop their understanding and construction of holistic conceptions of the theory, policy and practice of promoting economic development.

Wow — sounds cool! Lots of interesting material, grappling with the complexities of modern mixed economies, ‘leading specialists’. How long will it take me to acquire this complex understanding?

Monday 2nd – Friday 6th December 2013

Yeah, that’s right, you can be an expert in one week. Sigh.

Here’s my bias. I’ve been studying and researching economic development in various forms for coughtwentyfiveyearscough. It’s still a mystery to me. We kind of understand it, and we know what some of the big drivers are, and we have some idea of what not to do. But new ideas come up, and things don’t happen the way you think they should, and whaddaya-know the economy changes over time. If anything should give us economists some humility, it’s New Zealand’s experience. Yeah, sure, tyranny of distance blah blah lack of scale yadda yadda. But in terms of the things we can influence — policy settings and economic incentives — New Zealand does pretty well. And yet, it just doesn’t quite perform.

But some poncy bureaucrats are going to attend this course and suddenly believe they are Professionals (!!) in Economic Development. Then they are going to take the half-remembered version of the summary of the synopsis and inflict it on some unsuspecting jurisdiction. By the time it doesn’t work, they will have moved on to the next job requiring a Professional Certificate in Acquiring Professional Certification.

So, everyone, join in: ‘It takes five box-tops, four bottle-bottoms, three coupons,….’

Bleg — economics tutor

09/04/2013 § 2 Comments

I’ve been approached by a dad wanting an economics tutor for a Year 13 student in Wellington. Anyone interested? Suggestions?

Opting out — an update

16/08/2012 § Leave a comment

If you’ve been following our Christchurch earthquakes saga, you’ll know that we opted out of the Fletcher programme for our repairs.

We enlisted the help of a builder for managing the opt-out and liaising with EQC. One of the key selling points for us was that this company could plan around when our property is vacant. As accidental slumlords, we were keen not to annoy our tenants any more than necessary. Plus, there are some uncertain legal issues about responsibility for condition of the property and providing alternative accommodation. Not stuff I want to deal with.

Our builder reviewed the EQC documents and checked out the property. What with this and that (y’know, the thousands of aftershocks), there are a few extra bits to add to the list of repairs. I will note that the builder also removed at least one piece of work. In addition, the builder very sensibly wants to look at our concrete slab. This was an issue I raised earlier with EQC and Cera. Cera has deemed our land A-OK as long as the concrete slab is done right; EQC has refused to check out the slab. So…who’s now liable if the slab isn’t alright? Inquiring minds want to know.

The current tenancy is coming to an end. We lined up the builder to check things out. They did, and submitted the required paperwork to EQC.

Turns out, EQC had changed the process.

So, the builder had to make a new submission under the new process. Now, the date attached to the submission is the new date, not the original date. So, EQC is working to the new date, which gives them more time to evaluate the submission and respond. They haven’t given an indication of when they will get back to us or what their ruling might be on the additional damage.

Meanwhile, the tenancy is running out. We had organised a 6-week window between the current tenants and a new possible tenant. We have to make a call — find a new tenant ASAP who can move in earlier, or wait for EQC approval and risk losing 6 weeks of rent and no repairs to show for it.

Meanwhile, too, the builder has the workers and subcontractors lined up, ready to go in two weeks. If our work falls through, they’ll have to reorganise the work schedules. I don’t know what it means for their business, but it can’t be good for the stress levels.

That’s the story so far — lots of jaw-jaw but no fix-fix. Might have to wait another year for that.

Bus complaint

08/08/2012 § 6 Comments

Here’s the complaint I’ve sent to the Commerce Commission:

Dear sir or madam:

I would like to ask you to investigate GO Wellington and its owner Infratil for violation of the Fair Trading Act.

The specific violation I witnessed was the following:

  • On 7 August 2012, I arrived at Lambton Quay, North End, Stop F at 4.15 pm.
  • At 4.17 pm, a No. 3 bus did not arrive, although it was advertised.
  • At 4.22 pm, a No. 3 bus did not arrive, although it was advertised.
  • At 4.26 pm, a No. 3 bus did finally arrive, as advertised.

This is not an isolated event. Many times, I have observed that a No. 3 bus has not arrived as advertised. Sometimes, I have observed a bus not allowing passengers to board, presumably because the buses were too full.

I contend that a bus stop represents an offer to provide services, and a timetable posted on the bus stop represents further details of the services offered. GO Wellington has represented that it would offer a No. 3 bus from Lambton Quay to Karori at the specified times, and then neglected to provide the services when potential customers arrived to purchase the services. I believe these actions constitute failure to provide advertised services and misrepresentation of the services on offer. They are therefore a violation of the Fair Trading Act.

I ask that you investigate these actions; that you determine how widespread the violations are; and that you provide remedies for the affected citizens of Wellington.

Kind regards,

Yes, I am aware that this makes me sound like a crazy old man ranting incoherently on the corner. I’m also really annoyed with the random bus generator that seems to be the basis for the Wellington system.

We’ve opted out — wish us luck!

20/07/2012 § 2 Comments

We decided to go to the opt-out route for our quake-damaged Christchurch house. Each event caused in the region of $10,000 to $50,000, which put us in the $10,000 to $100,000 bracket. The total may come to more that $100,000, but because it’s spread over multiple events, we were still in the Fletcher programme.

I’m quite wary of the EQC assessments. It really comes down to two instances with them. The first instance came after the September earthquake. The team of two assessors examined our property. One assessor noted the hairline crack in the roughcast on the brick chimney and said it needed further assessment. The other said, ‘She’ll be right.’ Well, February came around and she wasn’t right. No, the chimney crashed through the roof and came to rest on the ceiling of the lounge, right above the tenant.

The other instance also happened at the assessment for the September quake. They used a laser level to see whether the concrete slab had moved. If it was out more than 10mm, then it was considered a problem. The first measurement indicated that it was, in fact, out by 10mm-11mm. They rechecked it and, mirabile dictu, it was fine. Since I don’t happen to have my own laser level, I couldn’t verify any of this. It just reminded me of a casino: the house — EQC — always won.

Then, there have been the rule changes. This isn’t an insurance contract, in which the terms are set at the time of the event. EQC keeps changing the rules and they don’t even necessarily tell you. We had a devil of a time being reimbursed for getting the chimney removed. We figured it wouldn’t be a problem, because the removal cost less than the $10,000 cap for emergency work. It turned out that they reduced the cap to $2,000 between September and February, but didn’t make it widely known. So what would have been a simple reimbursement turned into months of proving that, yes, a chimney crushing a collapsed roof does rather constitute an emergency.

The latest rule change to verify that the house always wins is also about reimbursements. From the start, you’ve been able to opt out of the Fletcher programme. If you were in our damage bracket, you could wait in line for Fletcher or get another contractor. EQC would then pay the contractor. Now, the new rule is that EQC won’t release any money until the work is done. Then, they will reimburse you off the contractor’s invoices. That is, you now need a cash float of up to $100,000 (or more) if you don’t want to use Fletcher.

Mostly, it looks like a way to keep people in the Fletcher programme. Were too many people opting out?

Perhaps they were, and for good reason. We had already lowered our expectations after the stories we’ve heard of slap-dash repair work. Then, we heard that the rates for painters have been lowered. The explanation sounds good — rates were above market rates, and we can’t let the painters gouge the government. But — news flash — there was a catastrophe. Prices for lots of things are above normal market rates. Is it any wonder that just when demand increases, so does the price? We’ve heard from several people that the quality of painting wasn’t great. This should drive it down even further.

The other problem concerns rental properties. Fletcher just tells you when your number comes up, and you have three days to three weeks to clear out. Apparently, landlords may be on the hook for finding alternative accommodation for tenants. There were also some other legal issues listed in a long letter we received.

At least one contractor sees this as an opportunity. We were referred to one who is working with landlords and timing repairs around the rental contracts and vacancies. It may ending up costing a little more, but the Fletcher option was also going to have hidden costs. Of course, the new reimbursement rules are making it harder, but we are working through those issues.

The next step is verifying the scope of work. That should happen over the next week. Then, hopefully, they can start work in a few weeks and the house will be repaired by the end of September. I’ll let you know how it goes.

*Other people wrestling with these issues and writing about it are Eric CramptonIslay McLeod, and folks in Avonside.

Bloggers all the way down

27/06/2012 § 1 Comment

Posting will be light this week. We shifted house yesterday, and the NZAE conference is Wednesday through Friday. Ironically, I won’t be blogging so I can be on a blogger panel. Also appearing: Eric Crampton, Sam Richardson, Seamus Hogan, Matt Nolan, and James Zuccollo.

We were also originally going to use the work on the impacts of economics blogging by Berk Ozler as a bit of a touchstone — not sure where that idea has gone.

Anyway, we should all end up blogging about blogging about….

French management – quel bordel!

24/11/2011 § Leave a comment

Poor New Zealand gets compared to every other place. We should be more like Ireland, with its tax breaks and thriving economy and, oops, nevermind. We should be more like Australia, with the high wages and, oh, traffic and deadly native fauna. Sometimes, France is held up as the place to be. Healthy attitudes toward alcohol, 35-hour work weeks, high-tech without the high stress.

It turns out that they have some of the same issues we do. Well, not exactly the same. The Economist reports that French management is notably weak and holding the country back:

In fact studies suggest that the problem with French employees is less that they are work-shy, than that they are poorly managed. According to a report on national competitiveness by the World Economic Forum, the French rank and file has a much stronger work ethic than American, British or Dutch employees. They find great satisfaction in their work, but register profound discontent with the way their firms are run.

Having read Bonjour Paresse, I’m not ready to believe in this rank-and-file ‘work satisfaction’. (Note: Corinne Maier, the author, is billed as an economist. Could she be a keynote speaker for the economists’ conference?) However, the idea that management is weak suggests that there are efficiency gains to be made.

The same has been said for New Zealand. A report to MED earlier this year found that our management is holding the country back (nor is this the first report with such findings).

The findings suggest that while some of New Zealand’s firms are as good as any in the world, there is a substantial ‘tail’ of firms that are mediocre, especially in their approach to people management.

However, French and New Zealand firms are weak in their own ways. The Economist’s article reports that French firms tend to be rigid and hierarchical. They don’t promote cooperation between management and employees and don’t empower their workers. The kaizen craze has passed them by; the notion that firms can harness employees’ initiative and creativity is literally foreign. New Zealand firms, on the other hand, seem to suffer from too little organisation:

for manufacturing firms in New Zealand a certain optimal degree of hierarchy is necessary for the organization and management of operations….

So what do we do? Well, the report to MED doesn’t give us the specifics. We need ‘more’ and ‘better’ management, but I’m not sure what that looks like. Maybe we could start an exchange programme with French multinationals, and both countries can learn from each other. Instead of ‘vive la difference’, it may be a case of ‘vive la moyenne!’

Welfare reform: $20 bills on the footpath

02/11/2011 § Leave a comment

I could spend all day discussing welfare reform. Unemployment, poverty, and illness are very complicated. I spent a year working in a welfare-to-work programme in California. Each person had a mess of issues that seemed to overdetermine their poverty and unemployment. It was never as simple as just finding a job.

What makes the discussion even more difficult is that people’s responses come from their core values. That’s the whole debate over the ‘deserving poor’ — what should people do for themselves, and what should the consequences be? The debate over how to support children is similar. How much are children the responsibility of their parents, and how much does society have a separate stake in their development?

As I said, I could be here all day. So, I just want to make three simple observations.

First, Paula Bennett’s press release from yesterday had this quote as paragraph two:

“It’s not socially or financially sustainable to continue to spend eight billion dollars a year to pay benefits to 12 per cent of working age New Zealanders.”

Why not? It’s an interesting assertion, but I’m sure I could develop a macro model that sustainably allocates 4% of GDP to supporting unemployed and sick people. The assertion is not a solid basis for policy.

Secondly, we should think about welfare systemically. For example, we could spend more on child health and education if we wanted to, but we have decided that it isn’t worth the investment. As a result, some children are not as healthy and educated as they might be. They become adults who aren’t as employable as they might be. Unemployment benefits are, in part, the price we pay for spending less on health and education. This may be an efficient outcome: it may be cheaper to pay unemployment benefits for x% of the working-age population than to increase other spending by y%. But we have made choices and we need to live with the consequences. And yes, I am aware of the irony of saying that in the context of welfare reform.

Thirdly, the policy screams $20 bills lying on the footpath. They plan to spend $520 million ($130 p.a. times four years) to reap $1,000 million over four years. They expect to double their money from this initative. So…why hasn’t someone already picked up all this free money lying around?

Now open in new location!

27/10/2011 § Leave a comment

I was contributing to the New Zealand Association of Economists blog, but it’s probably time I struck out on my own. I’m still working on what it is I have to say. It’s partly a question of finding a ‘voice’, but also a question of finding an on-line persona.

Anyway, howdy! Please bear with the mess while we sort out our new location.

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