Guest Post: The Sale of the Power Companies

Could it be a Blessing in Disguise?

Many commentators, including this blog, have chastised the government for selling half of its power companies despite strong opposition from the general public.

In the early nineties, I myself was involved in a (successful) campaign to prevent the sale of the Manapouri power scheme to Comalco. Our reasoning was that the old hydro systems were a licence to print money. This is because, in our wholesale market, the electricity price for all generation is determined not the lowest but by the highest bidder. As new and more expensive stations come on line, everybody else then just hikes their price up to that new level. This is called shadow pricing, also well established in the market for crude oil.

Here is my prediction: This very convenient business model will fall apart during the next decade. Solar electricity will become even cheaper than it is now, so that more of the electricity demand will be met by roof-top photovoltaics (PV). Once that happens, the big power stations will progressively be mothballed or relegated to stand-by. This in turn will cap the price of electricity because the most expensive generation is retired first.

Up to now, electricity supply is from limited resources where increased supply results in ever higher cost: one has to drill and dig deeper for fossil fuels. It even applies to hydro, where the limited resource, of course, is not the water but the sites where hydro stations can be built profitably. The progress of PV then turns the supply from being from a limited resource into a truly unlimited resource for the next fife billion years: solar radiation.

In other words: The factor governing prices will no longer be the rising cost of new power stations and their fuel but the falling cost of PV.

Another point: For now, it does not make sense to disconnect an existing dwelling from the grid and use batteries instead. Being independent from the grid makes sense only if a dwelling is new, and the cost of batteries can be offset by saving the cost of the power lines between the grid and the new dwelling. However, as batteries will get cheaper and last longer, this too will change. At some point the monthly cost of batteries (depreciation) will be no more than the lines charge. At that point all hell will break loose. People will disconnect themselves from the grid in droves, which makes the supply charge rise for the remaining fewer customers, thereby accelerating the process even more. At the same time it will deprive the power companies of their last weapon against PV: the low credit for power fed into the grid during daytime.

Once the above events happen, the earnings and values of the power companies will deteriorate. In that view, one might have wished the government had sold not only half but all of the shares, and preferably to the Aussies.

Peter Kammler

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About righteous little ‘Pricks’ and righteous big ‘Pricks’

Thank God that she made New Zealand small and economically insignificant. Therefore our Prime Minister responsible for our economic direction is only a righteous little Prick.
Remember some time back when John Key rubbished and demonised the Greens’ Russell Norman’s suggestion – to put it bluntly – print money instead of borrowing it from the banks as being cheaper and better for the struggling economy. In modern speak is is called quantitative easing. Everybody has been doing it, the US, UK, EU and all other leading economies sometimes dragged into it screaming. Even Switzerland not known for economic adventurism a couple of years back threatened to print as many franks as it would take to stop currency speculation hurting their economy. It did stop overnight with some speculators ending up with bloody noses.
Here however John Key killed any rational debate by just name calling Dr. Norman and the Greens as irresponsible economic lunatics. Who is the righteous little Prick then who knows better then the (mainstream) rest of the world.

The big contexts is of course austerity with New Zealand’s obsession with balancing the books at a time when the economy actually needed more spending. Thank God for the Christchurch earthquake where spending by the EQC and insurance companies carried us over the damage the government policy was doing to our fragile economy.

The damage of economic righteousness  is now becoming more and more apparent when you have a righteous big Prick, in this case Germany, doing the damage. As the Huffington Post on 13 October headlines: Germany’s Austerity Obsession Could Take Down The Global Economy. Lately it was mostly the Southern European countries suffering under German righteousness. However austerity fever — egged on by a now-discredited research report that claimed government debt is bad for economies — has been hurting economies around the world since the Great Recession.

When is New Zealand waking up to the fact that this government did and does a lot of damage. Instead we still hail the the little Prick as the great helmsman who steered us successfully through the troubled waters of the global economy.

We said our piece. Now go back to sleep again New Zealand.


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One law for all – New Zealanders fighting in foreign wars

New Zealand’s Prime Minister has been swept up in the world wide media storm after the beheading of three Western hostages by ISIS in Syria. What a PR coup for the murderers. Being horrified by the video footage we have forgotten about 3000 Palestinians (mostly women and children) killed in Gaza or 300000 Syrians (mostly civilians) killed in their civil war. Instead of keeping cool heads in this serious situation it looks like the government is following the great example of Australia’s Tony Abbot by shooting from the hip.

If the Prime Minister is really considering a hard-line change similar to Australia’s to detain those suspected of heading off to fight overseas and deal with those returning, as reported in the NZ Herald,  we are all for it. However we would of course expect it to be one law for all. We can’t wait to see our SAS troops heading for war in the Middle East being arrested at Auckland airport.
If we only have had a law like that 100 years ago. Thousands of young New Zealanders would not have been killed or wounded in a senseless foreign war and/or come back thoroughly terrorised and brutalised.
How wonderful that would have been and still would be today.

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Nicky Hager Raid: It doesn’t smell – it stinks

The media reaction to the police raid on Nicky Hager’s house was predictable. See for instance the NZ Herald editorial on Friday 10 October. It is too close to home for them as well and they are right to be scared. This goes at least for the media, who take their jobs seriously and are not just cheerleaders for this National government.
We have to say that the police acted with a warrant issued by a judge and therefore the legality of their action cannot be questioned at this stage. However there doesn’t seem to be one and the same law for all.

If you break into a Labour Party computer and access confidential data and even boast about it to your political friends that seems to be ok with the police. No discernible action taken. Wouldn’t it be nice to have Mr Slater’s computer and other gadgets taken from him – and he is not just a witness but a perpetrator – to give us a break from his Hate Blog. There would even be a good chance that the police would find the evidence they would be looking for as Mr Slater proved to be stupid and lax with his precautions.

On the other hand Nicky Hager is not stupid and one would be very surprised if the police would find anything to identify the offender they are looking for. However they will find heaps of stuff any self-respecting journalist wouldn’t want anybody to see the least the government.

The timing is also revealing as one of the first acts of the new government after the election because it cannot be described otherwise. How else can a reasonable observer explain the difference between the police action and in-action other than being political. The police know who their masters are and don’t even need to be told.

And here is the thing. New Zealand once prided itself as not being corrupt where police acted at arms length without political influence. These times are truly gone. The police seem to make a habit of doing political favours to their masters especially concerning incidents around election time. Remember the persecution of the hapless cameraman unintentionally leaving his microphone in a very public place where Mr Key and the convicted fraudster Mr Banks had tea.

The only results so far have not been legal victories for the police but more or less successful intimidation not just of the victims of their actions but everyone critical of the government. That seems to be the (only) intention.

We are looking at corruption when we see that the government puts their cronies in charge of security services and then uses them for their own political benefit (like expediently dealing with Official Information Act requests). And now the police.

The real scary part is that the government is now using the old chestnut of “terrorism” to ever increase the police and security services powers to control its own people. Does anybody remember the “terrorism” of 1933 – the burning of the Reichstag/Parliament building in Berlin – and what happened next ?

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Open letter to Gareth Morgan re Green Party

Dear Gareth Morgan
We have followed your contributions to public discussion since the crazy days past 1984 when you were one true blue apostle of Roger Douglas’ neoliberal/neoconservative revolution. Then you seemed to have had sort of an epiphany during your motorbike rides across the globe. We detected some enlightened views when you crossed from Latin America to the USA from abject poverty to abundance. Then you seem to have spend some of your windfall on worthy causes like the Wellington Phoenix and environmental issues. However we now have to realise that deep down you have not changed that much from the economist of old.

On your blog of 23 September ‘Time for a Bluegreen Party‘ you as you later said slagged off the Green Party (1 October ‘Open Letter to Green Party Supporters: Why I slagged off your Party‘). You don’t seem to realise that in you own argument you contradicted your conclusion. How could the Greens possibly turn blue if (in your own words) “National threatens to propel NZ even further toward environmentally-degrading economic growth rather than the ideal of strong economic growth in harmony with environmental protection” or “National’s is more a green wash than a serious commitment to clever and clean growth.”
In reality the differences between National and the Green Party are not that much on environmental but on economic and for that matter social policies.
Here you show your true colours with the old chestnut of “the Green Party a real melon to mainstream New Zealand – a watermelon to be precise, far too red on the inside for middle New Zealand to stomach.” And the old tactic of name calling “rehashed socialism“( BooHoo, reds under the bed) instead of entering into an intelligent rational discussion and finding actual fault in the Green’s policies. This is disappointing as we expect better of you.
We remind you that New Zealand had a blue-green Party before  called “Progressive Greens” contesting the 1996 elections getting 0.26 % of the vote. Their protagonist are still here as the National Party’s Bluegreens Advisory Group, which according to you “quickly cowers to the priorities of short-term unsustainable growth.”
Have you got any better suggestions how for instance to tackle the according to the Secretary of the UN defining issue of our time Climate Change other then voting for the Green Party.

With kind regards
Dr. Hans B. Grueber

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Capitalism vs Nature, can there be a fair contest ?

In Saturday’s Herald John Roughan looking at the planned reform of the Resource Management Act suggests that there can be a fair contest between the economy and the environment (read more). He refers to decisions about a tunnel and monorail in Fiordland, which were turned down. This however does not give us any comfort as there were not contests between the economy and the environment because these proposals didn’t even make economic sense.
Gary Taylor as quoted is right when he says “economic and environmental matters would compete for primacy. We all know what they would mean for the environment.” We only have to reframe it to match the reality of the contest into Capitalism vs Nature to predict the dire results.
However it is only the old paradigm which turns it into a contest. It is not one or the other. There is (in the long run) no economy without or even against nature. One is based on the other. The sooner we get this into our heads the better for both.

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Should Labour turn to the right ?

After a crushing election defeat the Labour Party is  looking to solve its leadership problems. However more importantly it should be and hopefully will be looking at its policy direction.
Some say it should lurch back to the right while others like columnist Dita de Boni in the NZ Herald say : Instead of trying to appeal to ‘middle New Zealand’, the party should stand by progressive values. Read full article here
Some central questions need to be answered like :
What if any progressive values are left within Labour since the 1984 Rogernomics experiment ?
What is the party’s purpose in politics anyway, to stick to and promote its core values or to gain power at any cost ?
Let us assume that the answers are no core values left worth fighting for or even worse that the purpose in politics is just to win power the result would be dire for our democracy. If this would be true for mainstream political parties we would be left with everyone aiming for the elusive ‘middle ground’ and the voter left with no other choice than the same milk either in a bottle or a carton.
Thanks to MMP we have a choice to vote for principled parties like the Greens without wasting our vote. Low fat milk in a green bottle.

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NZ Election Results – Why ?

New Zealand or rather New Zealanders who bothered to vote in the last election voted over 60% for right wing parties.
Among the many reasons like popularity of the incumbent PM, better resources, strategy, polling, spin of the ruling party, media bias, detractions etc two main reasons really stand out.
1.   As so often the “Left” was divided and fighting each other over policies within the main opposition party and between the parties, which wanted to change the government. The “Right” on the other hand did not let policies get into the way to keep the eye on the ball, which is power. They had helped each other into safe seats and had the post-election deals already nicely sawn up.
2.   The children of Ronald Reagan, Margret Thatcher and Roger Douglas are now coming home to vote. Everyone under 50 lived through his formative years under the neo-liberal / conservative ideology, which has become the new orthodoxy. Traditional values like support for or even empathy with the poor, co-operation for the common good, solidarity with your fellow men have been replaced by everybody for himself and “greed is good”.

Why is anybody surprised by the election results ?

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John Key’s little Henchman

Saturdays NZ Herald editorial (Read full article) made us speechless. It put totally different “crimes” in the same extradition pot. Cairns charged with perjury in the UK is called “brave” for going back to London to face the charges as if he had any choice. In the other category Kim Dotcom finds himself lumped together with a peadophile priest who is also fighting extradition.
The editor obviously does not or does not want to understand a few fundamental differences between these cases, which make the call for Dotcom to do the “honourable thing in law” quite ridiculous.
Let me tell you as a former lawyer that there is no such thing as “honourable in law”. It is either legal or not.
The main point however is that perjury and sexual offending are long established serious crimes and the UK and Australia have a non-political judiciary and the principle of fair trial.
In Dotcom’s case copyright violation is not even an extraditable offence and the US prosecutors had to tag on the spurious charge of money laundering to get extradition proceedings going. You thought and had legal advice that you had a legitimate business and invested its profits. Years later after unprecedented criminal proceedings – normally these cases are dealt with in civil law suits – you find that your business model broke copyright law and all of a sudden you also committed money laundering rules by investing the profits.
Secondly from the day of the raid on his mansion it has become clear that in the US Dotcom cannot expect a fair trial by an independent non-political judiciary. Unlike Mr Cairns Dotcom would not get bail in the US and the means to defend himself. He would simmer in jail on a thin mattress till he is done and accepts a plea-bargain. That is what is called justice in the US. If Dotcom would be my client I would also advise to take his chance with the NZ justice system rather than the US.

The Herald editorial is just another extension of government spin to malign a NZ resident now called “a guest” who invites “the likes” of Assange, Snowdon and Greenwald for voting advise. We followed their appearances closely and did not get any voting advice just journalists, lawyers and a whistleblower telling us things our government doesn’t want us to know.

Who is John Key’s little henchman in the Herald’s editorial office then?

Something spotted in Facebook:
“In the last week of the NZ election campaign 40 armed police and 2 helicopters descended on John Key’s mansion on behalf of an US rapper for copyright infringement”

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Welcome all

It has been 15 years since our last cyber presence with our web-site
Economic Myth Busters”. Reading the editorial after all that time it looks like it could have been written yesterday.
Inequality was a major issue during the recent election campaign even if “in the end” (JK) New Zealand voted for the status quo.
The only thing, which seems to have changed is the technology. We hope that you still manage to view the old web-site. The word “blog” was not even invented.
We hope that you will follow and comment on the sequel. We will try to not only make it relevant but also entertaining. Our own thoughts will be complimented with links to other articles and comments we like.
Have fun and we hope to hear from you.


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