The NZ Initiative's Exec Director Insults DownToEarth Kiwi. So can the PM now come clean and tell the Media how often he's talked with the Initiative?

Today Professor Nathan Berg from Otago University Economics Department wrote to say, "Hi Robert, I’ve become an adoring fan of your work! .. You’ve put new ideas in your readers’ minds & made observations that others (myself included) have lacked courage to write or say (very audibly) out loud .. Your content is that good & of singular importance in the topics you are taking on. Please know how satisfying & hopefully emboldening it is to read your DowntoEarth.Kiwi posts, Best Nathan". Another avid reader is Professor Peter Phillips, who for over a decade was the highest ranked economist in the world. He's back in NZ from Yale University where he used to work, and told me the Blog was great. However our fans don't extend to the NZ Initiative (whose former staffer, Matt Burgess, is the PM's Chief Economic Adviser). How do we know? Because also today, the Initiative's Executive Director Oliver Hartwich wrote to me insulting the Blog, saying, "I look forward to seeing this email appear on your blog, perhaps .. alongside that detailed analysis of your work that's been circulating? You know, the one documenting your factual inconsistencies, ad hominem attacks and unbacked claims with actual citations .. You may wonder why so few people listen to you. It might have something to do with the way you communicate. Just a thought". So lets grant Hartwich his wish and post his mail (like we did awhile ago when the Hon. David Parker wrote to us):

Dear Robert,

I've been following your posts about the Initiative with increasing fascination. What a remarkable talent you have for transforming mundane policy disagreements into epic battles between virtuous crusaders and nefarious monopolists!

Your latest email was particularly entertaining. The revelation that "the original founders of the roundtable cant (sic!) stand you anymore" was quite the bombshell. I wasn't aware you were the designated spokesperson for these individuals – what an honour that must be! Though I must wonder how you communicate with many of them, given that they're deceased. Perhaps you've discovered some metaphysical channels the rest of us lack?

I must say, if we're truly the government's "Chief (Informal) Economic Adviser" as you claim, you'd think they would have taken our fiscal policy suggestions by now, but we can always hope. I particularly enjoyed your creative portrayal of me as the Initiative's "Executive Chair" (I'm the Executive Director, but why let basic facts interfere with a good narrative?), and your assertion that I'm not qualified in economics. My law PhD with a focus on competition law and economics, not to mention my master's in economics, must have been a fever dream!

Your ability to misrepresent even the simplest details is truly remarkable – a special talent that sets your blog apart from those tedious fact-checkers who obsess over accuracy.

Your analysis of the Foodstuffs merger was especially delightful. While I openly disclosed Foodstuffs North Island's [NZ Initiative] membership and offered a Hayekian perspective on markets as dynamic discovery processes, you brilliantly reduced my entire argument to "crying tears for the grocery duopoly." I suggested that a merged Foodstuffs might achieve efficiencies benefiting consumers through better products or lower prices, and questioned whether regulators can predict market outcomes with certainty given Hayek's "knowledge problem." But why engage with those economic concepts when sweeping moral condemnation is so much more satisfying?

And your treatment of bank capital requirements? Masterful! Taking [NZ Initiative Chairman's] Roger Partridge's careful analysis of optimal capital levels and transforming it into a cartoonish "pro-bank, anti-consumer" stance shows real creative flair. The way you deployed a single quote from John Cochrane's 2011 Wall Street Journal op-ed while ignoring the entire context of New Zealand's banking system demonstrates a commitment to selective sourcing that most propagandists would envy. Perhaps you missed the many other elements of bank capital rules in NZ that Partridge discussed – though I suppose Cochrane didn't mention those in his op-ed from 14 years ago.

I must also applaud your ability to portray our stance on the Fair Digital News Bargaining law as "not wanting to protect the property rights" of journalists, conveniently omitting the catastrophic results when Canada implemented similar legislation. The fact that Facebook banned all news content and traffic to Canadian news sites plummeted is clearly irrelevant to your narrative of evil tech giants versus virtuous local media.

Do keep writing these posts, though. They provide much-needed entertainment around the office. We've taken to reading them aloud during morning tea, right after our daily ritual of collecting "big fat membership fees" from our supposed monopolist puppet masters.

With amused regards, 

Oliver

P.S. I look forward to seeing this email appear on your blog. Perhaps you could publish it alongside that detailed analysis of your work that's been circulating? You know, the one documenting your factual inconsistencies, ad hominem attacks and unbacked claims with actual citations.

P.P.S. You may wonder why so few people listen to you. It might have something to do with the way you communicate. Just a thought.

P.P.P.S. May I suggest installing a spellchecker? It might help with those troublesome apostrophes in words like "can't" and "doesn't" that seem to have gone missing in your email.

Is Productivity Low in NZ not because of the Government but because our Big Business CEO's and Corporate Boards are so Utterly Useless?

On 24 February 2020, the day before the pandemic blew up across the globe, the NZX 50 index of our stock market, being the companies with the largest share market capitalization, was 12,073. Over five years later, it sits at almost the same level, at 12,350. That amounts to a rise of 0.15% per annum - next to nothing - and after adjusting for inflation, a huge drop. Meanwhile the Dow Jones of America's Biggest Stocks is up around 70%. So it turns out that NZ Big Business Incorporated, after being handed $20 billion of taxpayer money during the pandemic years - and in the case of Air NZ having your entire business underwritten by the government - not to mention having huge monopoly and oligopoly powers - can't make a buck. The question is: could it be our private sector - though not small & medium business owners - and not government employees - but instead the Big NZX 50 companies - is being run by people who are so incompetently useless they can't make a buck even when they have no competition? By contrast, could it be that the only reason NZ is continuing to scrape along is that our teachers, nurses, doctors, social service workers - these folks are rolling up their sleeves and delivering incredible services every day. They have to physically go into work. So could it be the real drag on NZ is the "top" private sector managers, the CEOs and the useless company boardrooms who are (pretending) to work from home. Many of them, by the way, are Members of the NZ Initiative, which has become the Prime Minister and Finance Minister's Chief (Informal) Economic Adviser.

Want some proof? Of the 20 biggest companies in NZ, lets take a look at how their share price has performed these past five years since the start of the pandemic in February 2020:

= Ryman Healthcare's share price is down 80%. An achievement in the booming aged-care industry.

= Auckland Airport share price is down around 8%. An achievement for a monopoly provider.

= Spark is down over 50%. Its part of an oligopoly, with few major competitors.

= Fletcher Building is down nearly 60%. Its close to being a monopoly in several of its "markets".

= Goodman Property Trust is down nearly 20%.

= Air NZ, which has a monopoly on domestic routes, is down over 60%.

= A2 Milk's share price is down nearly 50%.

These seven firms make up over one third of the 20 biggest stocks in NZ by share market capitalization, and most of them have all-but-collapsed. I do not know a single other country where monopolies are run at a loss. The question is: does the source of NZ's malaise lay in the quality of the people running these kinds of large private sector companies, even though these very same people blame the government for our problems?