A Tale of Two Scrapers

A follow-up piece - how Did I manage to Break a Scraper in Half?

First up, I was working for the Copulating Spiders - the ol' MoW insignia. The gear was probably 20+ years old (in 1972-3), and instead of a proper Cat tow-pin between dozer and scraper, MoW being the cheapskates they always were, had thoughtfully supplied a shortened piece of truck axle. Didn't quite fit the hole - rattled around a bit.

A fully loaded scraper could hold around 15-20 cubic metres of spoil (roughly a 3x3 floor pan, and could be crowded in good stiff clay to 3+ metres high) so I guess total weight could run 35-45 tons all up. Two winches needed for the two cables: one for blade height, one for apron trim and material eject/spread.

The usual round (this was topsoil stripping, to a temporary heap) was run the dozer in high gear to the pickup, change (on the fly, yes, possible) to low, drop the blade into the material, let the material crowd (if it would) until it spilled over, raise the pan to travel position, crawl back to the heap and up it, wind the dump winch which first raised up the front apron and let the material out, and then pushed the whole rear wall of the scraper forward, ejecting all material. Bring 'er back to travel mode, high gear, off the heap, wash, rinse, repeat. 50-100 times per day - an average round was perhaps 3-5 minutes.

Working this gear gets quite repetitive, so the old mind tended to wander.

So it was, coming off the heap in high gear, with quite some surprise that I was awakened from my reverie to hear both winches screaming their heads off. Turned around to ascertain the cause.

Oh dear.

The tow-pin had sheared. The scraper was in two pieces, quite a few metres back from the accustomed position. The cables were running out against the brakes, hence the screams.

The scraper, empty but running down a 20-degree slope, had promptly dug in the towbar to the ruffled surface of Gaia, run clean over it tilting it around 180 degrees so it ended up facing backwards, and comprehensively foobarred the ball joint that joined the front set of wheels plus towbar, to the rest of the scraper. Not a good look. A two-piece scraper.

What to do?

Uncouple the cables from the winches (hammer and wedge), run back for the dozer blade and hook it on, string its cable onto one winch, and proceed to move the pieces out of the way of the heap.

Then confess all to the bosses, but point out that a Real Caterpillar Towpin would be henceforth a Good Idea.

We ended up (days later, this was Gummint work, y'unnerstand) going way out to the backblocks of Fortrose, and bringing back another even more ancient scraper, with which I (lopsidedly - darn thing had two different sized tyres on the back, which controls cutting attitude) completed the earthworks.

With (what joy!) a Real Caterpillar Towpin which appeared, along with the immortal words 'Let's see if you can manage to f... This one Too!'

Ancient History ( a slice of a younger , machine-operator Waymad)

The context is that common taters aver that a residential subdivision needs a lotta Plannin'.

Maybe.....

A much younger Waymad built the rough levels in a section of an entire subdivision (Newfield - the hilly bit, Invercargill) with a Cat D7 and a cable scraper (which I broke in half, but that's a story for another day.) Yes, there were Plans - and a few sticks in the ground, and the occasional surveyor with a dumpy, but nothing a tech drawing refugee from the local Technical College could not handle. Strip the topsoil out to a temporary heap, cut out the main road and footpath levels to 20mm or so, level the sections, respread the topsoil on siad sections, done. Services, K&C etc, laters. Not a lot to it.

Te Anau useta be grass verges and gravel tracks, off the main drag. Making streets was a two-man operation: a grader with towed vibratory roller, tractor to buzz around, sweep and tow, contractors for K&C and gravel, sealing last. Services (water only) already there. Not a lot to it.

We useta seal 20+ miles per year, from a starting point of average County gravel roads. One rough-cut grader, one do-everything-else grader (Cat 112, me), contractors for gravel, make yer own topcourse from screened river run and clay from a likely local roadside bank, excavated with - what else - a grader. No plans. No surveyors (a level bolted to the front cab rail in the graders was all we ever used). No engineers (except if they fancied a long drive into the sticks, which was not often). Experience, feel, a taste for the right clay, and the knowledge that every single person ya met was a ratepayer, who Paid you, and who Expected Service. Not a lot to it.

Them were the days, so you can see why I get a little excited about the current ways: 12-tonne diggers everywhere, mostly at idle, Elfin Safety up the wazoo, a whole lotta jobs for the unskilled, and 'a lot of planning needed for a subdivision'.

Maybe.

A lotta Cost fer a subdiv, more like......

Lifestyle Blocks

Well, lemme just tee up the Broken Record for another spin. Right.
RPM - check.
No dust on needle - check.
Lower needle - check

The popularity of lifestyle blocks is a direct response to the relative unavailability of, and exceedingly high price of, serviced urban plots.
There are roughly 175,000 lifestyle blocks scattered around the larger cities in NZ.
Auckland - every direction.
Wellington - the Wairarapa,and the West Coast (Plimmerton to Foxton)
Christchurch - all directions
The agricultural production from these blocks is negligible.
The commute distance for these blocks is typically 50-80km.
The average lifestyle block is of the order of 1 to 3 ha (a typical urban plot is 0.06 ha or 600 sq m)
The average lifestyle block is serviced as to power and water, but disposes its own sewerage on site.
Few lifestyle blocks have public transport connections in a reasonable distance, of a type suitable for business commuting.
Most lifestyle blocks therefore have heavy dependence on private, fossil fuelled vehicles, with low vehicle occupancy.

And yet most common taters wail about the Weevils of Urban Sprawl......and uphold the Sanctity of MUL's, RUB's and other squiggles on Planning Maps.

Funny ol' world, innit.

Green reaction to Whiteware Initiative

Mr Normal Russian, spokesperson for the Alliance of Indigenous Laundrettes (AIL), had this to say about the initiative to bulk-buy whiteware for lower-decile consumers:

"We absolutely oppose this initiative, for seven reasons.
1 - the whiteware is made of plastic and metal, substances that don't occur in that form in Nature.
2 - the whiteware is foreign-made and denies Aotearoans the chance to make their own (from substances other than metal and plastic, of course)
3 - the whiteware is dangerous - there have been many - well, dozens, OK, one in Aotearoa - fires and explosions caused by the operation of these devices
4 - the whiteware uses electricity, which now has to be bought from Rich Aotearoans since the MRP float, further perpetuating the inequalities in this allegedly egalitarian land.
5 - the whiteware is to be made available for private usage, which denies the possibility of community, joint or shared use to the recipients.
6 - the whiteware is to be financed using dollars which have been earned by the export of Dairy, Meat and Oil - all products which to be perfectly Francesca we would all be better off not producing.
7 - the whiteware is in any case unnecessary - there are many rivers throughout Aotearoa full of Large Stones , which in combination can be (and are to this day in many, many countries) used to launder clothes quite satisfactorily.

There are many, many more reasons, but we regard Seven as a Particularly Significant (if not Magical) number, so that's it.

Questions?

Rates required

Every line item in a Council's Long Term Plan (LTP) , rolls up into one of several main buckets.




The political-dynamite bucket is Rates Required, because the media and the commentariat know exactly what that means in economic terms: the Council's Long arm, in Your short pocket, after your stash.



So they will move heaven, earth (and every other plausible line item which requires funding), into Some Other Bucket. Leaving Rates Required as a high but explainable figure.



The trick is to keep the punter's mind on Rates Required, because the machinations in 'Fees and Charges', or 'Contributions', or 'Other Revenue', then slide straight under the radar.



So Councils will not stop charging these ridiculous figures per section or lot, because they have ineptocrats to house and feed, plans to write for other ineptocrats to read, and all safely out of the sight of real public scrutiny.



It's a bit like the Bankstaz. Run into a bit of an issue, create an off-balance-sheet vehicle of some sort, shift the problem deals into it, and continue to pass audits and stress tests.



Shell game, really, but there you have it.



Those Fees, Charges, Contributions, Levies etc are all input costs to ratepayer purchases - just at several removes. In manufacturing lingo, Raw Materials, not Finished Goods.



But given that these inputs wind up on section and lot pricing (and then - the bywash effect - feed straight back into Existing Section pricing - a nice little CG for the householder who can then borrow against it or cash it in and light out for other parts), it is still the Council's long arm, in your short pocket.



Councils are, quite simply, economically clueless in this area. And they have completely foobarred the housing and residential land markets....



Sigh.

Farming and Infrastructure

'Farming' cannot ever be talked about as though it's a single activity. It depends exquisitely on a host of factors: altitude, soil type, depth of soil, rainfall, rain shadow, growing degree days (which are crop-specific), and that's just the beginning.

Parts of the Canterbury Plains (e.g south bank of the Waimak from Annat to Courtenay) have been cropped intensively for a century and a half, and are still going strong. Te Pirita was Strugglers Flat for that same century and a half until the Selwyn Plantation Board, tired of the ETS hoo-ha, mulched every single one of their downland planations, sold it for dairy, and with the application of mucho dihydrogen monoxide, the dairy farmers made those dry stony plains Verdant.



'Infrastructure' has a surprisngly long life. There are Roman drains still running under York Minster, and much of central Christchurch horizontal infrastructure dates back to the efforts of the Christchurch Drainage Board in the early construction period 1875-1889. That's 130 years give or take.

So when learned common taters worry about 'intergenerational equity' and how it is sooo last-century, let's just recall that 7 generations of Christchurch have benefitted from one concentrated burst of 19th century drain-laying.

LG gets a long overdue Purpose Re-definition

Statute has been amended: see the redefinition of 'Purpose - sec 10 - reproduced below.

If I was still in LG wiv my cold hand on the financial tiller, I'd be looking at the Social and Cultural hangers-on and thinking - Gosh - how long am I gonna see your well-remunerated faces 'round 'ere for? Being as how yer Statutory Purpose has been negatorated? In fact, I'm not sure I'm allowed statutorily to Pay y'all next week!

As Bob the Dylan sings 'Things have Changed' - (written and performed for the film 'Wonder Boys') Oh, the new LG purpose: (I've just kept the straight definition, there's a lot of inserting and replacing as it's yet another 2002 Act Amendment):

“(b) to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.”

and 'good quality' is defined as:

In this Act, good-quality, in relation to local infrastructure, local public services, and performance of regulatory functions, means infrastructure, services, and performance that are— “(a) efficient; and “(b) effective; and “(c) appropriate to present and anticipated future circumstances.

 LG readers - in the words of the aforementioned:

"People are crazy and times are strange
I’m locked in tight, I’m out of range
I used to care, but things have changed"

How to Fix the Housing Mess

A thought experiment.... There are so many dimensions to what needs to happen that no Gumnut is gonna get them all done. It will take a crash and another generation. But a preliminary list:

• Stop the local Gumnut racketeers. Roll them all the way back to reserve contributions in land or cash, and no other levies or new-section imposts. Because every such section-cost input, has to be paid for by householders, from a mortgage, with interest. The message is slowly getting through, but not to the bureaucrats, who quite rightly perceive that cutting off funding is cutting off their oxygen. I delight in making a submission every year, using fairly much this language, to the local Council's Draft Annual Plan, and demanding to speak to the Council in person. Does absolutely no good, but it puts a non-bureaucratic view on public record.
• Restrict Local Gumnuts to core specified activities in infrastructire provision. They've gone hog-wild over Social and Cultural Wellbeings these last 10 years, and their costs are unsurprisingly through the roof thereby. But in Other Thasn Rates cost trees, natcherally, because we cannae have a Rates Revolt, can we. So Rates are wound back, and Other Fees and Charges reach for the sky....Release the buskers, event planners, community liaisers, cultural advisers to better employments such as factory hands (building houses of course, see below) with a massive productivity gain/deadweight decrease. But do expect some blowback.
• Find a way to tune house-related lending: LVR's, capital ratios, whatever. Cheap credit just fuels the fire when supply is so restricted.
• Do away with zoning. This causes massive MUL land value distortions, and as the rise in capital value is untaxed once yer local friendly Planner does the next squiggle on the map to incorporate Your bit inside the red line, better to ban map squiggles for a generation or two. As Hugh P notes, a direct result of MUL's is the rise in rural lifestyle blocks, which typically grow only ponies and thistles, and occupy far more physical area than the relaxed or abolished MUL could have ever consumed at urban density. An Unintended Consequence....
• Yes, a Tobin Tax - stamp duty, CGT or something to increase friction in sales, would help. But results around the worls are decidely mixed, and one has to shudder at the thought of Yet Mo' Gray Suits needed to be administering the whole shebang....
• Light a fire under ComCom re the materials duopoly, or heck just tweak the duties on said items, and import a few dozen shiploads of Chinese gib or US cabinetry, tools, fittings and doodads, and bankrupt the sods.
• Do away with local Council planning and inspection, and use a uniform, centralised mob. The differences between jurisdictions are crazy, drive builders and engineers mad, and raise costs as common solutions cannot easily be created, disseminated and used.
• Factory-build houses and drop-ship them to sites. Only foundations ever need to be truely localised to site and circumstance. Once you have a platform anything on top should be assembled in QC-controlled spaces, by anyone but drug-addled hammer hands, and picked/packed/shipped/assembled by factory certified putter uppers. This will drive unit costs through the floor, and will cause a great winnowing of the Exterior Decoration crew - architects and designers - into more productive employment. Factory hands, what else. Win/win/win/win, I'd say.
• Wind back the LBP nonsense (the factory certification should cover all competencies) because it's an overreaction and an overhead and has driven many older craftsmen right out of the business. •Mandate eaves, pitched roofs, external guttering, and a design ethos which allows easy access to plumbing and electrics for repairs via access panels, conduits, etc. Lack of these features causes unmaintainability, lack of watertightness, and other woes. The guidebook here is Stewart Brand 'How Buildings Learn (what happens after they're built)'. Exceptions can be permitted only under a notified resource consent process (make the buggers really suffer....)
• Institute a central photo database of every new build showing the as-built location of services (wiring, pipes, etc) before walls or foundations are skinned over. Index photos to site/floor plan and elevations. Huge help in later additions, maintenance etc. Keep this as-built record up to date (yes, I know, counsel of perfection....)

Not one of these is politically possible, can withstand the deadweight of custom, guilds, unions and convention, or can be defended against the Legal eagles of said duopolies and assorted corporate interests. But it was a fun thought experiment, hey?

Economic madness in housing policy

The economic damage caused by these crazy policies is what needs to be hammered home: HughP has been very focussed on the 'broken-record' approach and it is gradually seeping through. Perhaps. Let's tabulate the said damage: - Median multiples in perma-unaffordable zone - Acquiescence in a materials supply cartel - Lack of nation-wide type approvals (for e.g. factory-built dwellings) - consents are Still a local-authority issue. Welcome to the ineptocracy! - Complete absence of time-money rules in the entire consents etc processes including the RMA. Quick fix would be to adopt current IRD rules - just try missing a tax payment and see what happens! - Disenfranchisement and disengagement of young citizens shut out of the housing market - Consultants, lawyers, engineers, insurers all feasting on the corpse of what passes for the development industry - 100% pure deadweight - Regulation of everything that is an input to the industry - if only the synthetic-cannabis rules could apply (use it until sufficient numbers of addled users clog up the A&E's of the nation, then stroke chin and say ' why, something's Gotter be Done) - Granting untaxed capital windfalls to landowners by continuing to squiggle on maps - Acquiescing on land-banking - Transmission of this economic malaise (as it applies to new-house pricing) throughout the housing market, as existing-home sellers who wish to buy new at roughly the same level of amenity, need to sell at near the same price (and trouser the CG, mais naturellement, if they play it right) Play this record at Every Opportunity, and don't forget that it Cannot be fixed by voting in a new lot of faces at either national or local government levels. It's a classic cluster-f**k. This stuff is systemic......

Tribes...

A village/tribe (direct descendants of the monkey clans - see 'Before the Dawn' - Nicolas Wade) may well be the default setting if we have to hit the factory reset button. But consider the losses in this highly sustainable way of living: •kiss goodbye to most present rights, including personal freedoms and gender equality. Tribes are ruled by The Big Man (note that gender) and if'n yer not in with The Man's crew, (like, wearing the wrong colour cap down Main Street) you'll shortly find yerself on a Ship of Fools (on a Good Day) or pegged out on the local beach at low tide (on a Bad Day). •kiss goodbye to most scale enterprise: mining, metals, the shaping thereof etc. Enterprises and capitalism depend on the utmost trust between total strangers, and tribes/clans do not take kindly to strangers (that's part of their core definition..,.) •kiss goodbye to cities and hence to the clustering and innovation thereby made possible: the various Renaissances that have taken place over the centuries have arisen from the cross-fertilisations of (quelle horreur!) Different Types Mingling: tribes don't take well to such uncontrolled goings-on. The genius of the Anglosphere is that we invented portable, discretionary (choose your own) tribes via countless associations, enterprises, and ventures, after millenia of imposed tribes via blood, locality, religion etc. The Enlightenment did for all that. Mind you, the re-tribalisation of the world has been long predicted, and Blut und Boden still has a visceral appeal to the revanchists amongst us....

A common tater complains about Housing Material Costs

Oh, it gets better, Boatman. •Duopoly in materials (see the Productivity Commish on this) •Massive front-loading of fees on the land by Rapacious Local Governments who have Four Wellbeings to house and feed •Cheap credit, which fuels the fire •Licensing of every tradie, tool, and anyone silly enough to consider a new build •Planning which generates an unearned and untaxed capital gain (typically 10x rural land price) as soon as yer draw that MUL squiggle on a map •Land banking (in the reasonable expectation of said CG) by Them with Knowledge and Insight (and a tame Planner or three on the Inside) •Elfin Safety, which typically adds 30-50% to the raw cost of e.g. a roofing or other at-height job (scaffolding, railing, harnessing, it's a Long List) •Inspections and Engineering Certification, which can easily exceed the raw materials cost by a wide margin •And never, ever forget the time value of money, throughout this ponderous process. Recall that the 'Mericans built the Empire State in 18 months. Yer'd be very lucky to get a Notified Resource Consent through in that time, and all the while the interest costs tick up, your Banker smiles at the interest revenue stream (or Frowns when yer miss the payment), and the Gumnuts of the world reject yer Permit Application for the 13th time because you haven't Detailed that there Joint in the Gubbinses by the Roof Thatch, which is another three-week go-around with your Engineer not ter mention his Fees. And did I mention that the Banker's grin is getting wider? •Plus (the icing on the cake, economical dead-weight-wise, ht PhilBest) is that all this cost-loading then transmits osmotically throughout the entire housing market, enrichening (and without being taxed on the CG generated) every existing houseowner. Because if'n she sells, and buys new, she'll haveta pay all of the above plus the agent's commission on the sale, to get an equivalent place. Universal pricing signal! Perfection, ain't it? Tip all these ingredients into a supply-starved Housing Context, mix 'em together, and Watch Them Prices Explode! And, like getting Milk from a Latte, or populating an Aquarium from Chowder, un-Mixing this sorry mess is a trifle, shall we say - challenging!

Councils and Cluelessness

The issue with Councils (I used to be a Treasurer of one back in the day - the title says it all) is quite simple to state, and very hard to fix. They now have power over so much of the regulatory aspects of housing and building (a partial list: - land prices (via zoning) - land developmnent (via consents and taxes) - housing design (via consents, design rules) - housing build (via inspections, requirements) - continuing use of house plus land (via Plans, consents and permitted uses) that their ordinary operations, in puddling through all of the above, have a major economic impact on the lives, businesses and prospects of anyone enmeshed in their gears. And yet, at the very same time, Councils are economically clueless. - they have no idea of, let alone penalty for causing monetary loss because of, the time value of money - they have no idea of the principles of monopoly (who else runs the sewers, roads, stormwater?) and take no precautions against the ancient abuses arising from this - they employ staff on salaries, who are completely disconnected from quantum or quality of output, and who thus experience precisely zip/zilch/nada of the consequences which would follow in the business world (termination, bankruptcy, or at the least, serious loss) - they are able to compulsorily demand fees for services (or no consent, buddy), rates (or we'll sell the place from under you), and levies (or no subdivision, you 'orrible greedy developer). Thus they wander serenely about the landscape, causing economic havoc in their wake, and congratulating themselves on a job well done, because they Do carefully count the awards made by juries of their peers... But how to change this horrific combination of power and incompetence - aye, well there's the rub....

LTP season is upon us again!

I occasionally take an interest in the Long Term Plan of of the local Council. It's my money they're spending, and they are obliged to Consult aboot it all.

I generally ask some pointed question: like:

•I see you have budgetted for X million pesos revenue, from Development Contributions. Please set out the average revenue per section expected, segmented into residential, commercial, industrial and Gummint.
•Please provide some economic commentary about these figures, given that they are significant inputs into section prices, and coming as they do early in the development cycle, attract significant developer financing cost additions prior to section sale, and are ultimately paid for by the incurrence of household, public and business debt.
•Please provide commentary about the revenue risk implicit in these averages, focussing on the most likely such risks: development flight to cheaper jurisdictions, housing inflation, buyer resistance, disadvantagement of low-income new-house purchasers.
•Please provide a table showing comparative Development Contributions for adjacent jurisdictions, for equivalently sized Councils across New Zealand, and against a New Zealnd average.

Y'see? A statement (on public record, no less), an education for Councillors who are often shocked! Shocked! to understand just what their faceless bureaucrats are inflicting on anyone enmeshed in their processes, and (best of all) a chance to stand up in front of the Council and tell these hapless fools just exactly what a dire effect they are having upon their local economy, residents and businesses.

Now, the Open Season for the LTP's is again upon us. Happy Hunting!

Licensed Building Practitioners

This will quite simply cause a polarisation in the market. Most repair/maintenance can be made to look as though it's always been there. So goodbye LBP's, consents, the swinging fees and official scrutiny for this type of work. Who could ever tell that it had happened at all? I recall saying something to this effect years ago....

There simply won't be any point in the middle-level type of extensions, alterations etc. By the time you've stumped up for the engineer, the LBP'ed foundation guy, the LBP'ed structural builder, the LBP'ed interior carpenter, the LBP'ed roofie, the LBP'ed exterior plasterer, the LBP'ed brickie or blockie, the LBP'ed Site Manager, the building consent fee, the inspections fees (one per trade needed!), not to mention the materials (remember them?), the supervisions, the architect if'n yer really stupid, and the resource consent if yer neighbours get a fit of the Nimby's, why, it will be much simpler to give the old dump the flick and buy something closer to what you actually want.

I think this is called 'Unintended Consequences'.

Councils and Time Value of Money

The issue with Councils and bureaucrats in general can be traced to three interlocking aspects, which together have over the years created the leisurely, process-and-rule bound, risk-averse culture we are now seeing.

1 - no revenue reponsibility. Council rates, fees and levies are non-contestable. They can be pencilled in at budget time and arrive on schedule. Guaranteed revenues mean that all Council staff have quite literally no connection with their financing. It is simply taken for granted, like the sunrise.

2 - no concept of time=money. Councils can inject time into processes without paying any monetary penalty. Their hapless customers still have to pay their mortgages, working capital overdrafts, consultants fees and staff. So every day that a Council injects into a process - has a direct and proportionate cost to the affected customer. Heck, Councils even 'stop the clock' when counting days elapsed for a consent. But the customers' Bankers don't.

3 - Council staff are answerable only to the CEO, and the CEO is a Council's (in the elected sense of members around the table) only employee. So there is no direct connection between anything which Councillors might think, want, or do, and the effect on staff. For all practical purposes staff are completely immune to Councillor influence.

So if the staff continue to with-hold, delay, defer, ignore or otherwise foobar the rebuild, just exactly what can be done about it, given all of the above?

Housing yet again

Housing affordability has five components:

1 - cost of land.

2 - cost of building - and as NZ is well under scale, and hence has hopelessly overpriced materials: it's still worth going to the States and filling a 40' container and paying GST plus duty on the contents: most materials are around 20% of the NZ converted cost.

3 - time taken - as time=money - the 'carry' can be significant even for a single build.

4 - credit availability and terms.

5 - Household income levels

The stoopid Councils contribute directly to #1 and #3, the craft nature of building in NZ and the lack of scale accounts for #2, and Gummint policy affects #4 and #5.

In 2001, in Christchurch, it was possible to buy a doer-upper for well south of $50K, in the non-leafy suburbs. By 2003, the same house was x3. What changed?

In 2002 the Labour Gummint, trying to be nice to the hopeless, introduced a guaranteed $100K credit line. Qualification for this was simple: 'can you fog a mirror?'.

Instant result in Chch - every single price in shall we say the structurally challenged house class went up overnight by, spookily enough, that same amount.

So there's the Gummint's little push to unaffordability. #4 shows that easing credit adds to prices. Whodathunk?

And finally #5: the rise of credentialism, soft degrees like media, art and music, and the constant repetition of the mantra 'education gets you up in the world', have all lead to a situation of inflated expectations, but same old employment choices. And now the GFC has commenced a winnowing of the crop: only the truly useful souls can look forward to even a moderate income: the hopeless are condemned to menial jobs or the dole, and as has been the case throughout human history, the well-off are quite capable of looking after themselves. Average incomes are static in nominal terms, and falling in real. As Glenn Reynolds notes:



"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay in, the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers."



Oh, and there is no political way out of this, because there are more Tax Consumers than Tax Producers, and the Consumers can, have and will outvote the Producers when push comes to shove. The middle class vote has been purchased by WFF, and despite their occasional unease, they'll stay bought.

So there in a nutshell is the bind we're in. And as any solution involves a choice between the hard way out, and the really hard way out, I don't see much will move until it has to. As the saying goes: what cannot go on forever, won't.

Urban Land prices in GodZone

A word about Development Contributions.

I'm an old grizzled ex-County Treasurer who actually used to administer these babies in the good old days before the dopey Sandra Lee LG Act 2002 injected 'Social and Cultural Wellbeings' into Councils spending arena.

DC's were really about public open space: land, reserves and the like. A simple cash amount, which was held in trust and applied only to reserves, was the norm, and/or a parcel or three of land set aside.

Nowadays, DC's have an incredibly complex calculation: Household Unit Equivalents (bit like the the Twenty' Equivalent Unit (TEU) measure for shipping container space) for almost everything a Council could conceivably dream up cost requirements for.

Recall that every legal human activity can fit within 'Social and Cultural Wellbeing', so naturally, there are Community Development Organisers, Events Planners, Reserves Consultators and dont even get me started on spatial planners, zonerators and other failed architects - all to be fed, housed, and their reports to each other and to the Council to be read and discussed with a straight face. All to be 'contributed' to....and then there are 'hard' spends like roading/water/sewer/drainage incremental impacts to be funded

The net impact of DC's (e.g. for an upcoming major Chch subdivision) is huge - $70K/section. And this impact is upfront - pay now, and this adds at the earliest stage, almost, to the hapless developer's carrying costs ('the carry').

At a commercial credit line rate (making the maths easy) of 10%pa, and a conception-to-first-sale time of 7 years, the rule-of-72 says that that $70K is now $140K. Yup, it has doubled.

See now why land prices in urban subdivisions are sky-high? Add everything together, recalling that those costs earliest on the list generate the highest carrying costs:

- land purchase
- 'carry' on land purchase cost
- survey and consents
- 'carry' on survey/consenting costs
- DC
- 'carry' on DC
- physical land development - civil works
- 'carry' on civil works
- sales and marketing costs
- developer margin
- and I've probably left a few cost items out....

and then ask:

1 - why anyone would be in this game?
2 - And for those brave enough to be there, why section prices are where they are?

The answer to 2 is - because of zoning (original purchase price inflated), the Social and Cultural well-beings (DC's inflated) , and the fact that Council staff have no concept of time=money ('carry' inflated)

After all, the Council staff don't have to carry the 'carry'.....so why not let that consent dawdle in the in-box for another month or six?

Now if the Wellbeings were deep-sixed, yer jest might have yerself a whole new ball game....keep watching!

Christchurch - Strangled by CCC staff

The old, traditional delivery areas of Local Government - roads, bridges, hard services such as drainage, sewers, water - are doing just fine.

But the regulatory areas such as planning and consents are simply getting in the way of everything. Spatial Planning is a failed concept - the RMA was meant to gauge proposals by reference to their effects, not their zoning. But it was captured early on by the zonerators and old-school town planners, and has never recovered.

Arguably, this crew have, by strangling land supply and imposing lengthy, adversarial processes on developers, designers and builders, added multiple layers of cost to homes, businesses and the local economy.

And the tightening of residential construction certification (DBH's Licensed Building Practitioner scheme) is another well intentioned but costly exercise: consider that of the 90% of Chch houses which are fine to carry on living in, fully 2/3 were put up by (shock, horror) completely uncertified people! Gadzooks! How can they now live with themselves?

Against this background of staff who blindly pursue failed techniques, causing cost wherever they cast their gaze, impervious to the time value of money, secure in their little fiefdoms, and protected by layers of certification, professional guilds and stroppy unions, how is a call to 'unity' amongst Councillors going to make the slightest scrap of difference?

We're living 'Yes, Minister' - and compulsorily paying through the nose to fund this incredible debacle.

And folk wonder why the pedestrian option - vote with yer feet and escape the CCC and its parasitic staff - is increasingly attractive?

Spengler hits another one out of the park

The best quote:

"the transformation of universities into Maoist re-education camps with beer kegs"

I'm struggling thorough Goldman's 'It's not the end of the world, it's just the end of You' and finding it a little too theistic but the learning, the breadth and the one-liners are amazing to behold.

Arab hunger

Spengler, once again, nails the essence of what is really going on in MENA. Implosion, in a word. These countries will simply become flyover territories. But short-term, they're gonna generate a world of refugee pain for the Eurozone and any other country unlucky enough to border them.....

Mushy Peas

Read the comments thread - LOL.

Disclaimer: I did not have English Peas for my evening meal.

Has Bin

'Spengler' pulls another superb grain of wheat from the mass of chaff being talked about OBL's demise. To precis: the poor old chap was thrown under the bus - a victim of the various Arab upheavals which have yet to run their course.

AQ had been more use to the Iranian cause of late, and the Saudis took a dim view of That, as the Yemeni buffer zone to their south is visibly disintegrating by the day. And as the Saudis both spawned and bankrolled OBL, they were certainly in a position to decide when the thread holding the sword over his head, should be snipped.

Yer won't hear much of this in the MSM of course. They're still veering between horror and delight. And there's no body, so the conspiracy theories are already running hot. Panem et circenses....

Reynold's Law and Christchurch

Reynold's law (bolded in the quote below) is one of those delightful discoveries that one stumbles across. Reynolds argued that societies often fail to understand the drivers of success and conflate its accidents with its essence. So when they want more of the essence they invest in more of the accidents.

The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.

One hopes against hope that, in rebuilding Christchurch, Reynold's Law is duly observed. After all, it's not hard to guess that, in order to rebuild in the first place, the efforts of builders, quarrymen, drivers, surveyors, engineers, geologists, welders, foundrymen, miners and roofers, are going to count just a tad more than those of aromatherapists, journalists, garage bands, kapa haka morris dancers, or barista.

But a glance at what's being churned out of our Places of Higher Learning, at great unit cost and a swingeing student loan burden to add to the frisson, and one must temper one's hopes with reality. As another of Reynolds' pithy references has it, the Higher Education Bubble is in full swing.

"...setting aside the technical professions (medicine, engineering, etc.) the cost of a bachelor’s degree is exploding just as its value in the marketplace is declining"

And a more sobering appraisal here...

Because, talking of subsidizing markers rather than building traits, our glorious Christchurch City Council has had an excellent track record of subsidizing stadia, community development advisers, flower festivals, and assorted other accidents.

One hopes aginst hope that Learning will Occur.

But the CCC tends to an Absence of Essence.

Artists as canaries in the coal mine

This was one of Kurt Vonnegut's phrases from his later years. But I've realised that it has a major flaw: 'artist' is a much misused word.



My own favourite artists in music are Tom Waits (check this clip for a wonderful mixture of vid and aud), Bob Dylan, Chris Rea.

If you look at Dylan's 'World Gone Wrong' cover notes from 1993, my take is that he spotted the coming shitstorm and nailed it in a few characteristically obtuse phrases, ostensibly about the music. Same with Tom Waits - Bone Machine and The Black Rider, also from the same period. Chris Rea - Road to hell or Expresso Logic.

All these guys sensed something in the atmosphere, and reacted in their own ways. Not necessarily in a form that could be consumed instantly, or even comprehended at all. But in the 20/20 basilisk stare of hindsight, man, did they all make sense.

Sitrep from Chch's Untouched North-east corner

Sitrep from the absolutely untouched north-east of Chch at Waimairi Beach: 100% habitable, no liquefaction, no problems, power, water on (we're 300m away from a coastal bore), Sewer/stormwater pipes have stayed in place, no chimneys to collapse, everyone going about their business. Also true of Forest Park and most of Parklands plus most of Tumara Park. That's over 4000 households total.

Key factors in success of this area:

* underlying strata not liquefaction risks
* recent (last 15 years) build to decent EQ codes
* easternmost part = furtherest away from the quake epicentre

So, chaps and chapesses, don't believe the MSM one-disaster-affects-everyone coverage.

The effects of the quake are in fact extremely variable. The known areas for liquefaction - around the rivers and Estuary, the peaty soils round St Albans and Papanui, and some sandy lenses over old swamp - are the ones affected. And the infrastructure damage to sewer and stormwater (pipes have literally been floated up through the road above) is a function of water table, soil types and amount of shaking. Interesting to drive through Tumara Park (between Burwood Hospital and Parklands) and see that a radius around the Travis Swamp has suffered pipe float and surface cracking, but the rest is quite simply intact.

The estimate of 20% is simply crap in terms of habitability. Chch has 160K households, so 20% is (counts on fingers) 32K dwellings. Yet only 200 people (at 2 per household, that's 100 households worth) overnighted at welfare centres. So there's an indication of the disconnect.

20% with Gib-board crack plastering needed, yeah, probably.

And the damage that Is there elsewhere is from the usual suspects: unreinforced masonry, lime-mortared bricks, untied veneer walls, and foundations that in the old days were just bricks tossed into a ring in a shallow trench and mortared over. No surprises.

The silver lining is that we won't have to worry aboot the predicted recession in the commercial construction industry, and the 20K job losses. There's a Lot of infrastructure to repair, and that will take months.

(Another decent jolt as I type, but blogging as I am in front of the log fire, with a cuppa joe at my side, and power, water on since 11 am yesterday and the camping loo deployed to ensure we don't add to the infrastructure loading, why worry?).

And a very high percentage of Chch households will be doing exactly the same thing.

Rock and Roll by the sea

Yup, the Big One (well, 7.1, anyways) has hit.

Total damage at the WayMad household: one preserving jar on the pantry floor, and (boo hoo) a snowboard fell across the bumper of the Big SUV. A Paint Scratch! I'm devastated.

But to judge from the breathless nature of much of the news coverage, you'd believe the whole of Christchurch is sleeping under the stars tonight. As looters carry away all the Good Stuff from trashed stores. And sniffer dogs look for Survivors under the wreckage of collapsed CBD verandahs (I swear I've seen the same dog's-bum clip at least thirty times today on TV One).

Not so.

The quake Has caused destruction in the areas long labelled as most susceptible: near the Estuary, around the river, on sandy soils, and towards the west of the city. Plus, old masonry, well below earthquake code, has oh so predictably suffered.

But the effect is extremely localised: suburb to suburb, Your Mileage May Vary.

And if, as we are, you're set up for camping, you roll out the chemical loo, get the torches and gas lights, light the log fire, and carry on with life.

Having an earthquake-code-compliant house, in a suburb with very low ground liqefaction possibilities, was a wise move.....

Housing and the New Normal

A good site for US housing bubbular info is Dr Housing Bubble. A few of the noobs here could do with a click over there, methinks.

And yes, LTV's of 110% were creeping in here - I do recall a Westpac marketing pamphlet for 'professionals' which offered just that.

But y'all are missing an important aspect of the whole puzzle.

You Cannot expect useful, current or relevant info from the MSM or indeed any organ which depends on ad revenues or continued access to the Corridors of Power, wherever they may be, in a time of transition.

Put simply, they are all too invested in the status quo to be trusted. Hence the predominance of what in t'old days were called 'puff pieces', RE types talking their book, and 'analysis' by reporters which Whaleoil correctly labels 'repeaters'. Nobody there is about to pull the house down on their own heads, so the happy-clappy talk continues.

What we Do have is a transition to the New Normal - consumption around 10-15% less permanently (about the extent to which it was debt-funded), the air going out of bubbles, and reversion to the age-old means of house prices 2.8-3.2 times household incomes, PE ratios in low-mid teens, and savings rates north of 10%.

All this was predicted by numerous authors around the 1990-1993 mark, sensed by artists - try reading the cover notes for Dylan's 'World Gone Wrong' (1993) and say it ain't so, and it is a tribute indeed to the capacity for human self-delusion that so many bubbles have been inflated to keep the Good Times Rollin' since then. Which is precisely the theme of Matt Taibbi's GS piece.

Events in funky li'l NZ are skewed by three factors which y'all can assess fer yerselves:

1 - NZ is a 'haven' destination, and this gives a Lot of insulation, as haven seekers arrive and bring their loot with them. This is an obvious factor in house prices, if little recognised.

2 - NZ can feed itself many times over, and has a wealth of mineral and fuel riches. There won't be the Peak Oil stuff here - the transition can be considerably smoothed thereby, and we won't starve either. Ye cannae say that aboot, e.g. Britain.

3 - There is a strong conversative/conservation streak in NZ (same root, differing implications) which, despite the usual underclass provocations, will see us through in relatively harmonious shape. Ye cannae say that aboot most of Europe.

The glass is, in fact, half full.....

Innovation in EV's - a Cambrian Explosion

Motoczysz has won the Isle of Man TT, just short of the magic 100mph lap speed, on an all-electric motorbike.

Wheee! As the Mogambo Guru likes to say.

Oil, Gaia's abiotic fruit, yer days are numbered.

Especially as the alternatives to batteries themselves are under development, as this little piece of good news shows.

Just as the early iron ships, steel bridges, internal combustion engines, and other technonological innovations went through a necessary stage of a 'Cambrian Explosion' - types, technologies, shapes etc. A Darwinian process then followed, winnowing the variety into a much, much smaller number of types, which we take for granted.

This motorcycle is part of EV's Cambrian Explosion.

Peak Oil?

A leetle rant about those who insist that PO is here! In NZ! I told yer so!

Variations on 'I told you so' are a good substitute for thinking?

NZ is nowhere near PO: the CSG prospecting undertaken by L&M, the Southland lignite fields, and the highly prospective offshore oiliferous zones are all local mitigators. The undoubted impact in a wider sense is of the toxic combination of locally selective PO (e.g. Europe), and BHO's latest excursion into the international version of Chicago Machine Politics which won't end well.

What is needed is a cool, realistic view of how best to use our certain and extensive resources well: so as to make a transition which:

- preserves living standards for working people at or somewhere near current levels. (The rich always have multiple options, ignore them, and it might be as well to state out loud what Won't be possible, in terms of aforesaid living standards' contents). And condemning folk to live in the late 17th century won't cut it, either.

- does not involve more than a reasonable extension of current technological trends. F'rinstance, positing mass use of personal EV's is perfectly OK. Proposing maglev rail everywhere isn't. No unicorn milk and pixie dust, please.

- takes into account the dark view exemplified by fiction such as Danny Suarez' 'Daemon', informed though such as John Robb's Global Guerillas (much mischief for very little input because of systempunkts spread liberally through our infrastuctures), and the genetic fact that we're highly evolved monkeys with an immense capacity for self-delusion and mayhem.

I could go on, but you get the idea. Maybe.

Could be termed 'sustainability' but that phrase is soooo devalued.

New renewable energy source

In a discussion about the EPA's approval to 'regulate' carbon doixide (that gas we all breathe out all the time), I came upon this priceless comment...

..harnessing the rotational energy of Grave-Spinning-Founding-Fathers.

Mind you, this can only last the term of the current Prez.

Dylan - Neighborhood Bully

Hadn't caught up with the lyrics till now - but my, don't they sound current? From 'Infidels'. Partial quote only.

"The neighborhood bully been driven out of every land,
He’s wandered the earth an exiled man.
Seen his family scattered, his people hounded and torn,
He’s always on trial for just being born.
He’s the neighborhood bully.

Well, he knocked out a lynch mob, he was criticized,
Old women condemned him, said he should apologize.
Then he destroyed a bomb factory, nobody was glad.
The bombs were meant for him. He was supposed to feel bad.
He’s the neighborhood bully.

Well, the chances are against it and the odds are slim
That he’ll live by the rules that the world makes for him,
‘Cause there’s a noose at his neck and a gun at his back
And a license to kill him is given out to every maniac.
He’s the neighborhood bully.

He got no allies to really speak of.
What he gets he must pay for, he don’t get it out of love.
He buys obsolete weapons and he won’t be denied
But no one sends flesh and blood to fight by his side.
He’s the neighborhood bully.

Well, he’s surrounded by pacifists who all want peace,
They pray for it nightly that the bloodshed must cease.
Now, they wouldn’t hurt a fly. To hurt one they would weep.
They lay and they wait for this bully to fall asleep.
He’s the neighborhood bully."