Automatic pizza for the people

How long before the chefs are redundant? An entrepreneur from Northern Italy has devised a machine that makes fresh pizza. From scratch:

The machine does not just slip a frozen pizza into a microwave. It actually whips up flour, water, tomato sauce and fresh ingredients to produce a piping hot pizza in about three minutes.

Balls to 2009

Okay, nth time lucky. Hopefully I'll finish this bastard Balls to 2009 post this time. Truth be told, I've been hacking and slashing at this essay most of January. The early drafts ended up deleted with extreme prejudice. I'd end up too drunk, too stoned, or passed out whilst stuck on a hell tangent about the failed revolutions of 1848. Later versions were stored away in the Edit Posts folder, sitting there like a mother-in-law whenever a new thought came up. Everything was too huge, too big. I wouldn't say above my pay grade. That's not the point. Street cleaners are above my pay grade.

If you're not depressed with the world economy after reading the double whammy in the New York Times by Michael Lewis and Michael Einhorn, The End of the Financial World As We Know It and How to Repair a Broken Financial World, well good on you. The recommendations in the latter article are all worthwhile, but unable to contain the damage. Of course you reform the Securities Commission. Of course to take the piss out the ratings agencies. And why are Credit Default Swaps still legal? Then again, Bernie Madoff is still out on bail even after getting caught trying to send jewellery to relatives. Money can grease the palm of Lady Justice in a way that an innocent on Death Row can't.

Some people are going to come out of this very very rich. Just as Fay Richwhite and other currency speculators made fortunes out of NZ's currency as the Kiwi floated back in 1985, imagine the vultures circling the US bailout cash. What would you do for a slice of US$1 trillion and more? The distressed asset posse are already licking their chops.

For the rest of us, the damage is done. That unquantifiable element of trust has disappeared. Naked nation-state self-interest is in vogue. Britain was an early adopter when it used anti-terrorism laws to preferentially remove its assets from Iceland's bankruptcy. While the steel tariffs are being raised in India, China and Vietnam, steel lobbies in the US are hassling to ensure that whatever Obama's infrastructure plans include steel as an ingredient. The EU is tinkering with tariffs as part of their bailout for their economic woes. Meantime, Fonterra is hoarding non-subsidised milk powder as demand shrivels.

Consider the fate of recycling programmes around the country. Commodity prices are collapsing in general, but recycling in particular is hard hit. Wellington City Council is considering stopping the collection of glass, as it's no longer economical. The global price of plastics has halved in recent months:

The price of recycled cans has fallen from £200 a tonne to £20 a tonne. Paper and card has fallen from £60 a tonne to just £10 a tonne, while certain plastics have halved to around £50 a tonne.

Raw aluminium has also lost over half its value in the last five months. Rio Tinto is selling its share of an aluminium refinery and China.Who is buying it up? Why, the Chinese of course. If you're going to spend your domestic recovery plan on infrastructure, it makes sense to outsource the hard yakka to the cheapest site, whilst keeping most of the yuan in the family. It will interesting to see if the Rio Tinto de-leveraging plan has put any squeeze on Bill English's electorate. What's the price of Tiwai Point?

Consider the efforts to create some genuine international financial standards, which are bogged down in petty self-interest. The lack of trust that exists between entities will not be going away any time soon. There's the very real prospect of really big failures that are being papered over with some really creative accounting, so there's a certain fear in dropping the numerical obfuscation.

Meantime, the Greek Chorus of the MSM is facing challenging times of their own. TV media will be facing sharply declining advertising revenue. The plight of the Tribune and New York Times shows the print media have issues too. The Brits have their own way of doing things, as the purchase of London's Evening Standard by Russian billionaire and former KGB man Alexander Lebedev. There have been talks on the QT regarding a merger of Channel Four and Channel 5. The merger will presumably be called Channel 4.5.

Media arms in NZ have similar existential crises. The NZ Herald and Listener are looking for new owners. I reckon the Herald will eventually find a buyer, but the Listener will be on the endangered list. How long before the DomPost becomes the DomPress? And will cost-cutting at TVNZ mean that the replacement for Agenda will be hosted by Jason Gunn?

You'll see a continuation of mergers and consolidations going on, whether it's commodities, services or press freedom. Strangely enough, this will acerbate the situation, as jobs are lost and even more debt is loaded on balance sheets to pay for it all. The current plight of Bank of America, who are asking for a bailout to help pay for their acquisition of Merill Lynch, is a timely example.

All about are signs that everyone's just looking after their own back yard and damn the rest. Governments around the world will have their hands full with keeping their citizens occupied. If it takes a tariff or non-trade barrier to keep the domestics employed, so be it. No leader wants ten or more percent of their populations unemployed. No good can come of that. Whether it's crime, welfare or civil unrest, no-one wants revolting idleness.

There will be unemployment. The US is losing half a million jobs a month, and even with the stimulus packages there's no sign of this slowing down. The services sector is getting thumped. Construction, retail, real estate agents, property management, advertising, all are going to get burned. Kiwi Income Property Trust and Westfield, watch out. The malls are going to get mauled. The IT market is facing decimation. Dell is closing manufacturing in Ireland, as the real estate market is providing more destruction to the economy than anything since the IRA disarmed.

Seven percent unemployment is now being touted around. Call me a pessimist, but I reckon we'll hit ten in 2009. The knock-on effects from overseas will knock us here too. Not just in obvious ones such as dairy, tourism and baby strollers. Just as NZ exported its unemployment in the good times, a lot of those prodigal expatriates will be returning to the nest as their adopted countries export their unemployment. Being poor in NZ is better than being poor in almost any other country. More social welfare than China, better healthcare than the US, and less dangerous fauna than Australia.

In summary, the financial crisis will become an economic one, if it hasn't already. According to Intrade, a site similar to iPredict, the chances the US slipping into Depression in 2009 is now 54 percent (Hat Tip Marginal Revolution). All the above is to try and get it all to sink in. We are really in the shit.

To coin a phrase, what can one do with 200,000 unemployed NZers? While Roger Douglas is right, that jobs are not the only thing to look at, KiwiPolitico's criticism of ignoring the human element is valid. While Roger's economic argument holds true, there's the political reality that double digit unemployment brings. 200,000 or more bored, broke and belligerent beneficiaries brings trouble.

This is one of the sticking points I have with NZX's ideas to boost the economy. Changing tax structures on capital investment is all very good in theory. But what if that capital investment is used to upgrade technology like Air NZ's new automated check-in? Essentially taxpayers could be subsidising companies to make people, or at least positions, redundant.

This is the crux of the problem; how to achieve greater productivity AND more jobs. Grow the cake, as Rodney and Roger are wont to say. The two concepts aren't mutually exclusive, after all. The lazy answer is tariffs, but that's a cop out. The big problem of tariffs is not introducing them, but how to get rid of them when the reason they were introduced no longer applies.

You need a better answer, so it's good to see Key has tasked NZX's Mark Weldon to front the Employment Summit. The editor of NZ Management magazine (that's the publication that doesn't consider Colin James too boring) has popped up on Pundit to sing Weldon's praises, while Cactus Kate pops the bubble on a certain underperforming CEO.

CK has a point, in that the NZX could do well to get its own house in order with greater transparency of its charges and sterner enforcement of its business. However, with the NZ Institute's David Skilling up-skilling to Singapore, there needs to be someone outside the political circus talking about these things. Between him and Lloyd Morrison, they've been banging on about the growth engine thing since before the election. So, in the absence of any other voices doing a better job of it, fair go. That's not to say there aren't other ideas. Bruce Sheppard, for example, is also giving it a good bash.

The stakes are high. As I said at the beginning, 1848 has been on my mind a bit. Not so much the socialist fervour, but in the global restlessness of it. The EU, the US, Russia and China are facing civil unrest, unless they can get their people working again. Around the world, police will play a pivotal role in how this plays out.

Here in NZ, it could be anything that might spark it off; unemployment, the police spy ring, the Tuhoe terrorist court appearances, even the Great ISP Copyright Cut-off starting in March that brings things to a head. Beware the marches of March. Or July. Appropriate responses to public pressure valves will be closely scrutinised. Greece and Australia have shown a glimpse of what can happen when the cops get it wrong.

And now, seeing how I've probably depressed the crap out of you, I'd better tag on a Hollywood ending. 2009 will also see the demise of boy racers. As the job market shrinks, car credit dries up and car maintenance costs pile up, boy racers will get their thrills vicariously by going to stock car derbies and off-road rallies. Rest easy, Mayor Bob!

Intoxication is recession-proof. Whilst many restaurants and pubs will shut up shop, there'll be start-ups in homebrew beer, spirits, and (even more) marijuana growing. While the market for organic produce takes a hit, bulk food barns will become more popular. Childhood obesity will no longer be a problem.

And since I can't think of anything else positive to say, I'll leave you with a funny condom ad:

Smells like unemployment

You might think spinning chicken shit into money was a laudable goal, but you'd be wrong there. Over 160 people will be losing their jobs in Morrinsville soon due to the smell of mushroom food. NZ Mushrooms, which uses the compost to grow its crop, has been ordered to close:

[Matamata-Piako Mayor Hugh] Vercoe said a composting site about a kilometre out of town was the root of the complaints, as opposed to the long-established growing operation in town. He said the composting site had been where it is for longer than some of the residents on lifestyle properties nearby.

The forced closure comes over a year since an Environment Court precedent that ruled that olfactory pollution is bad. The simpler solution by far would have been to rule against lifestyle properties being owned by townies with delicate noses instead.

Don't shoot!

There's something disconcerting about the Fire at Will Bill, but I don't think it's personal. The Fire at Mike Bill doesn't have the same ring or salience as Fire at Will. Still, it's disconcerting. But I suppose that's what you get for having a name that's also a verb and a noun.

As far as post-election labour reform goes, the Employment Relations Amendment Bill is a pretty tame beast. In my youth, there was a more wild variation on this theme. Every time there was a change of government, unions oscillated between being compulsory and voluntary. The daddy of the current amendment, the Employment Relations Act 1990, killed this argument stone dead.

The only truly strong unionists left these days are the ones representing the police (Police Association), public servants (PSA), the lawyers (Law Society) , the doctors (Medical Association) and the accountants (Institute of Chartered Accountants). What little life and legitimacy that still exists in blue collar unions largely resides with the large institutional employers; nurses & EPMU. So by targeting the small and medium enterprises, not only does National throw a bone to small and medium businesses during straightened times, it avoids mobilising legions of directly affected pissed off unionists. It's too early in the term to have rampaging mobs of placard-weilding pram-pushers on Lambton Quay.

On the subject of pram pushers, it's an interesting precedent that Tony Ryall has set on the Herceptin decision. Funding drugs from the main Health budget and not from the Pharmac one is a novel solution to the problem. I wonder if Ryall is keen to go beyond the Pharmac model for access to medicinal cannabis too.

But I digress. I don't think that the threat of marchers antagonised by the effects of the Fire at Will Bill is the reason National has put it under urgency. The Act itself won't come into effect until April 1st 2009, but the implications and certainty of its start date will give many employers food for thought over the summer barbecues. Instead of bunkering down for the hard landing, they might think twice about not hiring staff if they have little to risk.

I'm cautiously supportive of the bill for personal reasons too. As an unemployee, I might even start looking for work again. The realm of the unemployed is growing quickly, and the range of skills and experience on offer at the slave market is already flooded. It's a hirers' market for team players, upsellers, 3D CV bearers and superlative interview sitters. Alas, my list of references is shorter than a bee's toenails, my work history a Jackson Pollock. Colourful but useless. There's not much demand for an army of one.

But by guaranteeing a low risk opportunity for employers, I might just be able to swing all that. Maybe. It couldn't be worse than the patronisingly slow torture of the Workbridge or Mainstream government programmes, which have been nothing more than false hope.

1000 words for $15

A few years back, my best mate was made redundant from his well-paid job in London. Head office was moving to Istanbul, largely due to the competitive price of the labour market there. Telecom's call centre is now based in the Philippines. Take this trend to the nth degree, and what do you get? Maureen Dowd writes about the outsourcing of local stories in Pasadena Now to India. At US$7.50 for 1000 words, that's value for money that few NZ writers can live with.

The restaurant at the end of the union verse

Within 15 years, many NZ service workers (and their unions) will be decimated as their jobs are replaced by technology and overseas outsourcing. The Telecom call centre moving to a folder in Manila is just the start. Watch these BBC vids on a supermarket and restaurant to see where things are heading.