Capitalism for the Masses, Socialism for the 1%

Here’s another article explaining what is wrong with capitalism etc. these days:

For corporate welfare queens and their crystal baths, there is no benefit cap

Limited liability, offshore secrecy regimes and state handouts ensure those at the top bear none of the costs they inflict on us

Daniel Pudles 2211

Illustration by Daniel Pudles

In the documentary series which finished on Friday evening, the heiress Tamara Ecclestone set out to prove that she isn’t “a pointless, quite spoilt, really stupid, vacuous, empty human being”. This endeavour was not wholly successful. Channel 5 showed her supervising the refurbishment of her £45m home in London, in which she commissioned a £1m bathtub carved from Mexican crystal, an underground swimming pool complex, her own nightclub, a lift for her Ferrari, a bowling alley with crystal-studded balls and a spa and massage parlour for her five dogs, to save her the trouble of taking them to Harrods to have their hair sprayed and their nails painted. But there was something the series didn’t tell us: how much of this you helped to pay for.

Rest of Article

I think this bit sums it up best:

Socialism for the rich, capitalism for the poor: that is how our economies work. Those at the bottom are subject to the rigours of the free market. Those at the top are as pampered and protected as Tamara Ecclestone’s dogs.


Well I think capitalism should apply to everyone.

Signature Homes Franchiser Goes into Recievership

From the Southland Times:

Signature Homes franchise-holder in receivership

Last updated 09:44 22/11/2011
Wendy Perkins

FRUSTRATED: Queenstown teacher Wendy Perkins went public with concerns about her home, being built by franchise-holder Cunningham Building and Construction.

Cunningham Building and Construction, the company that holds the Southland franchise of Signature Homes, has been placed in receivership.

The receivership, which came into effect on Friday last week, was listed on the Companies Office website late yesterday.

Recievers Colin Gower and Stephen Tubbs of BDO Christchurch Limited were appointed on Friday. The first receivers’ report is due on January 26.

Yesterday, directors of Signature Homes continued to refuse to speak about the company’s position despite out-of-pocket tradesmen, angry suppliers and unhappy Signature Homes customers contacting The Southland Times.

Concerns had been raised about the financial situation of the Southland franchise since Queenstown teacher Wendy Perkins went public with concerns over franchise-holder Cunningham Building and Construction failing to meet deadlines on the construction of her home.

Rest of Article

Adn this is off the front page of their website:

Our Guarantees

Just satisfying our clients isn’t enough; our aim is to delight them with every aspect of our service and every detail of their new home. That’s not just a vague promise, we back it up with our exclusive independently-bonded guarantees. These include a Fixed Price Guarantee (before any work commences); a No Hidden Extras Guarantee; a Guaranteed Completion Date; Structural, Maintenance and Weathertightness Guarantees; a Satisfaction Guarantee and last but not least our unique Home Completion Guarantee, which provides 100% protection on any payments made by our clients during construction of their home.

Surely the franchisor must stand behind this failed franchisee and have this woman’s house finished?

Well I’m not holding my breath.  A quick Google search brought up this link. This story is from July 2010:

Collapsed Signature Homes franchises around New Zealand have left more than 450 unsecured business creditors out of pocket by more than $4.5 million during the past five years. Otago Daily Times Business Reporter Simon Hartley asks the parent of the franchised companies, Signature Homes Ltd and its managing director Gavin Hunt, about its business model for franchisees.

Seems this has happened many times before…



Britain Decides to Build Houses

What happens when local councils, planners etc. stop houses from being built for decades leading to a big housing shortage? And then gets exacerbated by a lending/credit crunch?

Well in England these things:

The government decides to:

  • Underwrite mortgages for first home buyers. They only need a 5% deposit.
  • Lend money to developers so they can build.
  • Let builders build on government owned land on ‘builder’s terms’ i.e. they don’t have to pay for the land until they’ve on sold the house.
  • Sell council houses to their occupiers on favourable terms.

See the details here.

Imagine if the government were to do that here?  Can you hear the howls of protest?


House Building Franchises So Risky

Saw this article this morning: link:


House signed, sealed – and undelivered

Fed up by lack of action on home


Last updated 05:00 18/11/2011
Wendy Perkins

HOMELESS AND OUT OF POCKET: Wendy Perkins has been paying for her Signature Home to be built but has received nothing more than a concrete slab since May.

Wendy Perkins is fed up waiting for her Signature Home and now she just wants some answers.

Since signing up for a new home in May, the Queenstown teacher has forked out almost $150,000 and all she has to show for it is a concrete slab and a bunch of unanswered questions.

“They’ve happily taken all this money off me and they’ve told me it is to secure all of the materials at great prices for me.”

Since May, Ms Perkins has been offered a raft of explanations by Invercargill Signature Homes franchisee Kelvin O’Connell as to why the project, which was meant to be completed next month, had been delayed, she said.

“I’ve got all the guarantees it will be completed but the problem is it hasn’t been started.

“I can’t leave it, I’ve got children coming home for Christmas from university and I am currently renting a tiny flat,” she said.

The final straw came yesterday when the framing, which was supposed to be delivered, did not turn up. Then her builder informed her he had no option but to start on another job on Monday.

“I feel betrayed because I got a guarantee from them they would be here today,” she said.

She had been apprehensive about commissioning the company to build her dream home and sought legal advice before signing the contract.

“We delayed signing the contract until we were assured that there was no problem, and I was reminded of the many guarantees, especially the completion guarantee.”

Mr O’Connell told The Southland Times yesterday he would not discuss the issue in the media.

“I’m not prepared to comment on any of this in the press. If Wendy wants to discuss that she can contact me and she should know that.” Mr O’Connell holds the franchise through his company Cunningham Building and Construction, which held a creditors’ meeting in Invercargill on Tuesday.

After the meeting he declined to comment until decisions about the company’s future had been made by himself and creditors.

Asked yesterday whether or not the company had “gone under”, Mr O’Connell said, “I haven’t heard anything about that.”

Cunningham Building was formerly part of RJ Cunningham Ltd before Mr O’Connell purchased it from property developer Russell Cunningham in 2003.

Phone calls to Signature Homes’ head office in Auckland, chief executive Phillip Howe and director Gavin Hunt also were unanswered yesterday.

Ms Perkins said she just wanted answers. “I would also like to know if there is anyone else out there in the same situation because I would like to bring us all together. We’re more powerful as a group.”

– The Southland Times


Man, building with a housing company franchise has got to be about the riskiest way to go I reckon.  So many people seem to get caught by them.  They owners pay a big chunk of money up front and then their house doesn’t get built.  And all the agreements, guarantees and so on just go out the window.

And the really shameful part about it is that the frachisors of these companies usually never pay out either.  So the local franchisee builer goes under, the franchisor says “Oh they’re a separate company, it’s nothing to do with us…” and then they cancel the franchise in that area and sell it again! So the franchisors actually make a lot of money when this happens as far as I can see.

And all evidence of the failed franchise is soon removed from the group website and the public would have a very hard time finding out if any of these businesses have gone under in the past.

Well Signature Homes advertise on the telly that they have a completion guarantee.  It will be interesting to see if the honour it in this case.  If they don’t then surely it’s a case of false advertising isn’t it?



Bring out the Soft Cushions

I quite like Matt Taibbi’s blog:

He outlines pretty well I reckon, the ways in which the banks in the US and other places have totally gamed the system, gotten bailed out by the public, and then basically carried on!

If you don’t understand the Occupy movement, then read some of his blog.  He makes it pretty clear.  Basically the playing field is not a level one.

See this post for and example of that: link. He recounts how CitiGroup has been breaking the law over and over again, taking people’s money and getting away with it.  And how one judge is standing up to them and the SEC who are prosecuting them – sort of.

I like Matt’s analogies with the common criminal:

Imagine a car thief who, when caught driving a stolen Lexus, tells the police he simply stepped into the wrong car and drove off by mistake. Now imagine he tells the same story when, two years later, he’s caught screaming over the GW bridge in a stolen Mercedes.

Then, two years after that, he’s caught on the Cross-Bronx Expressway blasting the stereo in a boosted 7-series BMW. Cops ask him for an explanation. “I must have gotten in the wrong car by mistake,” he says, shrugging. And the cops buy the story and send him home without a charge.

These days if you steal something, you’re dealt with pretty harshly.  As it should be.  But if you are a banker and steal hundreds of millions of dollars, again and again and again, you get poked with a soft cushion.  See the Monty Python sketch in Matt’s post for an explanation.

And this is NOT capitalism!  And it’s also not equitable treatment! It’s these things that the Occupy people are on about.


Now if you think Matt Taibbi must be some sort of left wing, hippie whinger, then read this from the NBR: link.  This part is the main gist of things:

Global crisis, tectonic shifts and New Zealand’s prosperity

Michael Enright, University of Hong Kong | Thursday November 17, 2011 |
Prof Michael Enright

Prof Michael Enright

Today’s headlines are filled with stories of collapsing public finances in Europe, concerns about the euro, public and private sector layoffs around the world, dauntingly persistent unemployment in the US, stagnation in Japan, slower growth in China.

Next are the stories of political paralysis, new governments in Greece and Italy, a European Union unable to work out its difficulties, a United States in which partisanship has replaced public interest, and a Japan with a revolving-door premiership unable to get its footing.

Next are stories on the spreading sense of deep unfairness, people losing pensions and jobs due to bureaucratic blunders or dishonesty, inside traders who made huge sums from shady deals, CEOs making millions while laying off thousands, and bankers and financiers who nearly brought down the world economy granting themselves salaries and bonuses that the rest of us can only dream of.

“Occupy Wall Street” and similar movements elsewhere are the result of a situation in which the many appear to be paying for the folly of the few.

Despite many analyses of today’s issues, some simple facts seem to be overlooked. In a nutshell, many of the problems have arisen because individuals, companies, and even nations have tried to borrow, rather than earn, their prosperity. The simple fact is that individuals, companies, and nations have to improve their competitiveness if they are to achieve a prosperity that is sustainable.


Borrow and Spend on Toys

All councils spend money like it’s water.

Well they might have to stop (ROFL) or perhaps they could tap the hapless ratepayers for more money – but that’s no good, they vote, so can’t upset them too much.  What about tapping more developers for more money? Yes, that sounds better, tax those rich planet defiling developers! And of course to be fair, that would have to include anyone building a garage, putting up a fence, a deck, scratching their bum…

And what should the justification be? Again, ROFL, like the council needs to justify any kinds of fees, ‘contributions’ etc.

But they better do something quick, because:

Auckland Council rating under pressure


Last updated 16:03 14/11/2011

Credit ratings agency Standard & Poor’s has put Auckland Council under the microscope for its skyrocketing debt levels that are expected to top operating revenues by 200 per cent in 2015.

The agency has the one-year-old ‘super city’ council, formed when councils across the Auckland region amalgamated, rated with an ‘AA’ long term issuer credit rating.

It could be downgraded by one notch to AA-, Standard & Poor’s credit analyst Anna Hughes has warned.

Standard & Poor’s decided to put the council on CreditWatch after its expensive transport plans raised alarm bells.

While Standard & Poor’s could not comment on what aspects of the transport plans stood out to it the most, Auckland Council’s plans for transport by 2020 include electrifying the existing rail network, completing a CBD rail link and extending ferry services to Beach Haven and Hobsonville.

”The rating action follows our discussions with Auckland Council which highlighted their plans to significantly increase capital expenditure, particularly in the area of transport,” Hughes said.

”At this stage, it is unclear as to how much of this capital expenditure will be funded using debt; however, current revenue and capital expenditure projections suggest that the council’s debt levels will exceed 170 per cent of operating revenues by fiscal 2013 and reach 200 per cent by fiscal 2015.”

The council has five bond issues listed on the New Zealand debt market, with a combined total of $973.6 million.

Once the council’s 2012 Long Term Plan draft is finalised in the next three months, the agency will be able to confirm whether the council will have its credit rating downgraded or not.



Maybe the plastic waka wasn’t such a bang up idea after all?  Or the taniwha advisory board?  Or the hoards of planners creating the 800 odd pages of new plans?

What about the billions ‘needed’ for rail projects?  Maybe some more policy analysts could solve this sticky fiscal problem for them? They’d better hire 10 or so, nah, make it a dozen.. they’d need to be representative of the community, minorities and so on, so they would need to set up a policy analyst recruitment committee.  They could draft the Policy Analyst Recruitment Manual for the council! Wow, now we’re cooking!

And if that doesn’t work, borrow some more!  After all, can’t stop spending! Many more people are required to be hired to make Auckland the most liveable city!



Davo36 Wins Council Battle Number 7

Well today, I got this letter from the council (names etc. blanked out by me):


So this is basically a complete win for me.  They have had to back down, because they were in the wrong.  WHICH IS WHAT I TOLD THEM MONTHS AND MONTHS AGO!

Where to from here? Well there are a couple of other things:

1) The council are in the process of adjusting my resource consent to remove the advice note on it stating the balconies may be there illegally and the owner of the property may need leases from Auckland Transport.

2) There’s the issue of costs.  This has cost me thousands in lawyers fees, planners fees and hundreds of hours of my time.  So I feel some sort of recompense is appropriate.

Another Day…

Consent fees rise lifts cost to $170 an hour

By Bernard Orsman

5:30 AM Monday Nov 7, 2011
Auckland Mayor Len Brown. Photo / Sarah Ivey

Auckland Mayor Len Brown. Photo / Sarah Ivey

Aucklanders are facing an increase in fees for resource and buildings consents.

Mayor Len Brown is proposing increases of between 6 and 10 per cent in next year’s budget, leading to hourly rates of up to $170 for processing consents.

The higher fees are projected to cost residents, developers and the business community $8 million as the council looks to recover 90 per cent of the $44 million annual cost of delivering consents with a private benefit.

Rest of Article

Well, well, well.  A deep hole in the ground.  And if you wanted to build one, it’d cost you more!

I have several points to make about this article:

1) I’m surprised they only recover 90% of the cost of providing building and resource consents.  With the fees they charge I would have thought they would have recovered well over 100%.  This figure I guess would not include other financial contributions like development contributions.

2) A rise of 6 to 10% is  a big rise no matter how you dress it up.

3) I agree timing is more important than the fee, but I’m not sure just becaue they fees are bigger the service will be any better.

4) The reason they’re processing consents way quicker than they used to is that there’s hardly any of them  compared to the property boom a few years ago. This never gets mentioned of course.