A "Culture of Entitlement"?

Kia-ora


With the current dialog about welfare, It is time to look at the people who are the real  beneficiaries, of the welfare system.
Who use the educated and healthy  workforce, the safe environment and the functioning infrastructure, our taxes and work, provides.
The people who say "everyone should stand on their own two feet", "you don't work you don't eat",  and "take personal responsibility",
The business sector.
What Business wants.

1. Staff fully educated and trained. "Job ready".
2. Low wages.
3. Tertiary education.
4. Better infrastructure, including power, roads, transport links and other services.
5. Better Government services.
6. Protection from crime.
7. Help with research.
8. Help with exporting.
9. Help with business development.
10. More immigration to keep wages and training costs down.
11. A pool of casual labour/unemployed, available when and where wanted.
12. Welfare benefits at starvation level, so people will take any low paid irregular hour job offered.

All supplied by tax payers and/or  employees, at great cost to the rest of us, that pay our taxes......
Now get this.
Not happy with being able to use, tax rebates, PAYE earners cannot, and the numerous accounting loopholes to minimise tax, as well as outright tax fraud, they also want.............
TAX CUTS for business!

What business wants, is a lot of benefits supplied by tax payers, and the unemployed.
But.
They want someone else to pay for it.
"Socialism for Business".
Where is the outrage from the "Tax Payers Union" and the "bene bashers"

Excuses/reasons, for not doing anything about children in poverty.

Kia-ora


This is a re-post from 2013. Unfortunately the need to talk about poverty is even greater now.

Right wing excuses reasons, for not doing anything about children in poverty.
1. “It costs too much”.
2. “Taxation is theft”.
3. “They are not as poor as they are in (Insert a third world Nation with less than half our GDP, and a 10th of our resources per capita)”.
4. “The statistics are wrong”.
5. “It is not as many as they claim”.
6. “You can’t get rid of poverty by giving people money”.
7. “I was in a poor persons house and they had “Chocolate biscuits, a colour TV, or, horrors, a bottle of beer”!!
8. “It’s all those solo mothers on the DPB breeding for a living”.
9. “I know a person who…………..”
10. “It is a choice they make”.
11. “It is people who make poor choices”.
12. “They shouldn’t have had kids they couldn’t afford”.
13. “Why should “I” pay for other peoples kids”.
14. “The centre will never vote for it”.
15. “We will do something if finances allow”.
16. “Giving them money made them poor”.
17. “Those socialists made them poor by giving them benefits”.
18. “I pay enough taxes”.
19. “There are no poor in New Zealand”.
20. “Not now, later!”

TPP, Corporate Coup or "Free trade"?

Kia-ora


"Free trade" or Corporate Magna Charta.
The overall benefits of "Free Trade agreements" to participants, especially smaller economies with less economic power, are often dubious, and frequently just a matter of how you rig the accounting. Leaving out externalities, like the increase in numbers on the dole, is common when counting "benefits". As the "parties of business" forget a ledger has two sides.
In fact no country has ever succeeded on exports alone, without a healthy internal economy. Export Share of GDP.
And no country has ever succeeded in benefiting from an export economy, without initial State support of the export sector. New Zealand's successful Dairy industry being a prime example of continued State support. Banned for future industries, if we sign the TPP.
"all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing similarly".
Kicking away the ladder. Ha-Joon Chang.
"Freer trade always results in benefits for both countries". Well no.
Even Ricardo never suggested that Britain give up making wine altogether, or Portugal textiles. As usual, simplistic slogans/magical thinking, seem to sway shallow intellects.
One where every country is going to get rich by out exporting every other country.
There are examples of "Free Trade" agreements, such as CER, which have been of net benefit to both countries. Notably where labour laws, the rule of law and democracy, and standards of living, are already, somewhat congruent. (Though it should be noted the Australian banks take more profit out of New Zealand, than the dairy sector earns).
The EU, has worked, as economic stimulus for Germany. It is debatable how well it has worked for Southern European countries. Clever of the Germans to get them to take on debt, from German banks,  to pay for German economic stimulus, though.
Then, there was our abandonment of our own businesses and workers, in the 80's and 90's, in pursuit of an ideological dream thinking that other countries would be mad enough to follow suit. Leaving us nothing to bargain with in future agreements. Only their purpose is mad.
That some have worked, is not, evidence that all such agreements will work. Or that adding services, law making and finance, is a good idea.
TPP
However. TPP ( The trans Pacific partnership) is NOT a "Free trade" agreement. It is an attempt to cement in corporate power, to override inconvenient  local Democracy, and collect rents from local communities in perpetuity.
Since when was giving large companies extra rights in law, and rights to extract even more economic rents, "Free trade"?

TPP gives corporations rights to overrule Democratic Governments.
The proponents of TPP claim that New Zealand has never been subject to an ISDS case. Of course not.
Our Governments in recent years, have been ideologically opposed to legislating against corporations for the common good. They are not bothered about giving foreign corporations rights above individuals and local business. Because they don't want to "interfere" with the "free market", and I suspect, with their own wealth..
We may want our future Governments, however, to legislate for the rights and welfare of New Zealanders and our environment. Not for Nestle', BP, Apple, Orivida,  Amazon and Exxon.
The future under TPP.
We can see the effect of TPP and ISDS in current "Free trade" agreements.
Local and State Governments looking at legislation in terms of "will we get sued" under "Free trade" or ISDS agreements.
Australia being sued by a tobacco company is just one example.
The EU has enough trouble trying to ban bee killing insect sprays in their own courts. Imagine if they had to answer also to "independent" ISDS tribunals.
Osceola A small town of 2 thousand fighting against water extraction.
Under NAFTA's ISDS provisions Canada is One of the most sued countries in the world.

The rest of the world is catching up to Canada. ISDS cases.
Corporate legal rights are already having a detrimental effect on progressive  legislation worldwide. Corporations do not need more rights that locals and individuals do not have.
For example. If Whangarei decides to take dog control, from the foreign corporation that currently has the contract. Having to pay for an ISDS case will give the council pause. A local firm does not have that recourse.   An overseas shipping company  pays extra, to get priority over other companies at NZ ports. A future Government may want to prevent such uncompetitive behavior, because it is disadvantaging coastal shipping.   We decide we want to re Nationalise banking. Because the country cannot afford to bleed so much money to the finance sector. Or close private prisons. Or restrict water extraction. Or cut CO2 emissions.
We don't really know what we may need to do in future to protect ourselves, local business and our environment, from corporations, who have been shown to have no other interests, apart from extracting as much money from local communities as they can.
Benefits?
The most optimistic benefit analysis is less, than the costs of ISDS and extra drug and copyright expense, we will have to pay overseas firms. Not to mention local job losses and even more offshoring of profits.
And giving drug companies, copyright holders and proprietors, rights way in excess of their original contribution.
Of course, our pursuit of pure "free trade" has worked so well? How much has our number of people in poverty increased by, again?

Can we have a future, with capitalism?

Kia-ora


I'll come clean. I am a capitalist. I've started two businesses, one not so successful, due to injuries and health issues at an inconvenient stage. Though we did OK in the end. Another which shows all the signs of a healthy infant. I don't expect we will make a fortune, but it will make, enough. Currently I work for a multinational.
It is one of life's irony's that someone like me, an advocate for the mixed economy, Democratic Socialist, model that has proven the most successful economic system, to date, is considered any way, radical.

No one has yet found a better system for allocation of day to day resources, within a community, than a market capitalist system.
You see potential customers for your market garden or building skills, you invest in training as a builder, buy a set of tools, or in a plot of land and seeds. If you do it well, you make a good living, but how much profit you can make is limited, by the fact there are many other small builders and market gardeners, and your potential customers can see who grows the best vegetables, or builds houses that stay up. At this level a "free market" works fine. The economy is pretty much in a steady state, as is the use of natural resources.

As soon as you grow the community larger, than one where everyone knows the skills and honesty of the other members, you need ways of ensuring those with market power do not accumulate too much of the communities wealth. Basically that real contributors to the community don't lose out to cheats, resulting in the breakdown of the system

No capitalist society has succeeded without a healthy dose of co-operation, common infrastructure, goods and services and regulation, "socialism". Countries that are, "successful" by all our normal measures, have an economy balanced between private and State. The most successful have high progressive taxation, and a State share of the economy, around 50 to 60%. Ours is down to 28%, and it shows.

Without the rule of law, healthy and educated  workers, public infrastructure and regulation of the "cheats" if you like, we cannot have a successful business, and wider economy.
Private provision of mass 'public' goods has proven to be incredibly inefficient, and wasteful. like our power companies.

It suits Bill Gates, and others, to attribute human advancement to capitalism, a self justification for having extorted extreme wealth.
Others attribute advances to human co-operation in developing infrastructure and services, laws, and sharing wealth and advancement, which capitalism can never deliver.

Both are correct.

The USA's post war advancement was due  to high taxes, socialist redistribution, a high quality public education system, State sponsored research and innovation, public infrastructure spending, anti trust laws, banking regulation and a large middle class.
All were needed to make capitalism work.
The concentration of wealth and power with late stage, insufficiently regulated, monopoly  capitalism, and the winding back of social infrastructure and redistribution, is causing the USA's decline.

In our example of small community capitalism above, people pretty much get out what they put in. The market limits how much they can take as profit. A "steady state economy, without growth, is possible.
You are buying yourself a job, if you like.

In a truly free market, an impossibility of course, where there is perfect information and competition, there cannot, of course, be any profit. "Free" marketeers/"free traders", don't want a "free market", they simply want one distorted in their favour.
Any business knows, that to make a profit you have to distort the market in some way. Convince people you are better than your competitors, get Government to legislate in your favour, or give you subsidies or public goods, or use monopoly or oligopoly power, to eliminate competition and keep wages low. Your profit is always someone else's loss.

Capitalism requires "growth" to function?
The motivation behind capitalists' is profit. Getting out more than you put in. Why start a business and take that risk, if you are going to make the same amount as you would as an employee.
However most people do make less than they put in, so that others can profit.
Many functioning businesses don't make a real profit. Including most of our essential small businesses. They make enough.  Small builders make a good living. But you could hardly say they take out more than they put in. The degree of competition precludes that. Building material suppliers, however, make huge profits in New Zealand, because they are a duopoly. Big box stores, and banks, are extremely effective, in removing wealth from communities.

In a finite world, the exponential growth required to make increasing  profits, and pay interest, is not possible.

Capitalism is cannibalising, the human and natural environment, it needs to survive.

The concentration of wealth and power insufficiently regulated capitalism, and excessive profit taking, has caused, now works against the survival of human civilisation. With the wealthy opposing any attempts to limit the damage.

The myth of "Retirement Savings"

Kia-ora


Advocates of Kiwisaver and other funded retirement savings schemes perpetuate the fundamental misunderstanding that "conventional" in New Zealand's case "neo-liberal" economists, speculators, finance companies, politicians and those with a lot of share holding wealth in non-productive enterprises like to perpetuate.

In other words all those who gain from wealth transfer from workers to non-productive wealthy parasites.

The myth is that, if we give our wealth to any of the above they will magically increase it due to the "miracle" of compounding interest from investment. Then give it back to us with extra when we retire.
US retirees are already finding out how that works.
The wealthy are keeping the retirement funds. Thanks very much!

"Saving" for retirement relies on three assumptions.

One. That an ever increasing amount of money equals a similar supply of real wealth and real capital.
Two. That an exponentially increasing wealth per person is possible in a finite world reaching resource limits.
Three. That putting money into increasing land prices and increasing derivative prices in the USA, a failing State, will somehow, "magically" mean more money (Healthcare, food, Housing etc) to support you or me in our retirement.

Retirement income, real income as opposed to monetary income, as does schooling healthcare, infrastructure supply and food, always comes from current production. If I do not eat my dinner today, it does not mean there is someone who can give me my dinner in my eighties.

If however, I ensure our young people have enough to eat, good health, training in skilled jobs, functioning and effective infrastructure and good jobs, or if these are not available, at least enough to live on, then New Zealand will be prosperous enough to support me in my old age.

The best investment for my old age then, is not giving my money away for financial wizards to lose, but to pay taxes to make sure that the next generation are happy, healthy, educated, employed and comfortable.

Also published in "The Standard".

The real aims of National’s “Education” policy.

Kia-ora


If the aims of National/ACT’s education policy were, genuinely, to to improve the learning, education and career choices for our children, including the ones that are failing at present, they would not be following policies which have signally failed to achieve any of these goals, anywhere else they have been tried.

When you realise the real results of the polices that National, and ACT, want to introduce in other countries, you begin to see the real aims.

A two tier education system.


One tier, of private schools, entrenching wealth and privilege.

http://www.toomuchonline.org/tmweekly.html
“jobs today — “particularly the most lucrative” — have become, they add, “available almost exclusively to young people from wealthy backgrounds. One example: In the UK, only 7 percent of children attend private schools. But two-thirds of the nation’s doctors have been privately educated”.


National are even more cheeky. They still want us to fund their spoilt brats privileged education, while they cut funding to our children..
http://www.stuff.co.nz/dominion-post/news/9601664/School-gets-aid-despite-assets-worth-millions


Tier two. “Education factories” designed to teach the minimum, while making profits for private owners.

A tier, of cheap, production line, “education” in conformity,  and the minimum required for working in dead end jobs. Unthinking cannon fodder for poor employers. The Teaching of critical and independent thought to be removed as far as possible. (So the accumulation of wealth by a few non working bludgers, and their spoilt offspring,  is unquestioned). Reading, writing and arithmetic. (National standards).

Of course, the destruction of Teachers collective voice, the unions, is needed, to remove opposition to dumbing down and “privatising” education..

The bribing of compliant “executive Teachers” that conform to National’s “vision” of education is, of course, designed to help the true aims.


Hostage Taking in The Classroom
https://www.nsfwcorp.com/dispatch/education-hostage/17cceda6b3d44b20031f5583a3c40e5d0c630f30/
“The commercial application of this extortion scheme is straightforward. In shock-doctrine-like fashion, the corporate community that typically lobbies against higher taxes to fund schools makes a business opportunity out of schools’ subsequent budget crises”.
“Ultimately, the public is removed from its own public education system and faraway moguls turn education policy into their ideological plaything, consequences be damned. Worst of all, the hostages are left to suffer – and have no hope of ever being released”.


When you see that the goal is to commercialise public education, regardless of education quality, and entrench the privileged, wealthy “class”, the seeming ineptitude and incompetence in “improving” “education” from National and ACT, makes sense.


Also Published in The standard.

UBI (3). Taxes, income and Welfare.

Kia-ora

An often repeated argument against increases in welfare, including UBI, minimum wages or payments to alleviate poverty, is that it will fuel inflation and most will end up no better off. (More market advocates don't seem to have the same faith in "the market" to hold prices down for the poor, as they do for the rich).
We never see that argument made against the 17 to 20% increases at the top end, which are already fuelling inflation, in food and housing, making prices too high for poorer people.

The answer is, to make the rich less wealthy.

The Laffer curve theory, the idea that Government share of the economy displaces private share, is often cited as a reason for not expanding the size of Government spending.
The theory is generally given as an argument against higher taxes along with the idea that higher taxes will simply be avoided.
 The evidence shows, however, up to a certain point, Government spending on infrastructure, education, health, services, welfare and social policy helps the private sector as well.
The worlds most successful economies generally have a Government share of the economy greater than ours. We have a lot of room to move in this direction.
However, a UBI is a change in distribution of incomes, not an increase in the size of Government.
WINZ will shrink, for a start. So will tax compliance costs for small business.

Higher progressive taxes are inevitable. As Obama said "it is math". We cannot have a viable economy/society while reducing Government services below a minimum and continuing to borrow, so a few wealthy people can pay less tax.
We cannot afford the compounding interest, on the billions required over time, for National's unaffordable tax cuts.

Middle to upper middle income PAYE earners claim, with some justification, they are paying a disproportionate share of taxes.
They are in the middle, between the better off, who can use tax dodges, and the poor, who do not have enough to pay tax.
A more even distribution of taxes, maybe, with capital gains taxes, financial transaction taxes, wealth taxes, which share costs more fairly around all sources of income/wealth, will  allow us to reduce PAYE income taxes share..
Broader definitions of income, for tax, makes the system fairer.

The psychological effect of universality. "I am getting something back for my taxes, even if I am paying more tax than I am getting back" should not be underestimated.
If New Zealand super was not universal, it would have been steeply reduced, or gone, 2 decades ago.

The highest marginal tax rates are paid by those on the lowest incomes. Then there are regressive taxes such as GST.  At the bottom end high marginal rates really are a disincentive to work. Abatement rates, plus work and transport costs means a welfare recipient that does some work is often worse off. At the other end I do not know of anyone who will turn down an extra million dollars in income becuase they may have to pay 600 thousand in tax.
Certainly didn't stop me from trying to work harder to raise my income, when marginal tax rates were 60%, in the early 80's..


I have no sympathy at all with those on high incomes who complain they use the same services as those on low incomes, but are paying a greater dollar amount of tax.
They are benefiting the most from the society NZ taxpayers and workers have built, and from Government services. That is how they became  wealthier! It is only fair that they pay the most. Chances are,  if they had been born in a country without our education, infrastructure, social and health systems, they would be the one in the cardboard box on the street.

Progressive taxation  is the price of living in a well resourced, pleasant, and cohesive society.

If you don't like it, move, to a tax free paradise, like Somalia!

But first, Please be consistent with your principles, and give back to New Zealanders all the proportion of your wealth that you earned because of our  efforts and support.

UBI (2) Why should we push for a UBI? (Universal basic income).

Why a UBI?

Firstly. To overturn some paradigms:
That a great many people should lead poor and constricted lives, so a very few can be rich.
That ordinary people are disposable economic production units.

The economy, and I use the word in its broadest sense, exists for people, not the other way around.

New Zealanders, apart from a few extremists, generally accept that some of the income/resources available to those in paid work is transferred to those who are too young, old, ill or incapable to undertake paid work and those who undertake work, such as childcare, which is essential to our society.

The debate is about the amount, and how to fund and distribute it.


So. Why should we use a UBI?

A UBI empowers everyone, especially those who are currently marginalised, with the principle, everyone should have enough of societies resources as of right, for, at least, the necessities of life. I would go further, and say that everyone deserves enough, to be a inclusive part of the community.

A UBI acknowledges, and enables a living, for the many people, such as those bringing up children, (Mostly women) who carry out essential, but currently poorly paid or unpaid, services for our society.

A UBI looks after those whose work is displaced by the necessary shift to a more energy efficient and environmentally sustainable economy.
We cannot expect the involved workers, for example, coal miners, to bear the whole costs of the shift.

A redistribution of income to those at the lower end, who have to spend all their income, will be “good for business”, especially local small and medium enterprises (SME’s).

A UBI and initial flat tax rates removes the high marginal rates on low income earners. Encouraging workforce participation, entrepreneurship and progress away from “welfare dependency”..

The simpler tax system possible with a UBI makes compliance easier, especially for SME’s, and avoidance harder.

Redistributing income to those who spend it locally, instead of on Maseratis, Hawaii holidays and imported electronic junk is good for our balance of payments.

It reverses the, economically and socially disastrous, re-distribution of income upwards of the last 3 decades.

Increases the money available for savings and investment locally.

Libertarians, the principled ones, can see a lot to like in giving people choices in how they spend income, rather than giving it to the Government to spend. Less Government involvement in income redistribution and allocation may well “shrink” some parts of Government. We see from the “mincome” experiment http://en.wikipedia.org/wiki/Mincome , that spending on welfare, health care, crime and other effects, of poverty and social dysfunction, will reduce over time.

A UBI allows time out; to study, get well, bring up children, carry out voluntary community work, teach, start a business, avoid burnout, add to community services/wealth.

We already have a UBI, for older people. NZ super.
It has been totally successful in removing poverty amongst the elderly, (less than 3% in poverty).

We can, at least, extend it to children.

Time we “made poverty, history!”

Also published in  The Standard

UBI (1). Memes and Paradigms.

This post is a follow up from.  http://thestandard.org.nz/ubi/


The way human beings process information means that  memes and slogans  are powerful ways of influencing people.
We are all aware of the persistence of memes like “we cannot afford super”, “bludging beneficiaries”,  “poverty is unsolvable”, people will only work if forced” etc……….

Propagandists know that if you repeat a meme or slogan often enough it becomes truth, even in the minds of those who should know better. The extreme right wing know this. Which is why they often just endlessly parrot the same mindless slogans.

More thoughtful people try and counter memes with facts and figures. Trying to persuade with reality.
In fact we  need to counter memes with our own.
“We cannot afford super/welfare”.
With;  We did in the 30’s to the 70’s when New Zealand was supposedly much poorer. Or, “We do very well out of the unpaid contributions of the elderly,  (and mothers,  carers, and all the other unpaid community workers). ”.
“Bludging beneficiaries”.
With;  “Those on welfare are you and me,  given a bit of bad luck or ill health”.
“People  are inherently lazy and need to be forced to work”. (I consider this a piece of projection from the greedy section of the right, who cannot conceive of anyone doing anything without reward).
With;  Most people contribute to society if they can.
“Poverty is unsolvable”.
With;  We solved it for the elderly in New Zealand.  (less than 3% in poverty).

A paradigm shift happens when someone challenges the accepted way of doing things.
When, for example, they ask.  “Why should electric vehicles be the same as fossil fuelled ones?”.

Those growing up after the 80’s will find it hard to imagine the paradigm shift, that was the rise of Neo-liberalism, in the 80’s, in New Zealand. The colossal untested experiment, it really was,  and the huge shift of wealth from the lower and middle classes to the richest of us.

Fairness, inclusiveness, equality, and the right of everyone to a decent life, was basically accepted by the left and right wing in New Zealand.  It wasn’t perfect, of course, but the existence of the ladder to a decent life, for everyone, was a large part of our national goals. Something we were, rightly, proud of.
The great neo-liberal experiment has succeeded in changing our social paradigm to a much more “dog eat dog”,  unequal and mean spirited society. The promised economic gains have only eventuated for a very few.

I don’t want to paint us into a corner and say that a UBI is the only answer.  (Thanks McFlock)  It is not,  it may not even be the right one.  (More on pros and cons next post).  Big changes  without deep thought,  examination, research, discussion and consensus,  is something we should leave to the other side.

But. In exploring ideas like this (Thanks Weka) we are, hopefully, starting a paradigm shift away from Neo-liberal acceptance of meanness and inequity  towards inclusiveness, equity, fairness and the right of all of us to a decent and hopeful life.
Why should we accept poverty in a country which has more than enough resources for everyone?
New Zealand once led the world in social policy. New Zealanders, of all political colours, are proud of our world leading human rights and social welfare initiatives.

Dauphin was the “town without poverty” http://en.wikipedia.org/wiki/Mincome

New Zealand could be,

“The country without poverty” .

Also Published in The Standard

UBI

Thanks to NZ Femme who put up this link.

https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/31639050894-e44e2c00
“‘It Can Be Done! Conquering Poverty in the US by 1976’, James Tobin, who would go on to win a Nobel Prize, wrote in 1967. At that time, almost 80% of the American population was in favor of adopting a small basic income. Here is an interesting article about this episode of American history. Nevertheless, Ronald Reagan sneered years later: ‘In the sixties we waged a war on poverty, and poverty won.’
Milestones of civilization are often first considered impossible utopias. Albert Hirschman, one of the great sociologists of the previous century, wrote that utopian dreams are usually rebutted on three grounds: futility (it is impossible), danger (the risks are too big) and perversity (its realization will result in the opposite: a dystopia). Yet Hirschmann also described how, once implemented, ideas previously considered utopian are quickly accepted as normal.”

Encapsulates the empowerment of people inherent in both income security and real democracy.
“Almost 80% of the American population was in favor of adopting a small basic income”.

New Zealand was once considered one of the best places on earth to live.

It could be again …

Also published in The Standard. UBI.

How to: Pick an Excuse for Not doing Anything About Poverty

Kia-ora

Right wing, excuses reasons, for not doing anything about children in poverty.

1. "It costs too much".
2. "Taxation is theft".
3. "They are not as poor as they are in (Insert a third world Nation with less than half our GDP, and a 10th of our resources per capita)".
4. "The statistics are wrong".
5. "It is not as many as they claim".
6. "You can't get rid of poverty by giving people money".
7. "I was in a poor persons house and they had "Chocolate biscuits, a colour TV, or, horrors, a bottle of beer"!!
8. "It's all those solo mothers on the DPB breeding for a living".
9. "I know a person who.............."
10. "It is a choice they make".
11. "It is people who make poor choices".
12. "They shouldn't have had kids they couldn't afford".
13. "Why should "I" pay for other peoples kids".
14. "The centre will never vote for it".
15. "We will do something if finances allow".
16. "Giving them money made them poor".
17. "Those socialists made them poor by giving them benefits".
18. "I pay enough taxes".
19. "There are no poor in New Zealand".
20. "Not now, later!"

Universal Basic Income. UBI.

Kia-ora


The concept of UBI has a long history in New Zealand.

Of course, we already have a UBI for those over 65.  Which has been extremely successful at eliminating poverty amongst the elderly, at a very moderate cost by international standards.

“In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally”. http://kjt-kt.blogspot.co.nz/2011/06/on-retirement-pensions-and-age-of.html

It has been a policy plank of various minor political parties, such as Social Credit. http://en.wikipedia.org/wiki/New_Zealand_Democratic_Party_for_Social_Credit

Currently, the Greens have discussed a UBI as part of welfare and economic policy development.
 
Many organisations, and individuals both left and right wing, have discussed  the idea. Including the darling of the extreme right, Roger Douglas.

Recently Gareth Morgan has been an advocate. He puts the case rather well. http://www.bigkahuna.org.nz/universal-basic-income.aspx
“Paying universal transfers acknowledges that every individual has the same unconditional right – to a basic income sufficient for them to live in dignity. The Unconditional Basic Income (UBI) provides this.
With this basic protection in place people are then free to add to that income through paid work if they choose. Equally, they can live on the UBI and pursue other activities – doing the unpaid work of caring for children or others in their community for example, or studying full time, or pursuing new business ventures. The UBI offers the prospect of ensuring everyone has the means to live while giving them the freedom to live their lives as they choose.”  

However David Preston from the MSD exemplifies what seems to be the main concern and almost the only real objection to a UBI.  People may chose to go surfing instead of working. Horrors! http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj10/universal-basic-income-cure-or-disease.html
The vision, of 80 year old pensioners surfing, this engenders,  caused me a great deal of mirth.






In fact the only real experiment with a universal basic income.  http://en.wikipedia.org/wiki/Mincome ,showed that the overwhelming majority, even with guaranteed income, chose to do something constructive.  Work, study or raising children. In the 70′s in New Zealand, with a much more generous unemployment benefit than we have now, almost everyone still chose to work.




The biggest advantage of a UBI, of course, is the almost total elimination of poverty, with all the savings in the accompanying economic and social costs. There is also the not inconsiderable savings in administration of welfare, simplified tax systems and the hit or miss nature of targeted welfare. Because it is universal, there is less incentive for the wealthy to try and destroy it, to cut taxes.

The main objection, apart from the horror of some people that recipients may simply go surfing, A horror they do not seem to extend to the inheritors of unearned extreme wealth, is cost!

It is not, however, a given, that the overall cost of a UBI would be more than that of a fair targeted welfare system.
Of course those same people  throw up their hands object to the cost of current welfare. They cannot understand why the poor are not made to live in cardboard boxes and starve quietly as they do in their ideal economies, just so those on high incomes can pay a few dollars less taxes.

Universal superannuation in New Zealand has been considerably cheaper and more effective than targeted schemes elsewhere.
Don’t see why a UBI should not pay for itself in the savings in administration, the decreased costs of poverty and the extra tax take from extra income within the economy. Flat taxes over the UBI rate, are possible, which should cheer up the right wing.
The removal of abatement rates for working and the removal of the penalty of extreme poverty for business failure, for those not already millionaires, can only help more people into work, study and entrepreneurship. For others, it frees them up for socially useful unpaid work, such as sport coaching, teaching and the myriads of other unpaid and unrecognized work which makes for a functional society.

Lastly. In an era where resources are running out, being able to survive without having to find ever more creative ways of using up resources, and ripping off your fellow citizens, is an essential step towards a steady state sustainable society.

Also published in  The Standard

New Zealand Joins the Roll of Shame.

New Zealand joins the roll of shame.

With recent legislation New Zealand's Government continues it's shameful attacks on human rights.

Bill allowing detention without trial, of refugees.

Joins the roll of shame, of countries which allow detention without trial.

We were already on the roll of countries that convict on secret evidence the accused is not allowed to see. Bill_Sutch  Achmed Zaoui

"First they came for"

Next it will be you and I!

This on top of a year of extensions in police powers, police assaults on legitimate demonstrators, Police forcibly arrest demonstrators despite them being within the law. legalising, formerly illegal spying and search and surveillance, Police and spy agencies broke the law so Government races to make their actions legal. and making recourse to the courts, against Government policy,  illegal  National stymies caregivers recourse to justice.. And continued attacks on workers rights. Jami Lee Ross' scab bill. The scab bill is probably too extreme even for National, but under its cover they are bringing in only slightly less repressive restrictions on workers rights.

New Zealand, the USA and UK were always democracies more in name than reality.
Now  with Governments almost daily restricting individual freedom, legitimate protest and democracy, they are becoming more and more like the totalitarian States we used to criticise, for their lack of consideration for human rights and the wishes, and best interests, of the Governed.

Then of course, we have the USA pursuing a man all around the world simply for telling their citizens how much their privacy was being breached, by their Government!

We are getting the type of repressive dictatorship, we used to fight against.

Our Governments seem determined to return, slowly so we don't fight back, the rule of,  the KGB, the Stasi or the Gestapo.

An Alternative Budget.

Kia-ora

An alternative Budget, From Matt McCarten.
  Matt has posed this as a "left wing" budget.

However many of the ideas would have been considered centrist economic thinking not long ago.
Just shows how much right wing extremists have dominated economic thinking.


"1. Abolish 15 per cent GST. Replace with 1 per cent financial transaction tax as recommended by the New Zealand Bankers Association. Same money."
An idea which is being looked at seriously all around the world. It does need adoption by many countries at once to prevent banks dodging it.
 
"2. Abolish PAYE on wages and salaries. Replace it with a wealth tax and a capital gains tax when shares, businesses, land and property are sold. People are taxed when they're cashing up, not when they are making it."
Actually an idea of that noted arch socialist, economic thinker, Adam Smith. "Tax the owners of capital and land, not labour and entrepreneurs, because they produce the wealth".
 
"3. 90 per cent Death Tax. You can't take it with you. Grown-up kids should earn their own money anyway."
True, but I think their should be a threshold, say, a million dollars. No reason why one family should be allowed to accumulate ever increasing wealth over generations., and many sound economic and social justice reasons why they shouldn't. However parents should be able to pass on some to their kids.
 
"4. Rent-to-buy homes underwritten by the state. Limiting homes to two a family and having a capital gains tax will keep prices affordable."
Exemptions for family homes or restrictions on the number of homes a family has may not work. How do you define family?  Better to again have a threshold. Maybe set at the current median price.
 
"5. State-created work schemes for all long-term jobless."
Not bad, but I think a Guaranteed income is better, bearing in mind that in a steady state sustainable economy we do not need all those working hours.
 
"6. A living wage set at $20 an hour minimum. It would be a stimulus package."
Contrary to often expressed opinions from the rabid right, minimum wages increase demand and increase jobs and business profits. A better form of stimulus than gifting money to the banks, who lost it in the first place.
 
"7. No tax on profits kept in a business."
An incentive to invest in business growth, entrepreneurship and employment, not speculation.
 
"8. Free public transport in major cities. That would get people out of their cars."
Likely to save on roading, energy, and other costs long term.
 
"9. Victims get 100 per cent state compensation for loss or injury. Offenders work it off if necessary.
I hope that is extended to those who knowingly sell harmful products and politicians who work against their constituents best interests.
 
"10. Make KiwiSaver a state-owned fund and buy all the Government's non-core commercial assets."
Still doesn't give the investment in sustainable productivity we need for the future, but better than putting it in the financial lottery that is overseas financial markets. The same ones that lost all the US pension funds.

All in all a much more progressive and sound budget than National's recent mean spirited and dysfunctional, joke. 

Democracy.

Kia-ora

It is notable that ordinary citizens, whatever their political views, do not trust politicians to act in the best interests of New Zealanders.

 

A distrust that is richly deserved!
 

And vote by overwhelming majority, for any measures which restrict politicians power and increase democracy.

It is no accident that Switzerland is the most stable, prosperous and peaceful state on earth.

Compare Switzerland to so called "representative democracies". An oxymoron equal to, "intelligence agencies".

The magical world of New Zealand's, Neo-Liberal, right wing.

Kia-ora

 The magical world of New Zealand's,  Neo-Liberal right wing.

It has been obvious that some people live in a different world than the rest of us. 

One where Chicago school economics, work!
One where you save the village by blowing it up! 
One where global warming can be stopped, Canute like, by legislation. 
One where dropping wages and giving everything to bloated financiers, makes us better off!
One where removing money from an economy makes it work better.
One where every country is going to get rich by out exporting every other country.
One where enabling greater inequality than the dark ages, works!
 

 The one with the trickle down fairy. "Give us the money and we will p-- on you".

The market fairy. "Leave it to the market and we will cut your wages,impoverish your children, and tell you it is a brighter future".

The Austerity fairy. "We will become better off by becoming poorer".

The catching up with Australia fairy. "We will catch up with Australia by doing almost the opposite of everything they have done".

The Democracy fairy. "We will let you vote, to change the names in Government, or on a few social issues which do not affect our making money off you, but not to make any meaningful changes to the way the country is run".


The privatisation fairy. "We will ensure that the NZ current account is forever in deficit, by selling all the income earning assets"

The debt fairy. "We will cut debt by borrowing $300mill a week, to pay for unaffordable tax cuts, to pay for our Hawaii holidays".

The Job fairy. " We will increase the number of jobs by putting thousands out of work, and cutting the unemployment benefit".

The "We support business" fairy. While ensuring New Zealanders have no money to buy from local businesses, and increasing small businesses costs.

The better future fairy. "We will give you a better future by paying you less, charging you more and cutting services".

It is pretty obvious which side of the political spectrum is on another planet. Planet Key! 
(New Zealand's,  financial industry shill, Prime Minister).

The Reserve Bank, Debt and the Property Market

Kia-ora

In New Zealand we have the "Reserve Bank Act".

Which basically requires the reserve bank to kill the rest of the economy, whenever Auckland house prices, or wages, rise.

Originally enacted, as a circuit breaker, to cap excessive inflation in the 80's, politicians have kept it, long past its use by date, because in their limited view, what works once, briefly, will work perpetually.
It could be argued that it was somewhat successful in curbing very high inflation, on that limited occasion, though others would note that the end of very high inflation ended with the slowing of the rise in oil prices.

Now, every time the New Zealand productive economy struggles off its knees, the reserve bank delivers another knockout.


Howdaft.  Puts it so much better than I can.  I have republished his article here.

I have highlighted some in bold.

"The issues of house price rises in Auckland and Christchurch is prompting comment that it may be time for the Governor of the Reserve Bank to raise interest rates.   It is noted in the media that an increase in interest rates will result in foreign money seeking higher returns to enter the domestic market and this will also increase the value of the already overvalued dollar. 

What hasn’t been commented on is that an increase in interest rates will also penalise every business and household in the country including everyone resident in Auckland and Christchurch who already have a mortgage and have no intention of buying or selling a home.  There will be no beneficial behaviour change within that wide group who are not seeking to get further into debt but it will impose hardship and constrain the rest of the economy.  The interest rate rise would be imposed simply as an attempt to limit price rises in response to artificial shortages of housing in two localised parts of the property market. 

The more sensible action would be to address the cause of these shortages rather than attempt to alter the market response by raising interest rates.

The Reserve Bank Act is not only completely ineffectual at slowing property prices it is the root cause of property price inflation.  Because the Reserve Bank Act obliges debtors to pay over the market price for debt, it also guarantees lenders greater than normal market returns on investments.  The result is that foreign cash looking for high and secure returns has flooded into the New Zealand property market.  The banks are incentivised to actively inflate the property market because of the high returns it provides (thanks to the Reserve Bank Act) and because of the flood of money that they have to invest.  As a result the more the Reserve Bank increases interests rates above the natural rate for the marketplace the more money that flows into the property market, the less risk averse lenders need to be because they receive higher margins on loans and this results in banks adopting laxer lending practices, this then leads to property price inflation which results in the rate of increase in capital value of the property (in the overheated parts of the market) to exceed the cost of debt - for a while at least – the negative real rate of interest in this small part of the property market consequently further incentivises borrowing.

The end result is that we are as a nation carrying far more debt than is necessary for the economy to function effectively, we have a ruinously over valued property market, we have a grossly overvalued exchange rate, we are bleeding our scarce foreign earnings on interest payments on all the debt and meanwhile our productive sector is crippled by both the cost of borrowing and by the over-valued and highly unstable exchange rate, Instead of suppressing inflation, the Reserve Bank act causes inflation.

The Reserve Bank Act is singularly the most stupid element of the reforms of the 1980’s.  It is utterly illogical in that it defies the simplest of precepts of economics.  The answer to the problem of inflation is simple.  If a government wishes to increase the cost to the consumer of any element of the economy without increasing the supply of that element it imposes a tax not a compulsory price increase – alcohol and tobacco are excellent examples of this concept in action.   The government also targets only those activities it wants to constrain.  So when it taxes alcohol it does that based on alcohol content – it doesn’t tax all liquids.

A tax also allows for redistribution and targeting by the government to occur so if the tax imposes on lower income households this can be resolved through social payments with the tax on debt as a source of funds.  Similarly the tax can be linked to the asset class or region causing the problem so there may be a lower tax on business debt.  This is not difficult; the banks already set interest rates by the manner in which the debt is secured, the tax could be similarly targeted.   This is only one possible mechanism as there are is a range of possible taxation responses to this problem which these need to be linked into a wider strategic review of the role of taxation in the economy.

At a more fundamental level any market failure or physical circumstances causing the price pressure also needs to be addressed.  Auckland prices are being driven by a range of other policy actions by government that put inflationary pressure into the market.  These include allowing uncontrolled foreign ownership of residential real estate, immigration – from both within New Zealand and from off-shore - and from a failure to fully price the true cost to the national economy of growth of the major cities and the cost of internal migration of business and residents.  Property in the larger cities but particularly in Auckland is being subsidised in a number of ways while the rest of the national market is in one form or another languishing with surplus housing and infrastructure.  In addition to fostering policy that actively inflates the cost of housing nationally and causes our international debt to be excessive and our currency to be over-valued we are not as a nation using our existing investment in infrastructure wisely. 

We need to be asking ourselves collectively why we, who as a nation have the highest natural capital per capita and arguably the best system of society in the world, are one of its debt basket cases.  We are only being prevented from being another Greece or Cyprus by the dairy industry.  We also need to ask why we are not so much better off as a nation when countries like China and Singapore are doing so much with so comparatively little.  The answer is quite simple and that comes down to the vision and courage of their political leadership, could I commend you to read George Monbiot’s recent post

http://www.monbiot.com/2013/04/22/the-self-hating-state/ as it very accurately describes the malaise that we have inflicted upon ourselves with our reforms and our reliance on “The Market”  to provide."

Government should be run like a business? Privatisation.

Kia-ora

Many business people say that a country should be run like a business.

Maybe they are right. It should be run like a SUCCESSFUL business.

It is appropriate for Government to take lessons from business success, and the reverse.

But when it comes down to details, right wing Neo-Liberal business does not want Government and country they govern to become too successful, or democratic. They are doing too well by taking advantage of slack regulation (regulation which favours them over the rest of society) and politicians foolishness.

In business a manager who fails to plan for the future would be sacked.

Right wing Neo-Liberal business say that Government should keep out of strategic planning. 

Successful business constantly plan advertise and strategise to “beat the market”.

  Right wing Neo-Liberal business insist that Government should muddle along, leaving it to “the market”.

Successful businesses involve as many people in decision making as possible.

Successful businesses involve their staff in decision making,.

Right wing Neo-Liberal business want Government dictatorship, so long as they run the dictators, and oppose democratic moves like MMP and BCIR.

Even New Zealands, non binding, referenda, the only Democratic voice allowed in New Zealand, have such a freshold for a triggering petition that they are guaranteed to be very infrequent. 

Successful businesses ensure they have a competitive advantage. Monopoly is even better.

Right wing Neo-Liberal business insists that we give up any competitive advantage with so called “free trade agreements”  and open licence for foreign corporate to plunder and selling profitable assets.

Successful business gets Government to bend the rules in their favour.

Right wing Neo-Liberal business insists that we remove trade protections and rules which work in our favour.

Management silo’s that only look at small part are known to be dysfunctional.

Right wing Neo-Liberal business says that every part of a countries infrastructure should be stand alone, dependant on individual profit and loss without regard to social and economic costs to the country as a whole. Giving small business and consumers inflated prices for utilities, so utilities make a profit, for example.  North Americans will remember ENRON.

Successful businesses work for the future of the entire company.  They know that if any one part cannot take excessive capital, or resources . 

Right wing Neo-Liberal business oppose any attempt by Government to rein in unjustified excessive profit taking from the rest of the economy. There is a propaganda war in New Zealand from the right wing at the moment to prevent the extraction of  excessive power profits.

Successful companies train, nurture and look after their staff.

Right wing Neo-Liberal business insist on dropping wages, and starving those who cannot work “pour encourager les autres”   regardless of the costs in lost demand, (A cost to business also) welfare and crime.

Successful business has consistent and effective policies, procedures and rules.

 Right wing Neo-Liberal business wants Government to refrain from regulation, except that which protects them,  of course.  (For example  taking away workers rights and protecting  big corporate rights to take as much as they can)  Giving us leaky houses, worker deaths, finance company failures, wage cuts, full jails and  tax payer bailouts.

Lastly, successful business use all their resources as effectively as possible and use the co-operative efforts of many people to meet goals.

Right wing Neo-Liberal business would rather countries do not have goals and that we are all turned into competing worker units.

Right wing propagandists pay lip service to the idea of running a country like a successful business. In reality they oppose Government being too good, because it would limit their ability to steal from the rest of us.  They are happy to continue profiting from a Government that does what they tell them.

One famously wanted to “drown Government in a bathtub”, because it affected his profits. Several famous NZ business men openly gloated about how they profited from  stealing tax payer owned infrastructure companies, and asset stripping them.

Good Government, real democracy, improving decision making by Government,  and  good effective regulation and protection, for the majority of a countries citizens, would destroy their gravy train.

Hence the hysterical overreaction to a minor piece of addition to Government regulation of power companies in New Zealand. 

Because it, if it is allowed to happen,  is the beginning of the end for the idea of “the market” and the mean spirited Neo-liberal,  consensus which has delivered so much wealth and power to a greedy few.

The Standard on Pay Rates.

Kia-ora

The New Zealand left wing newsletter/blog, "The Standard" has some interesting discussions on wage levels.

It appears only the already rich work harder when they are paid more. The poor have to work for love.

The idea that we are not competitive unless wages are low wears a bit thin when those at the very top can pay themselves 17 to 20% more each year.

 Zetetic in The Standard on pay rates.

"As you know, the Right says more money incentivises harder work. John Key felt he wasn’t working very hard when he first became PM on a net $250,000 a year, so he gave himself tax cuts and pay rises worth $100 a day. Just look at the results!
But I’m confused: why’s he cutting our pay with youth wages, higher Kiwisaver, and higher student loan repayments? Is it that rich people work harder when they get more money and poor people work harder when they get less?
I guess the elite really do see us as a different species – mules, I suppose. And I see them as a different species but for different reasons and as a different species – leeches.

Comparative Advantage?

Kia-ora

Even Ricardo never suggested that Britain give up making wine altogether, or Portugal textiles.

Comparative_advantage 

In fact no country has ever succeeded on exports alone, without a healthy internal economy.

And no country has ever succeeded in benefiting from an export economy without State support of the export sector.

Of course, our pursuit of pure free markets has worked so well? How much has our number of people in poverty increased by, again?

Ha-Joon on free trade.

""Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies.

Contrary to the popular myth, Britain had been an aggressive user, and in certain areas a pioneer, of activist policies intended to promote its industries. Such policies, although limited in scope, date back from the 14^th century (Edward III) and the 15^th century (Henry VII) in relation to woollen manufacturing, the leading industry of the time.  England then was an exporter of raw wool to the Low Countries, and Henry VII for example tried to change this by taxing raw wool exports and poaching skilled workers from the Low Countries.

Particularly between the trade policy reform of its first Prime Minister Robert Walpole in 1721 and its adoption of free trade around 1860, Britain used very dirigiste trade and industrial policies, involving measures very similar to what countries like Japan and Korea later used in order to develop their industries. During this period, it protected its industries a lot more heavily than did France, the supposed dirigiste counterpoint to its free-trade, free-market system. Given this history, argued Friedrich List, the leading German economist of the mid-19^th century, Britain preaching free trade to less advanced countries like Germany and the USA was like someone trying to “kick away the ladder” with which he had climbed to the top.""