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"

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?

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!"

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.""

Kean on the "Roving Cavaliers of Credit" or How Bankers got to Rule the World.

Kia-ora

For anyone who is still wedded to the idea that banks do not “print money” and push up the price of assets, totally unrestrained by the size of the economy.


Kean on the "Roving Cavaliers of Credit" or How Bankers got to Rule the World.
“”In some ways these conclusions are unremarkable: banks make money by extending debt, and the more they create, the more they are likely to earn. But this is a revolutionary conclusion when compared to standard thinking about banks and debt, because the money multiplier model implies that, whatever banks might want to do, they are constrained from so doing by a money creation process that they do not control.
However, in the real world, they do control the creation of credit. Given their proclivity to lend as much as is possible, the only real constraint on bank lending is the public’s willingness to go into debt. In the model economy shown here, that willingness directly relates to the perceived possibilities for profitable investment—and since these are limited, so also is the uptake of debt.
But in the real world—and in my models of Minsky’s Financial Instability Hypothesis—there is an additional reason why the public will take on debt: 

the perception of possibilities for private gain from leveraged speculation on asset prices.”"

Kean describes exactly the real world effects of current monetary policy.


Both Cyprus and Greece show how  Democracy can be overturned at the wim of bankers trying to protect their income, from pushing up asset prices, with loans they should never have been allowed to make, with money they have produced out of thin air. A power only a democratically controlled Government should have.

Recent moves towards legislation, to take money from us to bail out failing banks, again, by the New Zealand Government , shows who our politicians really work for!

Why do "they" want our schools?

Kia-ora

Ever wondered why we have the push for charter schools when the evidence is so solidly in favour of State run unionised schools. The worlds top school systems are all State run and most are unionised.

Ever wondered why we are repeatedly told our State schools are failing, when they have been proven to be amongst the worlds best. PISA rankings at High school level.

Ever wondered why we are being pushed towards Charter/privatised schools when all the evidence shows they do not do as well as State schools.  Stanford University Study. Despite all the extra funding charter schools have obtained, and the often extra effort and pupil selection poured in to make them work, all but a few demonstration schools, have done worse in the USA than State schools.

Sweden and UK's schools are also falling in standards since charter schools were introduced.

Ever wondered why State schools are being starved of funding while extra money is put into private schools.

Ever wondered why we are funding tests to tell us what we already know.  Poor ,and hungry, kids do not do as well in school.

So they can claim the tests show State schools are failing.

Ever wondered why we are trying to imitate the USA, number 29 in school results, where poor kids are simply excluded from secondary education, and not Finland or even Korea, which are 1 and 2 respectively.

As always. Follow the money!


The finance industry has proven to be almost totally ineffectual in supporting entrepreneurial and productive business.
What they are good at is obtaining tax payer funding to add to their profits.
When tax payers are not bailing out their failures.

Education provides a certain source of tax and publicly funded wealth that, until recently, has been largely unavailable to the corporate pirates.

Education Profiteering Wall Streets Next Big Thing?page=0%2C0
 "Education privatization would not, per se, create a net new stimulus for the economy. But by diverting large existing flows of money from the public to the private sector it would create new profit-making ventures that could be capitalized and transformed into stocks, derivatives and leveraged securities."

"The Chief Finance Officer of JP Morgan reports that some 75% of the net increase in corporate profits between 2000 and 2007 -- before the financial crash -- was a result of cuts in workers' wages and benefits. Given that unions are the only serious vehicles for resistance to the corporate low-wage strategy, ................"

A challenge 

The attacks on State schools and their Teachers is entirely so that corporates can make money from the taxes we pay for education.

As usual the private sector are so poor at doing the thing they claim is their strength, starting viable businesses, that they want to steal "the socialists" successes. Ours!

Added. 17th. 
New Zealand's Charter schools are to be exempted from the official information Act, so the public will not even be able to assess how they are performing. Charter, sorry, "partnership" schools exempted from OIA.

"Printing Money". Banking. Part Two.

Kia-ora

The Greens talk about Necessary Changes to Monetary Policy.
"Time to stop fighting Yesterday's war."

Gareth Morgan.

And why I do not agree with him this time.

Borrowing money, "printed money" from foreign banks, and paying 14 billion extra a year for the privilege, is sensible?
http://kjt-kt.blogspot.co.nz/2...
Do I detect a bit of self interest here?


In fact "printing money" worked very effectively for NZ in the 30's. So well it was copied by other countries.
All the howls about Zimbabwe and the Weimer
republic forget that their productive sectors were first destroyed,
before they started printing money, When there was nothing to buy with
it.

Not a lot different from Nationals present efforts!

A lot different from lending to ourselves to invest in paying our
under-utilised and capable construction industry to rebuild
Christchurch.
Vital infrastructure which will return the investment many times in future.

Also we did exactly the same thing from 1935 until the 60?s. Called the
Development finance corporation for a long time.
Worked well for us. Got us out of the depression before the US and UK for a start.
We are still using a lot of those assets. Apart from the ones our idiot
Governments sold, so someone else could profit from them.

National still seems to want to follow the USA, UK, Ireland and Greece down the tubes.

Banking.

Kia-ora

 The banking system has no cost of production. Adding Zero's to an account for a loan is effectively "free". Banks are then paid well for this 'service". The myth that banking is simply on-lending savings was exploded long ago.

Banks naturally favour "safe" investments for lending such as land and existing companies, tilting the playing field against new sustainable investment and artificially driving up the prices of "safe" investments against others.
The incentive is naturally to lend as much as possible, while using their financial clout to skew the economy and regulation to favour banks, getting an ever greater share of economic wealth.

Interest requires infinite economic growth. Not possible in a finite world.
The answer is public banking and the removal of interest.
Public Banking.

Welfare/Social Insurance, Myths Busted.

Kia-ora

Welfare Myth Busting.

 And a right wing job busting Government was elected.

More on welfare myths here. Ten Myths About Welfare/

Far from being bludgers, most social welfare recipients are receiving the social insurance they paid taxes for during the remainder of their working lives.

The few that are not are almost all people who have physical or mental disabilities, which prevent them from working. A decent society should be looking after them anyway.

Beneficiary Bashing. New Zealand.

Kia-ora

Social welfare recipients are commonly demonized by right wing Governments.

Usually for the same reasons the Nazis used Jews.
To distract from the failure of Neo-liberal Government.

Most of the memes they use are demonstrably false.

Ten myths about welfare
"Looking across all forms of benefits, 61.4 % of recipients are benefit dependent for four years or less. Only 14.3 % are on benefits for more than ten years – and since those figures include people with chronic physical and mental disabilities, the ratio of those staying on benefits because it is a “lifetime, lifestyle choice’ is lower again."

Note that over 35 years ago in New Zealand when social welfare payments were proportionately a lot higher than they are now, but there was near full employment, there were so few unemployed the Prime Minister, famously, stated he knew them all by name.

The Canadian mincome, minimum income experiment. 
Mincome "She found that only new mothers and teenagers worked less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. In addition, Forget finds that in the period that Mincome was administered, hospital visits dropped 8.5 per cent, with fewer incidences of work-related injuries, and fewer emergency room visits from car accidents and domestic abuse^."

"We cannot afford social welfare"

Well. It seems we cannot afford social welfare for the rich and corporates.

Welfare fraud 0.1% of welfare payments. About 16 million.
Tax fraud 7 billion.
Tax avoidance by the rich. Half of the wealthiest people in NZ do not pay tax!
7 billion plus.
Profits and interest paid overseas 14 billion plus.

It is not social insurance that we cannot afford.

It is Neo-Liberal right wing Governments.

Kia-ora

Chang

The "Wealth Creator" myth. Stealing the commons. Part two.

Kia-ora 

One of the memes the wealthy and their sycophants prefer to repeat is that, "the wealthy create wealth".

Lies the Rich Perpetuate.

That is demonstrably wrong.

"The wealthy got their wealth by entrepreneurship and starting new business" ?.
Well! no. Most are wealthy because they are born with it. The majority of the rest because they gamed our system to make money from existing assets and public utilities. Morally, no different from robbing someones house.

How Allan Gibb's made a Mint out of a Former Public Utility.
""Gibbs spotted his opportunity early in 1990 when he did his hallmark one-page analysis of what Telecom might be worth. "It was a lovely, fat company, with huge margins and a lazy balance sheet. It was obvious if you could keep the margins it would be a fantastic business." Like an alpha predator, he went for the throat"".

"The wealthy  became wealthy through start-ups and entrepreneurship. Selling people products they want".?

Less than 1% of the wealth held by wealthy households in the USA is invested as so called "angel capital". In reality the wealthy avoid risky start-ups, like the plague. They prefer privatizations of State utilities and financial products where there return is assured by tax payer funding. Those that are too big or too essential for the State to allow them to fail.
Affluent Survey.

In New Zealand many people bought into the myth that "if they wealthy were allowed to keep more of their wealth they would invest more in the productive economy and we would all be better off".
New Zealand went so far and fast with this Neo-liberal piece of B-s that, like Ireland, we were held out as a poster child for other countries.

The infamous "trickle down effect".

After 35 years of tax cuts for the wealthy, asset sales, anti-union legislation, deregulation of banking/finance and wage and welfare cuts.

We have;
 Huge capital losses to offshore bankers and profit takers.
Growth well behind the OECD average.
Increasing child poverty.
Steeply rising prices. Especially for privatised utilities.
Median wages are dropping while the wealthy get 17% annual increases.
Billion dollar bailouts for financiers.
Millions of dollars to reinstate previously privatised essential infrastructure.

Anyone who still believes that giving the already wealthy more of our wealth is the answer is either seriously deluded, or venal.

Agenda for today.

Kia-ora

NZ has a whole generation of managers, cannot call them leaders, who have no vision apart from cutting staff, costs and services.

It was an accountant who told me once, "do not put an accountant in charge, they know the cost of everything, and the value of nothing".

Then they act surprised when their skilled staff head for Australia, their customers head elsewhere and their business tanks.

The same logic has now been applied to the whole country.

On New Zealand's Retirement Income. Pension.

Kia-ora

 

The finance industry have been creaming their pants, for a return to the halcyon days, before the tax rebates were removed from superannuation savings. When they got to play with our money for free, and the negative returns and high charges were ignored, because of tax payer subsidies.

Egged on by the neo-liberals who prefer the elderly, the unemployed and the sick to starve in the streets, as an incentive to scare working people into accepting starvation wages, while they continue to get 17% increases in wealth, the finance industry is dreaming of getting more of their sticky hands on our wealth,  with private super funds.

Since the 70's they have been constant in the meme that we cannot afford super. A meme that has been driven entirely by the self interest of those, who are too wealthy to need super and too mean to pay taxes, and a greedy finance industry.

Unfortunately, it is true, that if you repeat bullshit often enough, even those who should know better come to believe it.

We cannot afford super is code for, "we should leave our elderly to beg on the streets". So that wealthy people can pay less tax and the finance industry can again lose our savings for us.

In fact the idea that State super is unaffordable is crap from the same people that cry TINA and reckon that all social insurance is unaffordable.

If they win with super, they will just start on other social wages.

In reality it is much more affordable than the finance company bailouts, which would be necessary with private super.

.

http://norightturn.blogspot.co.nz/2012/06/what-superannuation-crisis.html

"So, in 2050, we're projected to be paying only 1% of GDP more in superannuation than we were paying in 1990. Quelle horreur! This is not a difference to be terrified of, and it is easily manageable with a modest increase in taxation, either now or in the future (though that perhaps is exactly what those pushing for change are frightened of: higher taxes)".

Intergenerational theft is another piece of oft repeated stupidity.

http://kjt-kt.blogspot.co.nz/2011/06/on-retirement-pensions-and-age-of.html

"Do we really want to return to the days when most elderly people were totally impoverished when their working lives ended".

Super has always been paid for by current production. However you finingle it financially, whether through current taxation or savings, it still comes from the production of the current generation.

If we want to keep super affordable we should tax the current generation to invest in a sustainable future. Invest in energy, housing, education  and other  infrastructure so that we can keep all our people. Not in financial ponzi schemes which will fall over in the next GFC.

http://bowalleyroad.blogspot.co.nz/

""Because our kids can’t afford to buy houses, we bought houses for them to live in using the equity from our house, and now all our money is tied up in mortgages. At the same time, we’re supporting our parents in their old age.

That’s how life is and always has been, for most of us. Our parents worked to give us a decent start in life, and we worked hard so our kids could have a fair go. We’re looking after our parents in their old age. We hope we’ll be looked after in our old age.

What about this is “intergenerational theft”?""

But. We can avoid the whole concept of retirement, intergenerational fairness and all the other sticking points by accepting that everyone in our society is entitled to a liveable share  in the society they and their ancestors have built up.

Whether you call it a Universal income,  Guaranteed minimum income (GMI) or a personal shareholder payment it is the same thing.

Replace all welfare, social insurance and pensions with a GMI.

We also get to solve many other problems such as child poverty, the unfairness of a present welfare system, and making our society more sustainable,   at the same time.

http://www.sott.net/articles/show/235840-A-Town-Without-Poverty-Canada-s-Guaranteed-Income-Experiment

""Initially, the Mincome program was conceived as a labour market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work.

It turns out they did.

Only two segments of Dauphin's labour force worked less as a result of Mincome - new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren't under as much pressure to support their families.

The end result was that they spent more time at school and more teenagers graduated. Those who continued to work were given more opportunities to choose what type of work they did"".

http://thestandard.org.nz/key-on-the-nation/comment-page-1/#comment-483385  The best way to deal with any problem is to eliminate it at root. The best way to deal with ‘retirement’ as a problem is to eliminate the entire concept. No I’m not being extreme.

The simple answer is a Universal Income""

http://kjt-kt.blogspot.co.nz/2011/06/on-retirement-pensions-and-age-of.html

""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"".

Money and Debt. Explained by a 12 year old.

Kia-ora

A 12 year old Girl explains what economists will not.

Funny how a 12 year old can have a much better and clearer idea than all those university educated economists.

Or maybe they do, but know they will not be paid for questioning the current paradigm.

Note; New Zealand's Government, in the 30's, extracted New Zealand from the great depression, well before most others, by issuing Government money for public works and stimulus.

Poverty in New Zealand.

Kia-ora

One of the biggest indictments of our current economic dogma is the number of people, in the worlds richest nations, living in poverty.

What comes first is POVERTY.

Poverty is what makes “breeding” for a living seem like a good option.
Poverty is what causes all the poor outcomes to the children of teenage mums.
Poverty is what causes people to be caught in a trap of continuing poverty.

We are never going to solve problems caused by poverty by making people poorer.

Social security and minimum wages that are so low, there is almost no chance of climbing out of the poverty trap, causes  the problems.

Abatement rates for those earning a bit of money while on social security are higher than those for millionaires.
A two tier education system is going to make escape from poverty even harder.

Low wages are not even good capitalism. “Businesses that cannot meet the costs of the resources they use should be allowed to fail, so others can make better use of the resources/labour”.
Every business paying low wages means there is little demand. Hurting all business.
“You should pay your workers fairly because they are the source of your wealth” Adam Smith.

Three decades of Neo-Liberal meanness is coming back to bite us. And the right want to make the victims lives harder.

A guaranteed minimum income, national super, has succeeded in practically eliminating poverty in the over 65′s. Less than 3% live in poverty, and that most likely is self inflicted.

If we are serious in eliminating poverty amongst children, 20% living in poverty, we would extend the GMI idea, that has been so successful with the elderly, to young people.

On Austerity

Kia-ora

NZ, and much of the rest of the world,  has a whole generation of managers, cannot call them leaders, who have no vision apart from cutting staff, costs and services.

It was an accountant who told me once, "do not put an accountant in charge, they know the cost of everything, and the value of nothing".

Then they act surprised when their skilled staff head for Australia, their customers head elsewhere and their business tanks.

The same logic has now been applied to the whole country.

House Price Inflation

Kia-ora

House price Inflation

 

It is a conventional economics axiom that increasing the money supply without a concomitant increase in production causes inflation.

In the last thirtyfive years we have had low inflation in  wages. 

Essentials, including  land , and thence housing and farm prices, have gone up many times the rate of wage rises. 

Land inflation is driven by private Banking's incentive to print money.  The more money they supply the more interest they can make.

Unfortunately, there is also a strong natural incentive  to lend only on solid security, such as land and buildings.

Banks know better than anyone the inherent insecurity and instability of financial instruments, including shares.

Mortgage law in most Western countries  favours lending on land. Unlike other investments, or lending, if the value of the security, land,  goes down, the borrower is still liable for the full amount of the loan and interest. The bank is indemnified against loss.

For example, in New Zealand, the bank has priority over all other creditors, including contractors.

Lending on business and other assets does not offer the same security. The bank has to wait in line with other creditors and, normally,  cannot continue claims in excess of their proportion of the sale.

Banks, while  reluctant to risk their own money, are happy to risk small savers investments.  Our pension funds, bank deposits and savings.

These schemes, whether shares, derivatives, hedge funds or other financial instruments are designed so that banks can gamble with our money. Win or lose they always get a cut.

De-regulation of banking has removed almost all constraints on lending and the amount of wealth banks can take.

Loses come out of our pensions and other savings.  Or, if they really stuff it up, taxpayers are expected to borrow more from them to pay for it. "The bailout".

The total monetary value of financial instruments and debt is now so great that a crash, or super inflation, is inevitable if it is ever fully spent on real production.

Does anyone really think that infinitely compounding interest is possible in a world with finite resources.

While we lose our savings, houses and farms, bankers still get richer.

Given the difficulty in obtaining bank finance without land as security, favourable tax treatments (in Western countries   for banks,  homeowners, landowners and farmers ), incentives for banks to avoid  risks inherent in other investment  (The inevitable crash of Banker's ponzi schemes and the likely devaluation of currency denominated investments) it is not surprising that  investors prefer land.

The Chinese Government buying up land worldwide with US dollars, before they become worthless, is only a minor example.

Hence land prices rising much faster than wages.

Our economy, along with most other Western economies has been skewed, towards speculation in existing assets, by banks following their own self interest. The "invisible hand" has failed