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Originally enacted, as a circuit breaker, to cap excessive inflation in the 80's, politicians have kept it, long past its use by date, because in their limited view, what works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.

Living wages.

Kia-ora

One of the "grass roots" initiatives that has arisen partly out of the occupy movement is The living wage movement. Living Wage

Predictably those who award themselves 100k bonuses and 17% pay rises, while dodging taxes are opposed.

Zetetic on a living wage.

"Don’t you love hearing the rich say the working poor can’t have more pay? The faux concern that higher wages cost jobs from the same people who support huge executive pay packets and tax cuts? If you really believed higher wages meant fewer jobs, you would cut the CEO’s pay in half, not dick around over a few dollars an hour for real workers. (Emphasis mine).

Of course, the truth is more money in working people’s hands means more demand for the basics, meaning more jobs. It’s well-established empirical fact. Anyone who argues otherwise is just using a false justification that masks their real – much less altruistic reasons – for wanting the poor to stay poor.""

 How, if low wages are good for the economy, do the  wealthiest justify awarding themselves higher pay while the rest of us have pay cuts.?
 We have a shortage of skilled technicians and trades in New Zealand. How is it econmically justified that their pay has been cut year by year, while financial finaglers, directors and "managers' where there is no shortage continually award themselves more pay? Japan and Germany seem to find competent managers, with pay differentials much less than ours.
How do managers, bankers or politicians, and other non-producing parasites, sleep at night when they collect 100's of thousands a year and put a miserly $13.50 an hour into their hard workers pay packets.

 At the same time, in New Zealand, half of our wealtheist people pay little or no tax. Wealthy dodge tax
One of the main reasons the PIG's went under is the lack of tax take from the wealthy. In Greece dodging taxes was a national sport. In New Zealand we just make the wealthy avoiding paying for the social and natural capital they use, legal.

National's race to the Third World.

Kia-ora

The-race-to-the-bottom

National has re-introduced youth rates.
At a level it is not possible for a youth to live on.


Pretending  that it will help unemployment.
In reality it is just another ploy in their attempt to satisfy their large corporate donors, by driving wages down to third world levels.

Young people being expected to subsidise their employers, even more than they are already, with the inadequate minimum wage, is not going to make for more employment.

There is a justification for a lower wage when the employer is contributing towards apprenticeship training for a valuable career. Not for, no future, McJobs.


National shuffling the deck chairs again while the ship heads for the icebergs.


Base-wage-for-youth-is-a-joke
 "The Government hasn't a clue about what to do about the job market, we can at least agree on that. The best they can do is play up to the most blinkered members of their congregation. They pulled the same stunt a while back with their 89-day sacking law, at the time spouting how much it would help youth into jobs. Result? Well, the youth unemployment rate is still a horror show and unprecedented numbers of youngsters are migrating to Aussie".


Wages are already too low. Enabling multinational employers to remove too much money from NZ.

Or Maybe Richard Boock has it right.
 "Slashing the minimum wage for teenage workers will create jobs? What nonsense, it's simply a case of the most vulnerable being sold off so the Government can keep its fat cats purring. It isn't a helping hand for the youth market, it's just a cheap and nasty sop to employers".

This will bite NZ business on the butt. Employees, especially young ones, are also paying customers.

NZ employers have already managed to shuffle off most of their training costs onto employees and tax payers. What more do they need.

Slaves!

Oh! I forgot. Slaves actually cost more, as you have to pay enough to feed and house them.

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

On Education.

Kia-ora


 Anthony Robins in The Standard.
http://thestandard.org.nz/education-and-poverty/
“Claiming that poverty is no excuse for student failure trivializes the damage caused by years of actions and inactions that have widened the gaps between rich and poor communities. Good schools aren’t molded through harsh sanctions, private takeovers, or even soaring rhetoric. They emerge from healthy, stable communities. That is, they emerge from a commitment to justice.”

Teachers can only do so much. A society that does not value and encourage all their children will fail

Police Assault Protesters in New Zealand.

Kia Ora

Recent protests, against Government policy, by Students in Auckland were greeted by an overwhelming and aggressive police presence.

New Zealand Police have just made it clear they consider there is no right to protest, if it “inconveniences” anyone.
In fact the students were going about their lawful business. PROTESTING IS STILL LEGAL IN NZ.
The police obstructed members of the public and assaulted them. WHILE THEY WERE GOING ABOUT LAWFUL BUSINESS.

Just like police in the UK.

Of course knowing you are likely to be violently assaulted by police, if you protest, has rather a dampening effect on free speech.

No doubt that is what is intended by the police overreaction.

Practicing for when the population finally realises, like the Greeks,  how much they have been lied to and exploited.

How long before we see the other repressive actions of an authoritarian dictatorship, to legitimate dissent,  here. Like the "kettling" in the UK.

What is Neo-Liberalism?

Kia-ora

What is Neo-Liberalism.

Neo-Liberalism is a moral and intellectual justification for greed.

A way for those few who accumulate wealth, by impoverishing many, to justify themselves, and keep those they are stealing from docile and compliant.

This purpose for centuries has been fulfilled by religion.

We still see echo's of the religious  attitudes. The idea that the poor are poor because of personal defects,  American exceptionalism, the banker who reckons, "God wanted me to be rich",  Ayn Rands "wealth creators".

Neo-liberals outwardly believe in small Government, minimal regulation, taxation and social security,  individual freedom and responsibility and the primacy of the market in fostering economic efficiency.

In fact their leaders and intellectuals believe in anything which enables them to accumulate wealth at the expense of the rest of us.

Neo-Liberalism would be more appropriately called Neo-conservatism. It is an attempt to return to pre-enlightenment times when the idea of "each is born into their proper place" was undisputed.

Neo-Liberalism has become common usage, unfortunately we are stuck with it.

Neo-Liberalism itself has all the characteristics of blind belief and faith inherent in religion.

Despite its only success being in making a very few people wealthier, millions of people, including most politicians, blindly adhere to the faith. 

http://nzagainstthecurrent.blogspot.co.nz/2011/03/junk-science-voodoo-economics.html

'It doesn't seem to matter that they NEVER get it right. It doesn't seem to matter they are promoting economic theories that are junk. But unlike Ring's quackery, the quackery of neoliberalism is treated with reverence, it is ascribed legitimacy'. 

 "The first of these shifts was the Great Depression or, more precisely, the feckless response of both American mainstream political parties to the economic collapse that followed the 1929 stock market crash. In the crucial first years after the crash, Democrats and Republicans alike embraced exactly the same policies they are embracing in today’s economic troubles, with exactly the same lack of success, and showed exactly the same unwillingness to abandon failed policies in the face of economic disaster. Then as now, the federal government launched a program to bail out big banks and corporations—it was called the Reconstruction Finance Corporation in those days—and pumped dizzying amounts of money into the upper end of the economy in the belief, real or feigned, that the money would work its way down the pyramid, which of course it didn’t do. Then as now, politicians used the shibboleth of a balanced budget to demand austerity for everybody but the rich, and cut exactly those programs which could have helped families caught by hard times. Then as now, things got worse while the media insisted that they were getting better, and the mounting evidence that policies weren’t working was treated as proof that the same policies had to be pursued even more forcefully." (John Micheal Greer).

Their Apostles are Adam Smith,  Ayn Rand, Von Mises,  the Austrian, and Freidman, the Chicago,  schools of economics.

Adam Smith's "invisible hand" is often quoted. Adam Smith's "you should pay your workers fairly because they are the source of your wealth" and "tax capital and land instead of workers and entrepreneurs" is, of course, ignored.

Von Mises and Freidman advocate a totally unregulated market and a Government as one adherent famously said, "that you could drown in a bathtub". Except for police and military to protect their wealth, of course! http://en.wikipedia.org/wiki/Grover_Norquist

Ayn Rand considered the owners of capital "wealth creators" although she had to live off the real wealth creators, the rest of us, towards the end of her life.

http://www.alternet.org/story/154153/how_the_1_destroys_jobs_and_the_real_heroes_are_everyday_people

"So before we consider having another trickle-downer in the White House, let’s talk about the failure of this idea and why if you want to see a real job creator, you should look in the mirror".

In fact they support their own freedom to make money regardless of social, environmental or economic effects. At the same time restricting individual freedom to protest, or co-operate to challenge their primacy.

Supporters do not seem to see the conflict between saying they support  individual freedom  while at the same time restricting the majorities individual freedom to withdraw their labour or protest. These freedoms are restricted, often violently.

http://bowalleyroad.blogspot.co.nz/2012/04/protecting-winning-ticket.html

"Let’s recap. You’re rich, and you want to stay that way. So, to protect your ticket; to safeguard your $50 million prize; you need to find a way to eliminate, or at least minimise, the threats posed by taxes, unions, and democracy. What’s your strategy?

Essentially, there’s only one winning strategy. It requires you to convince all those who are not wealthy that whatever status and security they do enjoy is the result of your own superior imagination, risk-taking and skill. You have to paint yourself and your fellow millionaires and billionaires as a “wealth creators” and, more importantly, “job creators”. You have to convince your fellow citizens that any attempt to restrict or redistribute your wealth will not only put their jobs at risk, but that society as a whole will become poorer.

If you can convince people of these things, then they will, perfectly democratically, eliminate wealth taxes, truncate workers’ rights, and reconfigure their entire political system to favour the tiny minority fortunate enough to hold the multi-million-dollar winning tickets"

Neo-Liberalism. Like all religions, is a way for the already wealthy to delude everyone else from rebelling, so they can keep their "winning ticket".

While many followers of religions have the best of intentions, their leaders have no such illusions. The intent is to keep wealth and/or power.

The overall effect of Neo-Liberal economics is to "privatise profits while socialising the losses".

Hugely increasing inequality and economic and social dysfunction.

Country after country adopts Neo-Liberal economics and rapidly goes downhill even by Neo-Liberalism's own measures such as GDP. And we still believe it is the solution!

Compare Argentina and the BRIC countries to the Anglo Saxon countries that are slavishly following the Neo-Liberal religion.

http://krugman.blogs.nytimes.com/2011/06/23/dont-cry-for-argentina/

Truly voodoo economics.

What Our Financial Masters Really Think of Democracy.

Kia-ora

On the axed Referendum.

"In Athens, several ministers and governing party MPs called for Greek Prime Minister George Papandreou to step down in favour of a coalition national unity government that would approve Greece's bailout package without a referendum,"".

The so called representatives of the people. Do not want the people to decide on how to respond to a package.
To bail out even more bankers who made bad lending decisions and pushed prices up to increase their income..

It is becoming very obvious who the real rulers of the world are.

Revealed the capitalist network that runs the world

Despite the lip service to "Representative Democracy".

It is not the citizens of each country.

Occupy Wall Street.

Kia-ora

The response from the Neo-Liberal establishment to OWS, shows they know how effective  bottom up changes can be.

Why we should protest.

Management 101. Effective change management.
1. Establish a consensus that there is a need for change.
2. Figure out what needs to be changed. Again by consensus.
3. Invite ideas and positive changes from the shop floor.
4. Managers should act as facilitators and supporters of change agents.

Lasting and effective changes, need to have the active support of the majority of the workforce, at all levels.
Authoritarian managers are rarely effective at making lasting changes. People always find a way to derail changes they do not support.

Despite some of the best research on Management and Leadership coming from the USA. Places like the USA, NZ and UK ignore it. Leaving effective implementation to Germany, Japan and Scandinavia.

It is strange that despite all the research that says they are less effective, the cult of the Authoritarian Manager/National Leader still remains. Maybe the answer lies in the research about Authoritarian followers. Those who like certainty, even if it is leading them into a country like Somalia.

OWS is at stage 1 at present.

The first stage.

What is frightening politicians, who dream of absolute power, is they know OWS will grow.

We will soon see the solution is democracy. Very scary for those who have been ripping us of while accepting a Parliamentary salary from us.

Why should we leave our future up to a power hungry, greedy minority.

We are the 99%.

In the meantime. We can do our part in supporting stage one. Worldwide. 
Occupy Wall Street.

The Rena. A Neo-Liberal failure.

Kia-ora

Nearly two weeks ago now a container vessel grounded on Astrolobe  reef near Tauranga, New Zealand.

Shipping accidents like the Rena are entirely at the door of Neo-Liberal economics.

The foreseeable results   of Globalisation, de-regulation, the endless search for the cheapest, the socialisation of risks and the privatisation of benefits..

Tired, overstressed, low paid  crews,  cheaply built and maintained ships, inadequate or ignored regulation and excessive workloads are the norm at sea.

Flags of convenience exist entirely so that shipping companies, and shippers, can reduce the costs: of corporate and income taxes, safety  standards, operating standards, crew conditions and wages and build standards of shipping.

They allow a competitive race to the bottom to see who can become the cheapest.

There is no reason whatsoever to use a flag of convenience if you intend to operate a vessel to a high standard. There would not be any cost savings.

The constant struggle to maintain cheaply built ships, designed and built for a 15 year life. Is bad enough when they are new.  5 or 10 years  beyound their design life , keeping them going is a 24 hour a day job.

Low wages, mean that high quality well trained crew find other work ashore or in higher paid work like the oil industry.

Masters and Chief engineers are often the only properly trained and skilled members of the crew, with the numbers made up of cheap labour with dodgy qualifications.

It is common for crew to be on board working shifts with less tha 8 hours off a day for more than 9 months.

Training standards are variable, with a noticeable drop in the standard of training, even from first world countries.  At the same time crew numbers have been dropped so there are not the personnel available to babysit and train.

Seafarers are expected to rest in ships with levels of noise and vibration that would have been totally unacceptable thirty years ago.  Ashore in NZ it is illegal to get people to work, let alone sleep, in those conditions

In New Zealand, Masters who refuse to sail because of broken equipment or rough weather and crew members who refuse to falsify rest hour,  maintenance, safety  and leave records are protected by our employment laws.

A sacking for those reasons, in New Zealand,  would be a legitimate case for unjustified dismissal..

 On FOC ships  they are sacked or their contracts are simply not renewed.

The worst of it, since the 1980's and Governments cave in to the farming lobby on Cabotage, in NZ, even local shipping companies, whatever their intentions , are also cutting standards to compete with cheap overseas shipping.

New Zealands credit downgrade. Or the Story of more Neo-Liberal economic "successes".

Kia-ora

It would be funny if it was not so serious.

NACT (New Zealand,s,  Right wing, Neo-Liberal Government) cannot even meet performance targets from, the totally discredited, "credit rating" agencies.
Agencies which are on the side of the same economic dogma as NACT.

This could have been avoided simply by legislating that no private finance companies would be bailed out.

The New Zealand Government, like, the other failing States, Ireland, UK, Greece and the US etc, has made it obvious that private finance debt is a taxpayer liability.

Look to Argentina and Iceland to see the benefits of telling the banks to get stuffed. Argentina, one of the worlds fastest growth economies since 2002, when they told the banks to take a bath.

Noting that most lenders to Governments have taken no notice of States credit rating downgrades recently.
Government bonds are still considered much safer than private lending.

One of the reasons for the continuing recession in the USA.  The cashed up  prefer to lend to the Government instead of industry and development. Government lending at 0% intended as a stimulus is being invested in 3% yeald Government bonds.

Meanwhile the Media have had almost no coverage of Nationals failure to succeed, even under their own terms. If we had a credit downgrade under Labour it would have been frontline news.

A rugby players nuts are more important!

You did not do it on your own.

Kia-ora

Search and surveillance

Kia-ora

We are a passive lot. Our rights to privacy, and freedom from unreasonable search and seizure, have been slowly frittered away by various Governments over the years. while rights to freedom from surveillance without cause have been taken away.
The media have mostly been silent. When they haven’t been actively supporting it, using, mostly, specious excuses about cutting crime.
The skynet bill and the new search and surveillance bill are unacceptable infringements on our rights to freedom from search and seizure.
Already existing laws about surveillance and airport and port security also exceed the rights of search, of ordinary citizens, that authorities should have.

In the interests of corporates and "supposedly" fighting crime, or terrorism, our rights to privacy, freedom from unreasonable search and seizure and right to protest are being steadily reduced.

The potential for Government and police, to misuse these laws has already become apparent, with over 50 cases where the police exceeded their legal powers. Instead of charging the police responsible, with breaking the law. The Government proposes to make these acts retrospectively legal.

On internet Surveillance and Interception.

Kia-ora

Years ago, when you applied for a marine radio operators licence, you had to sign a statement that you would maintain "secrecy of correspondence".

"Secrecy of correspondence" was the legal principle that, "Under no circumstances would you divulge the contents of any radio message to a third party".

In other words privacy of communication was sacrosanct.  All radio operators hearing a message,  including Government radio operators , were only allowed to divulge the existence or the contents of a radio message to "the proper recipient".

I am sure this was often honoured in the breach by intelligence agencies.  But the principle that an individuals right to privacy overrode any other interests ,for any reason, was there.

Similarly it has been a legal principle,  in most "democratic" States, that phone calls can only be intercepted on reasonable suspicion of criminal activity.

Usually by a judicial or court order. Police are not allowed to listen to private phone calls at random.

WHY THEN! Are we allowing the State, and even worse, private ISP companies and copyright holders to breach a our privacy IN CASE WE ARE BREAKING THE LAW.

WE DO NOT ALLOW THEM TO BREACH OUR "PRIVACY OF COMMUNICATION", ON THE TELEPHONE, LIKE THIS.

Sure they have all sort of laudable reasons. Protecting copyright holders, attempting to limit paedophilia and catching organised criminals. But anyone, who wants to intercept other forms of communication to prevent these crimes, has to see a judge.

Of course reasonable people support intercepting paedophiles and terrorists on the internet. Who wouldn't.

However, those people can easily find ways and means to bypass internet scrutiny.

While the rest of us have our rights to privacy and free and open communication with our friends trampled on.

Once a Government starts internet scrutiny do you think they will stop with intercepting illegal traffic. How long before they intercept Wikileaks, The New Zealand Socialist Party. The Labour party!  Anything which embarrasses them!

How long before the SIS and police start making lists.

Of people who are not comfortable with the present Government.

They have done it before.

New Zealand at the Crossroads

Kia-ora

 The NYT on the "success" of Neo-Liberalism.

As "No Right Turn" says this graphic is "an appalling indictment of Neo-Liberalism".

In New Zealand we have seen the effects just this year. Over 17% increase in wealth for the top few percent while 200 000 children live in relative poverty.

The pattern in New Zealand, since our great Neo-Liberal experiment, following the USA, Ireland and UK, has been the same.

 Coddling the rich is destroying the American dream.

"No matter how many times it's said, lowering tax rates for the highest income Americans does not create jobs or stimulate the economy. In fact, a detailed look reveals that the overall economy does slightly better when taxes at the top are significantly higher. This also holds true on the state level, as states with higher top personal tax rates have growth rates and median incomes that average greater than those with low (or even no) taxes. No matter how many times the experiment is repeated, or how long you extend the results, cutting taxes for the wealthy does not stimulate growth."

Most of the wealth earned by Americans went to corporates.
"Corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income".

In New Zealand cutting taxes for the wealthy was supposed to stimulate the economy. Since the first round of high end tax cuts,  investment in the productive economy, wages and manufacturing, in New Zealand, stagnated, and capital flew to gambles on offshore markets.

Decimation of Union and employee rights, and cuts in Government spending  has resulted in huge drops in real income, for all but a few New Zealanders.

New Zealand is at the crossroads.
We can vote for National and ACT, and join the list of failed States like the USA and UK.

Another three years of failed Neo-Liberal policies will destroy the country we know.

Do we want third generation unemployment and riots in the streets like the UK. Or the repressive, unequal, surveillance society the USA has become.

For the first time since 1984 we have a clear choice. Continue down a failed Neo-Liberal road, or Own our Future.

We can vote for the Greens   and Labour. For  sensible policies, which were middle of the road, before Neo- Liberal religious hysteria took over.