web analytics

A real economic plan

Written By: - Date published: 8:21 pm, October 12th, 2008 - 14 comments
Categories: economy - Tags:

One of the things that has pissed me off about MSM political analysis lately is the constant repetition of the idea that cutting taxes in a recession is all you need to do to be considered Keynesian. This is generally remarked upon in the context of National shifting their economic policy left (that “Keynesianism” and “left” are considered synonymous by the MSM is another bugbear of mine but I’ll address that at another time).

Today we got a real taste of proper Keynesianism. Clark has announced a far-reaching training policy which would ensure workers who lose their jobs in the upcoming economic downturn will get funded to increase their skills. She also talked about bringing infrastructure projects forward.

Labour’s economic plan is becoming obvious: use unemployment as an opportunity to upskill the country’s workforce and build infrastructure while the demand for the resources to do it is low in the private sector (and thus it’s cheap to do). The end result is twofold in that you moderate the impact of the recession by putting public money into long-term spending projects and into the pockets of people who are increasing their skills but you also create a more skilled and productive workforce and provide the infrastructure to support productive capital.

That means when the next boom comes the country is in a position to take full advantage of it through workers who are skilled and productive and infrastructure that has the capacity to facilitate increased growth.

The contrast of this approach is the way National dealt with the recession of the 1990’s. During that downturn they cut government spending, abolished the apprenticeship system and introduced the EFTs system and student loans. They also cut tax for the wealthiest New Zealanders.

By doing so they expected the market to provide and business to sustain itself through consumer spending (a similar view to G.W. Bush’s when, in the wake of 911, he claimed true patriots should get out and shop).

What the market provided was another story altogether. Workers didn’t have access to training. Tertiary education ended up heading down the path of twilight golf and the rich didn’t manage to shop us out of recession no matter how much they tried (in fact we grew a huge low-wage low-skill service sector, massive income disparity and whopping levels of private debt instead).

That meant that when the good times swung back around we didn’t have the skills to take advantage of them or the transport system to shift labour and goods efficently or the telecommunications system to engage in full e-commerce or even a reliable electrical network.

Looking at National this time around I don’t have much trust in them to do anything differently. On agenda this morning Bill English was espousing the same failed trickle-down theories they were so fond of last time and they have shown they are willing to cut investment in R&D and the capital fund that is Kiwisaver just to cut taxes for the rich. They’ve also banged the drum about reducing government spending so much that it would be extremely surprising if they didn’t use a deepened recession as an excuse to cut as deep as they could.

I don’t give Labour praise lightly but I think today Clark showed that they have the best answer for the hard times to come. National has only the failed policies of the past.

14 comments on “A real economic plan”

  1. randal 1

    Irishbill you must know by now that the meedia in new zealand are the worst educated meedia in the world and the laziest. they are handpicked for their hair and teeth at j school and need no other qualification that to be a right wing boilsucker. anywhere esle in the world they would be laughed out of the room. after the election I would think it is time for some of these hothouse flowers to get a real job. they have been hanging around for far too long without ever having done anything excpet shill for some foreign owner.

  2. milo 2

    So you’re saying that Labour wants to build more roads than National does?

    Have you told the Watermelons?

  3. my understanding is its mostly rail infrastructure, public transport, not just more roads – but they will also be speeding up existing road projects – transmission gully, the western ring route. Oh, they say they will speed up sewerage work, school building, announce some housing initiatives and give more to tackling erosion.

  4. randal 4

    milo, the most obvious thing about tory trolls is their unswerving ability to put words into other peoples mouths without ever saying anything themselves. do you have self adjusting tight underpants milo. have you told the beetroots?

  5. DSC 08 5

    Won’t work.
    Top down Keynesian job creation at this point will not get past the wealth consolidation that has built up in New Zealand society not eventaking into account the futileness of trying shape an economy with free-trade deals to China and America just landed.
    Even the benefit of being in a favoured position of a major war outcome wouldn’t give much buffer this time before the inevitable inflating your way out of debt and sell-off of New Zealand’s remaining assets with the resulting privitisation by large global/faceless corporations occurs.

    The only solution out of the current predicament is the Social Credit dividend based economy directly to all citizens. It is the only way to stop inflation while enabling us to utilise and reclaim New Zealand resources.

    Labour has destroyed New Zealand society, just a tad slower than National would prefer.

  6. lprent 6

    Ah DSC – that psuedonym is a cutting it a bit close to being an election advertisement. Which I don’t care about too much as this is a blog. However I tend to get a bit unhappy about commentators advertising here – it tends to escalate. You notice that this site doesn’t have any adverts.. However you didn’t give a web address and the party is a bit obscure these days so I’m not going to jump up and down as hard as I do when there is clear link-whoring.

    I’d prefer it if you picked another psuedonym though. Let your thoughts do the advertising.

  7. maxq 7

    Yawn – you still havent explained what you consider Keynesian economic policy to be irishbill but no matter, helen has made a non comment about worker training schemes.

    It worked well at the Wananga in Hamilton eh!

    Let it rest, labours time is over, the country are sick of their lies.

  8. T-rex 8

    “Let it rest, labours time is over, the country are sick of their lies.”

    Actually max, it appears to be Nationals lies that the country is sick of… which makes sense, given that they tell vastly more of them. But don’t let me stop you playing that tiny violin.

  9. r0b 9

    For those Gnats who have been claiming that “Labour has no policy”, welcome back to the real world. For those who are looking for leadership in these difficult times, the choice is now clear.

    John Armstrong gets it (excerpts):

    If actions speak louder than words, Labour was the winner on Day One of the official election campaign – game, set and match.

    Key’s earlier speech at National’s campaign opening in Auckland’s SkyCity Convention Centre said nothing new on economic policy. In fact, it said nothing new about anything.

    If that was not bad enough, Labour was getting ready to lay out something really meaty just a few blocks away in the Auckland Town Hall.

    There, Helen Clark trumped Key by delivering the recovery package he had been demanding, including contingency plans to save jobs and the promise of a mini-budget in December.

    The upshot was that Labour looked like it was governing; National looked complacent and flat-footed.

  10. T-rex 10

    “the choice is now clear.”

    As opposed to yesterday, when…

    It reminds me of this cartoon: Overcompensating

    which I may have already linked to on account of it being awesome.

    .

    I think what you point out above rOb highlights what has been said from the start, which is that National (particularly Key) were NEVER going to be any damn good at governing because they don’t actually have any vision, values, or plan of their own – they were just giving people what focus groups told them they wanted (and ignoring the cost).

    Did you see McCain the other night? “I know how to fix the economy. I know how. I do. And I’ll do it. And Osama Bin Laden? I know how to catch him too. I’ll get it done”. Then Bush comes on to reassure all by “Vowing” to stabilise the economy. As you’ll recall from previous exploits, George Bushes vows are money in the bank.

    A turn of phrase that, curiously, is actually accurate in the present financial market 😉

    I’m going to go and buy some shares on Clark as PM.

  11. lprent 12

    😉 too late

  12. T-rex 13

    Yeah… the only time I really considered it was back in late June. I mean people selling at 30% were just dumb, I think there may have been some confusion over the difference between “likely share of the vote” and “likelyhood of forming the government”. Couldn’t be bothered getting involved for the sums in play (especially since I’ve got much better things to do with my time than get involved in zero-sum games, especially fantasy ones where the liquidity added serves no useful purpose), but still interesting to look at.

    I just went to look at kiwiblog to see if there was anything on the rightydoompolls, couldn’t see anything. Stunner. Has anyone told Farrar that his logo looks almost EXACTLY like a steaming pile of sh*t when it’s shrunk to taskbar size? I mean he MUST know, right? It’s not like the resemblance is subtle. I, of course, think it’s highly appropriate, but… weird.

  13. bill brown 14

    T-rex,

    Sorry mate, I sucked up all those cheap shares months ago.

Links to post

Recent Comments

Recent Posts

  • Regions miss out again in Joyce’s Koru Lounge Fund
      The regions have missed out yet again with Steven Joyce offering just $10m a year for key regional development projects while trumpeting a bunch of re-heated announcements, says Labour’s Economic Development spokesperson David Clark. “The dairy downturn has put… ...
    21 hours ago
  • Children’s Commissioner misses out in Budget
      The Office of the Children’s Commissioner has missed out on a much needed boost in this year’s Budget, meaning they will be forced to continue their reduced monitoring role of CYFs residences, says Labour’s spokesperson for Children Jacinda Ardern. … ...
    23 hours ago
  • Communities miss out in Budget
    Budget 2017 has left community and NGO providers feeling exposed about the services they provide to vulnerable families especially in smaller towns and communities, says Labour’s Whānau Ora Spokesperson Nanaia Mahuta. “Approximately $40m will go into Whānau Ora to work… ...
    2 days ago
  • Budget2016: Two Worlds
    Sometimes I feel as if I live in two worlds. The world created by the National Government where everything is great and they’re doing a great job and the world as seen through the eyes of child advocates, community workers,… ...
    GreensBy Jan Logie
    2 days ago
  • Parekura would be proud – MTS gets boost
    The Labour Party is ecstatic that the Māori Party have shown support for one of Labour’s proudest policies, says Labour’s Māori Broadcasting Spokesperson Peeni Henare.  “The Māori Television Service was launched in 2004 by the late Hon Parekura Horomia. ...
    2 days ago
  • Māori housing in state of emergency
    The Government needs to declare a state of emergency for Māori Housing, says Labour’s Māori Development spokesperson and Te Tai Tokerau MP Kelvin Davis. “The extra $3 million a year Māori Housing Network fund will not scratch the surface in… ...
    2 days ago
  • State house sell off in disarray after provider pulls out
     The Government should cancel its planned sell-off of state houses after the second big community housing provider pulled out leaving the process in disarray, says Labour’s Housing spokesperson Phil Twyford.  “It is time for the Government to back away from… ...
    2 days ago
  • Nothing in Budget to help police to solve crime
    The Police Minister has failed to make communities safer with virtually no new money in yesterday’s Budget for police to address the appalling burglary resolution rates, says Labour’s Police spokesperson Stuart Nash.  “It’s a disgrace there’s no money or aspiration… ...
    2 days ago
  • Blog – Budget 2016: What about ordinary working people?
    Ordinary working New Zealanders don’t fare very well from this Budget. Setting aside the spin from the Government, it contains a lot to be concerned about and a fudging of the numbers. Green Party workplace relations spokesperson Denise Roche For… ...
    GreensBy Denise Roche
    2 days ago
  • Real wages go backwards for next two years
    New Zealanders’ real wages will fall for the next two years as the cost of living outpaces forecast pay rises, says Leader of the Opposition Andrew Little. “New Zealanders have been doing it tough for far too long. They expect… ...
    2 days ago
  • The Attack on Public Education – by a thousand cuts
    Budget 2016 is another step towards the free public education system being a memory from the past. The Budget freezes the operations grant for schools and does not sufficiently cover the real increase in numbers of students entering the education system.… ...
    GreensBy Catherine Delahunty
    2 days ago
  • The Attack on Public Education – by a thousand cuts
    Budget 2016 is another step towards the free public education system being a memory from the past. The Budget freezes the operations grant for schools and does not sufficiently cover the real increase in numbers of students entering the education system.… ...
    GreensBy Catherine Delahunty
    2 days ago
  • The give with one hand – take with the other Budget
    The Minister of Health has pumped out media releases to 20 District Health Boards heralding increases in funding for their regions, says Labour’s Health spokesperson Annette King. “But when you add population growth and inflation into the figures you get… ...
    2 days ago
  • Budget offers no hope of fixing housing crisis
    The Budget’s underwhelming housing measures will give New Zealanders no hope that National is capable of fixing the housing crisis, Labour’s Housing spokesperson Phil Twyford says. “There isn’t a scrap of an idea to help desperate young Kiwi families into… ...
    2 days ago
  • How the budget fails new New Zealanders
    Greens co-leader James Shaw was absolutely correct to say the 2016 budget is just papering over the cracks. There’s nothing in this budget to increase wages, address inequal pay for carers or deal with the shocking pay rates and employment… ...
    GreensBy Denise Roche
    3 days ago
  • Parents will pay more as school budgets frozen
    Parents will pay more for their kids’ education as a result of this year’s Budget after the Government froze operational funding for schools, Labour’s Education spokesperson Chris Hipkins says. “This means schools are effectively going backwards. They will need to… ...
    3 days ago
  • Sticking Plaster Budget fails the test
    Bill English’s penultimate Budget fails to tackle the structural challenges facing the economy – a housing crisis, rising unemployment, underfunded health and creaking infrastructure, says Labour’s Finance spokesperson Grant Robertson. “This Budget applies a sticking plaster to a compound fracture.… ...
    3 days ago
  • John Key fails middle New Zealand with no fix for housing crisis, more underfunding of health
    Middle New Zealand has again missed out in this year’s Budget with not a single fix for the housing crisis, and health and education woefully underfunded again, Leader of the Opposition Andrew Little says. “This Budget is just a patchwork… ...
    3 days ago
  • Labour Bill would back Kiwi jobs
    The Government’s $40 billion of buying power would go towards backing Kiwi businesses and jobs under a Labour Member’s Bill which will be debated by Parliament, Leader of the Opposition Andrew Little says. “My Bill – which was pulled from… ...
    3 days ago
  • Julie Anne Genter: My Budget 2016 wish is fairness
    When my parents first visited me in Auckland ten years ago, they remarked on how there were no homeless people on the streets. Coming from Los Angeles, they were used to seeing the impacts of horrendous inequality and a lack… ...
    GreensBy Julie Anne Genter
    3 days ago
  • Steffan Browning: Pesticide reduction and Organic Growth Strategy in Budget 2016
    Pesticide reduction The Budget is an opportunity for the Government to launch a pesticide reduction strategy that multiplies the Environmental Protection Authority’s (EPA) and the Ministry for Primary Industries’ capacity to reassess pesticides and other toxins.  The Agricultural Compounds and… ...
    GreensBy Steffan Browning
    3 days ago
  • Steffan Browning: Pesticide reduction and Organic Growth Strategy in Budget 2016
    Pesticide reduction The Budget is an opportunity for the Government to launch a pesticide reduction strategy that multiplies the Environmental Protection Authority’s (EPA) and the Ministry for Primary Industries’ capacity to reassess pesticides and other toxins.  The Agricultural Compounds and… ...
    GreensBy Steffan Browning
    3 days ago
  • Minister won’t fess up on wrong figures
    The Minister of Health was caught out telling porkies in Parliament today when he was asked about the number of people getting access to mental health and addiction services, says Labour’s Health spokesperson Annette King. ...
    4 days ago
  • Budget 2016 and our LGBTQI communities
    LGBTI people make up about a tenth of our population, and our communities face a unique set of needs and challenges. These challenges are caused or exacerbated by discrimination, invisibility and barriers to appropriate support. We have a long way… ...
    GreensBy Jan Logie
    4 days ago
  • Budget 2016 and our LGBTQI communities
    LGBTI people make up about a tenth of our population, and our communities face a unique set of needs and challenges. These challenges are caused or exacerbated by discrimination, invisibility and barriers to appropriate support. We have a long way… ...
    GreensBy Jan Logie
    4 days ago
  • Scrambled announcement policy on the hoof
    Paula Bennett’s scrambled desperate announcement that she will pay homeless people to move to the regions is just the latest evidence of the disarray this Government’s housing policy is in, Leader of the Opposition Andrew Little says. “This is policy… ...
    4 days ago
  • Police Minister admits resolution rates fall short of expectation
    Police Minister Judith Collins has admitted in Parliament current burglary resolution rates are not meeting the expectations of our communities, says Labour’s Police spokesman Stuart Nash “Out of 284 police stations in New Zealand in 2015, 24 stations recorded zero… ...
    4 days ago
  • Mojo Mathers: A better deal for animals in Budget 2016
    Currently we are failing animals in NZ. On the face of it farmed and domestic animals in this country have strong legal protection from abuse, cruelty and neglect. In reality it seems that only the very worst, most extreme cases… ...
    GreensBy Mojo Mathers
    4 days ago
  • Metiria Turei: What we need from Budget 2016
    Every family deserves a warm decent home.  Everyone believes that. This housing crisis is just the latest consequence of a Government who puts the interests of the few wealthy people above the needs of NZ families.  Families are doing it… ...
    GreensBy Metiria Turei
    4 days ago
  • Dairy exports fall of 11%: Budget action on diversification needed
    Dairy exports have fallen 11 per cent compared to this time last year, a fall of almost $1.5b, showing the Government must take clear action on diversifying the economy in tomorrow’s Budget, says Labour’s Trade and Export Growth spokesperson David… ...
    4 days ago
  • Investors driving families out of homes in South and West Auckland
    Investors cashing in on skyrocketing Auckland house prices are driving families out of homes in South and West Auckland and causing homeownership rates in some of our poorest suburbs to plummet, Labour’s Housing spokesperson Phil Twyford says. “New analysis shows… ...
    4 days ago
  • Budget must deliver on paid parental leave
    Budget 2016 must deliver 26 weeks paid parental leave by April 2018 – anything less will be short-changing families, says Labour MP Sue Moroney. “My Bill which is before Parliament this afternoon has majority support and does just that. I… ...
    4 days ago
  • Key’s “brain fart” on tax cuts news to English
    John Key didn’t tell his own Finance Minister he was about to go on radio and announce he wanted $3b of tax cuts, just days after Bill English ruled them out, says Labour’s Finance spokesperson Grant Robertson. “In Parliament today… ...
    5 days ago
  • What I’m looking for in Budget 2016 – A better start for our tamariki
    Ensuring the best start for our tamariki is a priority for me in everything I do. And so in Budget 2016, my first budget as an MP, I looking for the Government to make a real investment in the wellbeing… ...
    GreensBy Marama Davidson
    5 days ago
  • What I’m looking for in Budget 2016 – A better start for our tamariki
    Ensuring the best start for our tamariki is a priority for me in everything I do. And so in Budget 2016, my first budget as an MP, I looking for the Government to make a real investment in the wellbeing… ...
    GreensBy Marama Davidson
    5 days ago
  • Denise Roche: What I’m looking for in Budget 2016 Pt II
    Aotearoa’s new New Zealanders,  come to our country in vulnerable position: – often away from the culture, communities and families they know, sometimes in neighbourhoods without familiar faces and often encountering barriers to employment. With net migration at 50,000+ a… ...
    GreensBy Denise Roche
    5 days ago
  • Equal Pay and Budget 2016
    The last few years we’ve seen equal pay for women flagged as an undefined risk in the budget. This year we should expect to see this, as well as budgeted money to deliver equal pay to caregivers and funding for,… ...
    GreensBy Jan Logie
    5 days ago
  • Equal Pay and Budget 2016
    The last few years we’ve seen equal pay for women flagged as an undefined risk in the budget. This year we should expect to see this, as well as budgeted money to deliver equal pay to caregivers and funding for,… ...
    GreensBy Jan Logie
    5 days ago
  • A great Budget would
    A great Budget would embrace the challenge of our polluted rivers and move the money away from justifying the status quo water rules into cleaning up waterways. A great Budget would take the Ministry for the Environment freshwater budget and… ...
    GreensBy Catherine Delahunty
    5 days ago
  • Budget building materials policy backfires
    On the eve of this year’s Budget official figures show Nick Smith’s Budget 2014 centrepiece to reduce the cost of building materials has backfired, says Labour’s Housing spokesperson Phil Twyford. “Ministry of Business, Innovation and Employment officials have spent the… ...
    5 days ago
  • Smarter, Better, Cleaner, Stronger
    This Thursday Bill English will deliver his eighth Budget. Will it continue the trend of previous National budgets, making tertiary education less affordable, putting only token funds into innovation, and subsidising polluters? Budgets aren’t what they used to be. Once… ...
    GreensBy Gareth Hughes
    5 days ago
  • Govt must come clean on tax cuts in Budget
    National is making a mockery of the Budget process by dangling the promise of tax cuts but failing to include them in the Budget, says Labour’s Finance spokesperson Grant Robertson. “National’s tax cut promises have turned into a farce. One… ...
    6 days ago
  • Grant Robertson Pre-Budget Speech
    Today I want to talk about success. As we know success can come in many different forms, from the fact you all made it here at such an early hour on a Monday, for which I am very grateful, to… ...
    6 days ago
  • Budget must deliver for middle New Zealand
    The Government must ensure next week’s Budget stops the squeeze on middle New Zealand and delivers shared prosperity for all New Zealanders, Leader of the Opposition Andrew Little says. The call follows new research commissioned by Labour that shows working… ...
    7 days ago
  • Our housing emergency – why we have to act
    Marama and Metiria at Homes Not Cars launch On Thursday, Metiria Turei announced the Green Party’s plan to start addressing the emergency housing crisis facing our country. Too many people are without homes right now – homeless. It is the… ...
    GreensBy Marama Davidson
    1 week ago
  • Will funding boost for sexual violence services go to the right places?
    This week the Government announced $46million for sexual violence services. This announcement was a result of decades of work by advocates and everyone who submitted to the Select Committee inquiry into funding for sexual violence services that I initiated with… ...
    GreensBy Jan Logie
    1 week ago
  • Will funding boost for sexual violence services go to the right places?
    This week the Government announced $46million for sexual violence services. This announcement was a result of decades of work by advocates and everyone who submitted to the Select Committee inquiry into funding for sexual violence services that I initiated with… ...
    GreensBy Jan Logie
    1 week ago
  • Denise Roche – What I’m looking for in this year’s Budget
    Two of the things I’ll be looking for in the Budget next week are more funding for refugees and for our arts and culture sector. More funding for refugees I’m a strong supporter of the #DoubleTheQuota campaign and its goals… ...
    GreensBy Denise Roche
    1 week ago
  • Denise Roche – What I’m looking for in this year’s Budget
    Two of the things I’ll be looking for in the Budget next week are more funding for refugees and for our arts and culture sector. More funding for refugees I’m a strong supporter of the #DoubleTheQuota campaign and its goals… ...
    GreensBy Denise Roche
    1 week ago
  • Car rego victims must get a refund
    Motorists who have been overcharged for their car registration should get a refund, says Labour’s Transport spokesperson Sue Moroney.  “Minister Nikki Kaye’s ‘faulty risk’ rating scheme has blown up in her face with over 170 different models of car having… ...
    1 week ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere