web analytics
The Standard

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

  • How many victims missing out on protection?
    Hundreds of domestic abuse victims could be missing out on getting protection orders because they are unable to get legal aid, Labour’s Justice spokesperson Jacinda Ardern says.“In the last two years some 351 people who applied for legal aid for… ...
    1 day ago
  • Government kicks hardworking whanau
    A major incentive to help young Kiwis and people on low incomes to start saving has been kicked out from under them with the National-led Government ramming through short-sighted legislation under Urgency today, Labour’s Maori Development Spokesperson Nanaia Mahuta says.… ...
    1 day ago
  • Speculator tax political stunt gone wrong
    Bill English’s admission he doesn’t know whether National’s new speculator tax will have any effect shows last weekend’s announcement by the Prime Minister was a desperate political stunt, says Labour’s Housing spokesperson Phil Twyford. “This Government is so desperate to… ...
    1 day ago
  • The value of parenting
    This week, as part of the Budget, the government introduced a bill to address child poverty. This bill will require parents receiving income support to look for part-time work once their youngest child is three years of age rather than… ...
    GreensBy Jan Logie MP
    1 day ago
  • Another new tax, another broken promise
    National has unveiled yet another new tax in this budget – a rural broadband levy that will almost certainly result in an immediate price hike for internet and telephone connections across New Zealand, Labour’s ICT spokesperson Clare Curran said “The… ...
    2 days ago
  • Anniversary of Sri Lankan Tamil Massacre
    This is not going to be a happy story but if the Green Party of Aotearoa doesn’t want to know who else will? May 18th marks the anniversary of what is known as the ‘Mullivaikal massacre’ of Tamils in 2009 at… ...
    GreensBy Catherine Delahunty MP
    2 days ago
  • Labour MPs join youth to take part in 40 hour famine
    A team of Labour MPs took part in the 2015 World Vision 40 hour famine and we were told by World Vision and the young people, that it was the first time MPs had joined them and how appreciative they… ...
    2 days ago
  • Rodeo: ‘Family entertainment’ or animal abuse?
    Recently  TVNZ ran a story with confronting footage showing rodeo animals being punched, repeatedly shocked with electronic prods and having their tails violently twisted over their backs. It was clear that significant force was being used behind the scenes to make… ...
    GreensBy Mojo Mathers MP
    2 days ago
  • Budget puts the squeeze on police
    The Government has cut funding to the New Zealand police force in the latest Budget, says Labour’s Police spokesperson Kelvin Davis. “The reduction is a whopping $15.3 million that could put front line officers at risk. ...
    2 days ago
  • Crucial social services take another hit
    The Government looks set to slash half a million dollars of funding for critical social services, including Women’s Refuge and Barnados, says Labour’s Social Development spokesperson Carmel Sepuloni “Taking $500,000 from organisations aimed at improving the lives of vulnerable families… ...
    2 days ago
  • Saying it Loud on Climate in Christchurch
    The Government’s Christchurch consultation meeting on New Zealand’s emission targets was inspiring – not for what was in the Ministry for the Environment’s (MFE’s) defeatist video about the obstacles to changing to a low carbon future, but for what the… ...
    GreensBy Eugenie Sage MP
    2 days ago
  • Budget silent on small business
    The Government has completely ignored one of the most important sectors of the economy – small and medium-sized enterprises – in Budget 2015, Labour’s Small Business spokesperson Jacinda Ardern says. "A stunning 41 per cent of jobs were created by… ...
    2 days ago
  • Thank you John, it’s been bloody marvellous
    The departure of John Campbell is a blow to current affairs investigative journalism, Labour’s Broadcasting Spokesperson Clare Curran says. “Campbell Live stood out in its field. Its axing comes as local broadcasting in New Zealand remains in a state of… ...
    2 days ago
  • KiwiSaver cut shows no long-term plan
    National’s cutting of the KiwiSaver kickstart is incredibly short-term thinking, typical of a Budget that is woefully short on ideas to generate wealth and opportunity, Labour’s Finance spokesperson Grant Robertson says. “New Zealand’s savings rate is far too low. KiwiSaver… ...
    2 days ago
  • National hits the panic button for its 7th Budget
    National has hit the panic button for its 7th Budget in a desperate attempt to look like they’re taking action to reduce our shameful child poverty rates, but they are giving with one hand and taking with the other, Opposition… ...
    3 days ago
  • Panic and back-flips can’t hide twin deficits
    National’s token measures to fight fires they have left burning for seven long years can’t hide a Budget that is long on broken promises, short on vision and fails to reach surplus, says Labour’s Finance spokesperson Grant Robertson. “After being… ...
    3 days ago
  • Auckland land measure seven years too late
    National are so desperate to look like they are doing something about the Auckland housing crisis they have dusted off Labour’s 2008 inventory of government land available for housing and re-announced it, says Labour’s housing spokesperson Phil Twyford. “Despite National… ...
    3 days ago
  • Access to gender reassignment surgery essential
    I was frankly disgusted to hear the Minister for Health say that funding gender reassignment surgeries is a “nutty idea”. A recent study found that in New Zealand 1% of young people identified themselves as transgender, and 3% were unsure… ...
    GreensBy Jan Logie MP
    4 days ago
  • Global milk prices now lowest in 6 years
    The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices… ...
    4 days ago
  • Big risks as CYF checks stopped
    Revelations that Child, Youth and Family is no longer assisting home-based early childhood educators by vetting potential employees should set alarm bells ringing, Labour Children’s spokesperson Jacinda Ardern says. “Doing away with an extra mechanism for checking potential new employees… ...
    5 days ago
  • Housing crisis about real people not numbers
    The Government’s continued failure to tackle the housing crisis is seeing thousands of vulnerable Kiwis being kept off social housing waiting lists, while others, who are on the list, are being forced to live in cars and garages, says Labour’s… ...
    5 days ago
  • Housing crisis about real people not numbers
    The Government’s continued failure to tackle the housing crisis is seeing thousands of vulnerable Kiwis being kept off social housing waiting lists, while others, who are on the list, are being forced to live in cars and garages, says Labour’s… ...
    5 days ago
  • State of origin
    Kiwis are increasingly concerned about the food they give their families. New Zealand consumers have the right to know where their food has come from, particularly when it involves animals, and should be able to expect our Government to label… ...
    GreensBy Steffan Browning MP
    5 days ago
  • Relationships Aotearoa
    It is disturbing that Relationships Aotearoa, a voluntary organisation set up in 1949 to help couples struggling with their relationships following the upheavals of World War II, may be forced to close, says Acting Spokesperson for the Voluntary and Community… ...
    5 days ago
  • An economy that is just working for some is an economy that is not working
    The National Party presents itself as a great manager of the economy, but if the economy is only working for some we really need to question that assertion. Alongside the perpetually elusive surplus, the levels of risk in our economy are… ...
    GreensBy Jan Logie MP
    5 days ago
  • An economy that is just working for some is an economy that is not working
    The National Party presents itself as a great manager of the economy, but if the economy is only working for some we really need to question that assertion. Alongside the perpetually elusive surplus, the levels of risk in our economy are… ...
    GreensBy Jan Logie MP
    5 days ago
  • House prices to a crack $1 million in 17 months
    The average Auckland home is on track to cost $1 million in 17 months’ time if nothing substantial is done to rein in soaring price rises, Labour’s Housing spokesperson Phil Twyford says. “Auckland’s house prices have skyrocketed 63 per cent… ...
    5 days ago
  • Vital support services can’t be left in lurch
    The National Government has big questions to answer about how a provider of services to thousands of vulnerable New Zealanders is set to fold, Labour’s Finance spokesperson Grant Robertson says. Relationships Aotearoa which provides support and counselling to families, individuals… ...
    6 days ago
  • Treasury and IRD on a capital gains tax
    Both the Treasury and IRD have been advising the National Government on the benefits of a capital gains tax. Documents released to the Green Party under an Official Information Act request show that John Key has been selective with the… ...
    GreensBy Russel Norman MP
    6 days ago
  • Charity legislation needs review
    It is unacceptable that the big corporate based charities claim  millions in annual income tax exemptions, while small community based and operated non-profit organisations  struggle to gain official charity status, Labour’s acting spokesperson for the Voluntary and Community Sector Louisa… ...
    6 days ago
  • John’s panic-Key response to housing crisis
    John Key needs to tell New Zealanders what caused his sudden change of heart that led to the Government’s scrambled and last-minute housing measures, Opposition Leader Andrew Little says. “The Prime Minister’s sudden rush of blood to his head followed… ...
    6 days ago
  • Keep our Assets Christchurch Campaign: An update
    I recently presented my submission to keep Christchurch Council assets at the Christchurch City Council’s public hearings on its 10 year plan on 13 May. The hearings are live-streamed and recorded so you can watch them on www.ccc.govt.nz. The Council’s… ...
    GreensBy Eugenie Sage MP
    6 days ago
  • John Key finally admits there’s a housing crisis
    John Key’s weak measures to rein in the astronomical profits property speculators are making are an admission – finally – that there is a housing crisis, Labour Leader Andrew Little says. “But yet again National is tinkering with the housing… ...
    1 week ago
  • Government stifles voices in CYFs review
    The Government’s exclusion of the Māori Women’s Welfare League in a panel on the future of CYFs is a cynical ploy to stifle views, says Labour’s Māori Development Spokesperson Nanaia Mahuta. “It's unbelievable that a significant review on the future… ...
    1 week ago
  • Speech to the Otago Chamber of Commerce
    Thank you very much for the opportunity to be here today. It’s a pleasure as always to be back in the town that raised me. Growing up in St Kilda meant that there was one thing that was a big… ...
    1 week ago
  • Key can’t just be Prime Minister for Parnell
    John Key must show New Zealanders in next week’s Budget that he is more than the Prime Minister for Parnell, and is also the Prime Minister for Pine Hill, Putararu and Palmerston North, Labour’s Finance spokesperson Grant Robertson says. In… ...
    1 week ago
  • Stop the conversions
    This week, some Waikato locals took me and intrepid photographer Amanda Rogers on a tour of some  lakes and waterways in their region, and up to the massive dairy conversions in the upper catchment of the Waikato River. It… ...
    GreensBy Catherine Delahunty MP
    1 week ago
  • More regional jobs go in Corrections reshape
    News that 194 Corrections staff are to lose their jobs will have ramifications not only for them and their families but for the wider community, Labour’s Corrections spokesperson Kelvin Davis says. Prison units at Waikeria, Tongariro and Rimutaka face closure… ...
    1 week ago
  • Government’s climate meetings off to a bumpy start
    On Wednesday, I attended a hui and an evening meeting that the Government had organised in Nelson as part of its climate change consultation tour, to support the Nelson community telling the Government to take meaningful action on climate change.… ...
    GreensBy Steffan Browning MP
    1 week ago
  • Taxpayers the only ones left feeling blue
    Ministry of Social Development bosses could have saved themselves thousands of dollars in consultants’ fees by providing staff with rose-tinted spectacles, Labour’s State Services spokesperson Kris Faafoi says. A report out today reveals the Ministry is spending over half a… ...
    1 week ago
  • Why are the regions still facing restrictions?
    Labour's Housing spokesperson Phil Twyford is questioning why the regions should continue to be saddled with LVR lending restrictions announced by the Reserve Bank today. “Labour has been calling for the regions to be exempted from LVRs for the best… ...
    2 weeks ago
  • The high costs of weak environmental regulation
    Te Waihora/Lake Ellesmere is described on the Department of Conservation website as “Canterbury’s largest and New Zealand’s fifth largest [lake], and an internationally important wildlife area.” But the lake is also polluted by nutrients leaching from farms in the catchment.… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • Submissions to Wellington City Council on their Gambling Venues Policy
    Every three years Councils across the country are required to check that their gambling venue policies are still fit for purpose and they can choose to consult on their policy if they are thinking of making changes. Councils don’t have… ...
    GreensBy Denise Roche MP
    2 weeks ago
  • Reserve Bank action shows Govt out of touch and out of ideas
    The Reserve Bank’s unprecedented measures today show it understands the serious risks of the overheating housing market – in complete contrast to John Key’s refusal to acknowledge the crisis, Labour’s Finance spokesperson Grant Robertson says. “The Bank is right to… ...
    2 weeks ago
  • Send us your snaps: 25 Years of the Green Party
    This year we've hit a milestone. We're turning 25.To help celebrate a quarter of a century, please send us your photos from the last 25 years of the Green Party Aotearoa New Zealand! Note: Photos must be jpg, gif or… ...
    2 weeks ago
  • 25 Years of the Green Party
    This year the Green Party sends 25. To help us celebrate a quarter of a century please send us you photos of 25 years of the Green Party!Photos must be jpg,gif or png and smaller than 2MB. If you are… ...
    2 weeks ago
  • Bay growth plan too little too late
    Today’s Bay of Plenty growth study from MBIE is another example of Government spin - lots of talk but little action, says Labour’s Regional Development spokesperson David Cunliffe.  “This is a region that desperately needs to develop the downstream processing… ...
    2 weeks ago
  • Government bows to ACC pressure
     The Government has finally buckled to pressure from Labour and the New Zealand public in making a half billion dollar cut to ACC levies, but the full benefits are two years away,” says Opposition Leader Andrew Little.  “$500 million over… ...
    2 weeks ago
  • False figures cloud Auckland transport facts
    The Prime Minister should apologise and issue a correction after both he and Transport Minister Simon Bridges have been caught out misrepresenting facts on Auckland’s transport spending, Labour’s Housing spokesperson Phil Twyford says. "Both John Key and Simon Bridges have… ...
    2 weeks ago
  • Govt books confirm National can’t post surplus
    The last publication of the Government’s books before the budget shows National will break its promise of seven years and two election campaigns and fail to get the books in order, says Labour’s Finance Spokesperson Grant Robertson. “The Government is… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere