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Greens call for new tools, QE to save jobs

Written By: - Date published: 9:51 am, October 7th, 2012 - 327 comments
Categories: exports, greens, jobs, monetary policy, russel norman, tourism, trade - Tags:

40,000 manufacturing jobs gone in four years. Manufactured exports in free-fall. Tourism revenue collapsing. If that’s not a crisis, what is? Why is the government going to do? Nothing. Nothing. On Q+A, Russel Norman put forward a solid proposal: lower the OCR, new tools to stop housing booms, and quantitative easing to pay for Christchurch and rebuilding our disaster fund.

Finally, some action. Something to grab on to.

The Right will howl but what right do they have to howl? They are complete economic failures. They have prayed to their failed god while jobs are lost every day.

What the Greens are proposing is essentially what all our trading partners are doing. They’re driving their currencies down – and it’s working for them: QE stopped a depression in the US, it has held the euro together, it has made the Japanese economy surprisingly strong. And it’s worked by holding their currencies down and pushing ours up.

So, what are we going to do about it? Fight fire with fire. It’s the only way. The alternative is what National is doing – kissing goodbye to 200 manufacturing jobs and 1,000 Kiwis every week.

And putting the money into the Christchurch rebuild and the Natural Disaster Fund is smart. It lessens the inflationary impact and it means we are covered for both the current rebuild and the next disaster. (National’s ‘plan’ is to have the Natural Disaster Fund, which pays for your EQC claims back to $6 billion in 2041! $6 billion wasn’t enough in 2011, and what happens if Wellington goes in five years?)

I look forward to John Key, when he gets back from fellating Mickey Mouse, explaining why the best path for New Zealand is losing 200 manufacturing jobs a week and leaving our disaster fund empty so that money traders can make a profit off us.

[Update: On Q+A, James Cameron is saying that John Key, having promised us that he wasn't going to offer more money to Hollywood did just that. Instead of lowering the dollar, like the Greens would do, Key's plan is to give Hollywood more taxpayer money to compensate them for the high dollar.]

[Update: This piece from Bernard Hickey is relevant. r0b]

327 comments on “Greens call for new tools, QE to save jobs”

  1. Colonial Viper 1

    go for it. Using QE to rebuild communities and infrastructure is absolutely the way to go. Especially if it is done through a government run and operated public works programme, cutting out the dead loss of private sector profits.

    • Brent Kingi 1.1

      Yeah sure Pal, and we can skip and prance in the meadows with the unicorns too.

      QE, the way to go? What nonsense is that? If printing money is a way to go, to build up communities and infrastructure (jobs, etc), then why hasn’t it worked in America? They tried QE1, it failed, tried QE2 and Operation Twist, that failed, and now the FED has unleashed QE3, aka QE-infinity, and that with absolutely no doubt in my mind, will fail too.

      The Keynesian idea of simply printing ourselves into prosperity is one of such foolishness, I cannot honestly believe that there is serious discussion about it. If printing money to stimulate economic growth is a solution, then why don’t the poorest countries in the world simply do it too.

      No, an economy will never genuinely grow without real production and savings taking place, and this requires government to get the hell out of the way, with all the stifling regulations and taxes, and allow the economy grow by itself. But, if we continue to follow the Keynesian ideas of government intervention, and economic stimulation through central bank easing, then things will only get worse.

      Printing money for expansion in money supply, inflation by definition, will only lead to higher prices in food and energy, making it even harder for those on low and fixed incomes. I wish it were as simple as printing money, but it’s not.

      • AmaKiwi 1.1.1

        Quantitative Easing (QE) has failed everywhere.

        Re-build Christchurch; Yes.

        Print money; No.

        Human civilization is drowning in debts multiplying like cancer since WW II. The total debts can NEVER be repaid. Read the news. Europe, USA, China, Japan. Everyone is dying from excess debt.

        My mistake. The people in the streets of Greece, Italy, Spain, Portugal, are celebrating, not rioting.

      • Colonial Viper 1.1.2

        Yeah sure Pal, and we can skip and prance in the meadows with the unicorns too.

        Banks print money into circulation all the time. QE is simply the Government reasserting its own rights over the sovereign currency of a nation.

        QE, the way to go? What nonsense is that? If printing money is a way to go, to build up communities and infrastructure (jobs, etc), then why hasn’t it worked in America?

        They didn’t follow Steve Keen’s suggestion: QE needs to be directed at ordinary people, not at investment banks who simply end up hoarding the capital.

        The Keynesian idea of simply printing ourselves into prosperity is one of such foolishness

        It’s not an idea of Keynes; this is simply right wing PR bullshit.

        No, an economy will never genuinely grow without real production and savings taking place, and this requires government to get the hell out of the way, with all the stifling regulations and taxes

        More right wing bullshit; out of control private sector ticket clipping banks have driven the GFC.

        I wish it were as simple as printing money, but it’s not.

        Of course its not. The money has to go into paying down debt and creating productive infrastructure and economic capabilities. This requires a government with vision and a mission – something National sorely lacks.

        BTW stop reading Ayn Rand and Greenspan mate. It rots your brain.

        • halfcrown 1.1.2.1

          “BTW stop reading Ayn Rand and Greenspan mate. It rots your brain.”

          Well said, I could not say it better

        • Richard McGrath 1.1.2.2

          You still haven’t answered Brent’s question – if printing money was the answer, why aren’t all the poor countries doing it? Hang on, Zimbabwe did, didn’t they, there’s a picture of a hundred trillion dollar note on Whale Oil’s blog. They really paid debt off and rebuilt infrastructure there, didn’t they?

          • McFlock 1.1.2.2.1

            If surgery is the answer, why isn’t everyone stabbing themselves with knives? Oh, that’s right, some guy slit his wrists, that really worked well for him, didn’t it?
                      
            No one answer can solve every problem in the world, especially if you examine it in exceptionally low resolution.

      • Poission 1.1.3

        The FED has unleashed QE3, aka QE-infinity, and that with absolutely no doubt in my mind, will fail too.

        What the QE program allowed for was the high interest fixed mortgages to be undone.This allowed the borrowers to reduce the amount of interest being paid and apply it to debt reduction.At present the enhanced repayment program will reduce the total managed debt by 25% in one year.

        Similarly on shoring,and structural change in the US infrastructure and manufacturing will reduce (by import substitution) US dependence in a wide number of areas,as they are now fully coming onstream 2013-2014 there will be a decrease in the US trade deficit by around 250 billion pa.

        • Colonial Viper 1.1.3.1

          What the QE program allowed for was the high interest fixed mortgages to be undone.This allowed the borrowers to reduce the amount of interest being paid and apply it to debt reduction.At present the enhanced repayment program will reduce the total managed debt by 25% in one year.

          I’m a bit iffy on this. IMO it might work if:

          1) Banks are willing (or required) to forgive or alter instruments like ARMs.
          2) It is assumed that the debt was ever close to repayable in the first place: for many “NINJA”, “low doc”, “subprime” loans that was not the case, and a 25% reduction in debt is not going to make any difference.
          3) Housing values have not fallen so far that homeowners are still underwater even after a 25% reduction in “total managed debt”.
          4) The homeowner has a job and a regular income left.

          Of course QE has become a tool to just swap private debt for public debt; overall no deleveraging has occurred. Also, because consumers (understandably) appear reluctant to take on new net debt, the US economy remains stuck in the doldrums.

          The other problem is that of the securitization of the debts in question as well as ownership uncertainty affecting the status of millions of mortgages for which the paperwork was never properly completed or tracked.

          Similarly on shoring,and structural change in the US infrastructure and manufacturing will reduce (by import substitution) US dependence in a wide number of areas

          I’ve read some reports of onshoring moves. Even if some of these jobs are coming back in the front door, they are still leaking out the back door at a similar or greater rate.

          Record numbers on food stamps this year.

          • Poission 1.1.3.1.1

            “Housing values have not fallen so far that homeowners are still underwater even after a 25% reduction in “total managed debt”

            One of the mortgage lending data companies suggested that prepayments for underwater owners (owing at least 20% more then equity) have been the highest of prepayment repayers.

            There was a recent article recently were Australians were around 18 months ahead in their mortgages ( They have been repaying at same rates as cuts have come) around 125 billion shock absorber .

            http://www.smh.com.au/business/banking-and-finance/borrowers-in-a-hurry-to-pay-off-mortgages-20120925-26ilm.html

            this is not to say QE has a place in NZ,it may not.The asymmetry in the tax system needs addressing first.As does non resident property investment (what useful purpose this serves I am yet to be convinced on)

            The on-shoring of industry in the US,has a number of factors not least structural changes on both US infrastructure,and advanced new technology process(especially in steel manufacturing)

            Here the Chinese advantage of low labour cost 1.75 ph China.vs 34.50 ph US disappears on freight alone for the low value Chinese product.The new US plants (a lot smaller and less energy intensive, producing more advanced products that are required in new technological products.

            The main growth US seems to be in the small/medium companies unconstrained by the overweight bureaucracy of the large corporate manufacturers.The production curve is
            ahead of growth at present.

            One of the benefits of the low interest regime in the US is that the Federal gvt interest bill is also down around 100 billion,the lowest since 2005.

            http://www.bloomberg.com/news/2012-10-04/u-s-interest-cost-falls-to-lowest-since-2005-as-debt-soars-1-.html

            • Colonial Viper 1.1.3.1.1.1

              One of the benefits of the low interest regime in the US is that the Federal gvt interest bill is also down around 100 billion,the lowest since 2005.

              That’s great, but it also comes with two major downsides:

              1) Savers and pension funds are getting smashed. They were expecting regular, safe 4% and 5% returns on funds invested and now they are lucky to get 1%. The real life effect of this is that people have to postpone retirement and save far more than they ever thought they needed to.

              2) Asset and commodity price speculation by those who control capital is rampant. Cheap money, easy to leverage, is pouring into commodities and derivatives pushing prices higher and higher (not withstanding the correction which is underway in the markets presently as the gravity of the situation the real economy is facing becomes clearer).

              The on-shoring of industry in the US,has a number of factors not least structural changes on both US infrastructure,and advanced new technology process(especially in steel manufacturing)

              This is all well and good but is it going to be enough to offset losses in other areas of the non-farm payroll numbers? We have to wait and see, but shadowstats has true US unemployment closer to 20% than to 10% and this has been the case for a long time now.

              There was a recent article recently were Australians were around 18 months ahead in their mortgages ( They have been repaying at same rates as cuts have come) around 125 billion shock absorber .

              This is the positive spin, of course. The other way of looking at this is that Australians are much less confident of ongoing income growth than they used to be and are paying off debt and saving ASAP.

              This can be seen in the dismal retail numbers at Christmas and throughout the year which has become commonplace.

              Next time you have friends visit Brisbane, the Gold Coast or the Sunshine Coast. Ask them to give you their impressions of how the economy is going over there compared to 4-5 years ago.

              From what I have heard its pretty grim.

      • Draco T Bastard 1.1.4

        No, an economy will never genuinely grow without real production and savings taking place, and this requires government to get the hell out of the way, with all the stifling regulations and taxes, and allow the economy grow by itself.

        And that conclusively proves that you have NFI WTF you’re talking about.

        The banks print money, the money goes to building up productivity (well, some of it, most of it goes into housing) thus growing the economy (in theory). Unfortunately, the banks charge interest on the money that they printed making it impossible to pay back and causing a massive drag on the economy (otherwise known as a dead weight loss). “Savings” in this situation actually causes the economy to decline as the bank “loans” the money into existence and paying it back is destroying that money thus decreasing the amount of money in circulation.

        Now, if the government printed the money instead and charged no interest on it then a) it can actually be paid back and b) it actually builds up society rather than grinding it to a halt as is happening now.

        • Georgecom 1.1.4.1

          Growth due to real production (in the real economy) and savings would be something novel. Not something promoted by Neo-liberalism however (the economic genre favoured by National and Act). Neo-liberalism gave us growth in the financial economy and ‘savings’ mechanisms called strange and mysterious names. All came apart in 2008.

          Seems like its neo-liberalism that needs to get out of the way and allow for some solutions to be developed rather than continuing the cycle of failure.

          • Draco T Bastard 1.1.4.1.1

            Seems like its neo-liberalism that needs to get out of the way and allow for some solutions to be developed rather than continuing the cycle of failure.

            Yep. Neo-liberalism is, from what I can see, nothing more than justification for the continued exploitation of society by the rich.

      • Mikesh 1.1.5

        If printing money is not the way to go, then perhaps someone should inform the trading banks.

      • prism 1.1.6

        Brent Kingi 1.1

        No, an economy will never genuinely grow without real production and savings taking place, and this requires government to get the hell out of the way, with all the stifling regulations and taxes, and allow the economy grow by itself. But, if we continue to follow the Keynesian ideas of government intervention, and economic stimulation through central bank easing, then things will only get worse.

        So you would keep going as we are now. Bat down any suggestion about a better economic system, reply to what you see as economic Keynesian cliches with your own old cliches. The solution might suit you but you aren’t the whole country.

        Very amusing – “allow the economy [to] grow by itself”. In what direction pray? And what happens if it grows into a boom and bust cycle? Housing has already been untouched by human hands, that’s excluding property speculators of course and much lauded young things who have leveraged themselves into “owning” six houses by the age of 22. Is that what you mean by getting the government get out of the way?

      • Fortran 1.1.7

        B K

        Agreed
        I can hear Muldoon cackling – he never thought that Social Credit (sorry) Greenpeace New Zealand would ever agree with his policies.

      • Rusty Shackleford 1.1.8

        “I cannot honestly believe that there is serious discussion about it.”
        The only place it is being discussed is on thestandard.org.nz, and I would hardly call that serious.

        • McFlock 1.1.8.1

          Don’t put yourself down, Rusty – a bit of effort plus some reconditioned logic circuits and you might be able to learn about this thing that we humans call “empathy”. 

          • Rusty Shackleford 1.1.8.1.1

            You have zero credibility so you attack the messenger, classic.

            • McFlock 1.1.8.1.1.1

              Dissonance, much? Or maybe just plain hypocrisy, given the subject sophistication, philosophical depth, and intellectual rigour of your comment 1.1.8: a trite comment that deserved the flippant answer. 
                 
              Oh, that’s right – you freely admit to being a hypocrite. Option 2 it is, then. 
                 
              And apparently I’m the one with zero credibility, you hypocrite. 

              • Rusty Shackleford

                I rarely attack people personally, and never do so unless they attack me first.

                I love how you use my honesty as a stick to beat me with. I could have claimed to have been a titan of industry or some kind of lefty hero with water tight morals and convictions. The fact stands that a person can be one thing and say another. The truth of what they say is not negated by their actions. No matter how much effort you want to put into twisting it as such.

                I assume that by accusing me of lacking “empathy” that you view yourself to be imbued with only the highest and best quality example of said attribute? If that is the case, why would you advocate a policy that, at best, has never worked and on average causes untold misery?

                • McFlock

                  you could have resisted being a hypocrite, too. 
                     
                  Should that be “an hypocrite”? Meh.
                       
                  dude, you made a personal comment about everyone here, and now you’re pissed that I made an equally trite comment in response.
                     
                  Get a life.
                     
                  ps: a comment about you is a comment about you, not a comment about myself. The clue is in the subject. 
                      
                  pps: given that you should by now know that we neither share one another’s opinions about each other’s political position (and economics is politics), nor is it likely we ever will, the obvious response is “I advocate policies that help people because I have a problem with babies dying, and you don’t”. 
                        
                  ppps: given that this thread is already lively enough, I’m not going to get into a derail. Part of my self-improvement policy. So this will be my last word on what looks to be a rather banal tit-for-tat…
                    
                    
                  … wait for it …
                    
                    
                    
                  … waaaait for itttt…
                    
                     
                    
                  this 

                  • Rusty Shackleford

                    “I advocate policies that help people because I have a problem with babies dying, and you don’t”.

                    This is why you are fucking stupid. The policies you advocate are not the inverse of this comment ie. printing money does not save babies from dying. Moron.

                • So how do we feed the starving poor Rusty?
                  How bout jobs for all those Miners / State service workers?

                  • Rusty Shackleford

                    What do you mean? What do these questions have to do with printing money?

                    • Printing money is a short term answer for the bungling of the elected MPs’.

                      Regulation is what will keep food on tables and people in work.

                      For a reference of this see “Wage and Price Freeze” by Robert Muldoon

                      I dare you too google it buddy, we are in the same place, the Gnat’s just won’t admit it this time

                    • Rusty Shackleford

                      hehe, you had me going there for a second. Thanks for the larf.

                    • You’re Welcome M8!
                      Glad I could expand your Mind :-)

                    • And the Gnats’ have been effectively “printing” money for 2 years+- now
                      They just use high interest loans from foreign partners instead of a ghost account.
                      Stupid for our small economy really, completely at the mercy of foreign markets.

  2. KJT 2

    This can solve several problems in one go.

    The high NZ dollar, money for State supplied infrastructure, especially housing, (Dropping our excessive housing prices driven by banks) and avoiding the interest costs of allowing overseas banks to add the zeros to the money supply.

    To those who say it will cause inflation.
    Well inflation only occurs when the market is saturated. Like the one for houses to speculate on. (The RWNJ’s do not seem too concerned about the housing inflation caused by loan money attracted by our excessive interest rates and rising dollar).

    Inflation caused by private banks lending always has interest added. An extra cost no country is managing to keep up with.

    And it does work. Got us out of the 30’s depression before most other countries. Germany has never looked back since they did the same with the new Mark after the war.

    We also need to address the, long past its use by date, blunt instrument that is the reserve bank act.
    Presently the raising of the OCR to fight inflation is like trying to lift a bucket by standing more people in it.

    The raised interest rates attracts speculative lending into NZ causing housing and dairy bubbles.
    The rates affect existing loans. Businesses and home owners are unable to change their loan amounts each time the rate is lifted.
    All that is doing is making them pay windfall profits to the bank as extra interest. Businesses are hit with a double whammy of higher loan costs than overseas competitors and a higher dollar. The interest owed, then drops our current account balance even more.

    A surcharge for the first year of new mortgages is better. The money raised is not adding to interest owed and it only effects new borrowing. State banking would be even better. http://publicbanking.wordpress.com/

  3. Lanthanide 3

    “It lessens the inflationary impact”

    I’m not sure how printing free money lessens the inflationary impact of anything.

    • KJT 3.1

      You think raising interest charges is not inflation.

      How is it any more free money than the banks printing it? Which is what happens now.
      Except the money is free to them but one bank alone charges 3 billion last year to do it!

      However. Printing money to supply housing at reasonable cost will cut housing inflation.
      Simple supply and demand.
      Slowing speculation driven bubbles.

      Inflation has been allowed to become such a bogey that the benefits of a low level of inflation are ignored.

      Better that we borrow from ourselves to rebuild Christchurch than pay an exorbitant price to offshore financiers to do it.
      Why is one more inflationary than the other?

      • Lanthanide 3.1.1

        “How is it any more free money than the banks printing it? Which is what happens now.
        Except the money is free to them but one bank alone charges 3 billion last year to do it!”

        Because there is a practical limit on the amount of money a bank can create. They have to have a mortgage, with someone to borrow and a reasonable commitment to repaying it (based on expected future earnings). There is no such limitation on money created through QE, the government can easily create as much or as little as they want, based on whim.

        Also, once it becomes known that the government is printing money to cover the CHCH rebuild, what do you think the various suppliers of goods and services in CHCH are going to do? “Hmm, normally I would charge $20k to demolish this building, but because the government is paying and they’re printing money, I’ll quote $30k instead”.

        “Inflation has been allowed to become such a bogey that the benefits of a low level of inflation are ignored.”

        We presently have a low level of inflation. I think you mean to say “benefits of a moderate level of inflation”.

        • Colonial Viper 3.1.1.1

          Also, once it becomes known that the government is printing money to cover the CHCH rebuild, what do you think the various suppliers of goods and services in CHCH are going to do? “Hmm, normally I would charge $20k to demolish this building, but because the government is paying and they’re printing money, I’ll quote $30k instead”.

          Nope.

          You create a government owned operation to do this job. No private profiteering.

          You can also use the QE to create 5,000 new trade apprenticeships with full scholarships. Within 12 months semi-skilled labour will greatly increase in supply, further preventing contractor profiteering.

          Lanth, it’s not that your concerns have no foundation. Its just that countering the negative scenarios are bloody easy.

          Investing QE in the creation of additional capability and infrastructure maintains and improves economic productivity. Relative price stability is maintained in that scenario.

          We presently have a low level of inflation. I think you mean to say “benefits of a moderate level of inflation”.

          relative price stability is not a big deal when debt is high and real incomes are declining, especially for Maori, Pasifika and youth who have born the brunt of this Great Recession.

          • Poission 3.1.1.1.1

            There is little inflation,in the Japanese reconstruction.

          • Lanthanide 3.1.1.1.2

            “You create a government owned operation to do this job. No private profiteering.”

            Ok, and how long is that going to take to set up? When can they begin work on this benighted recovery that still hasn’t really started? Who is this department going to employ? People working for the current private companies? How are they going to entice them to work for the government instead of the private companies, by paying higher wages?

            There’s your inflation.

            • Dem Young Sconies 3.1.1.1.2.1

              The government could simply nationalise the building industry. This would protect the jobs of current private sector workers, and would negate the need to duplicate investment in capital. It would also remove the problem of a lead time in setting up a new public works orgainisation from scratch.

              • KJT

                I thought they had. Just called it Fletchers and allowed them to charge what they liked.

                • Dem Young Sconies

                  Makes the solution even simpler then. Nationalise Fletchers. Then it can become a state owned monopoly, rather than a private sector monopoly. The difference is there wont be price gouging, and any benefit will flow to the nation rather than fat-cat shareholders.

                  • Colonial Viper

                    Plus the Christchurch rebuild is going to take a decade. Plenty of time to think longer term.

              • prism

                Dem Young Sconies
                Don’t know what that means but it made me think of the book The Incredible Lightness of Scones. Certainly the idea you are floating is pretty insubstantial.

                Nationalising isn’t needed or wanted. Emergency response only from government, so we don’t get overpriced leaky homes. And a register of all involved in erecting buildings to try and prevent false names and fast dissolution of shell companies.

            • Draco T Bastard 3.1.1.1.2.2

              How are they going to entice them to work for the government instead of the private companies, by paying higher wages?

              Oh noes, the government might actually pay living wages.

              Back in 2k8 my nephew was paid around $35/hr +GST. These days he’s lucky to get $25/hr +GST and that’s barely enough to keep him solvent.

              I doubt that there would be enough inflation to really cause any issues.

            • Colonial Viper 3.1.1.1.2.3

              There’s your inflation.

              Lanth, why are you equating higher wages and more employment with higher inflation? You need to take into account current high private debt levels, excess labour supply, and significant productive overcapacity.

              Besides, moderately higher inflation is useful for combatting high debt situations.

              You need to take these factors into account.

            • prism 3.1.1.1.2.4

              Lanthanide
              Make a list of all the things that could go wrong with the idea of government funding and rebuilding and then put it on the wall to ensure that when it is planned and agreed, all the factors have been covered. Don’t talk the suggestion down before it can be considered fully .

          • halfcrown 3.1.1.1.3

            “You create a government owned operation to do this job. No private profiteering.”

            Go and wash your mouth out. How dare you “suggest” that a government department owned by the people for the benefit of the people could do a better job. Are not aware of what the neo liberals have preached for the last three decades, and that is THE market and only THE market will deliver.

            The right wing fuckwits will accuse you next of preaching communism

        • Draco T Bastard 3.1.1.2

          Also, once it becomes known that the government is printing money to cover the CHCH rebuild, what do you think the various suppliers of goods and services in CHCH are going to do? “Hmm, normally I would charge $20k to demolish this building, but because the government is paying and they’re printing money, I’ll quote $30k instead”.

          And this is why the government uses a Ministry of Works instead of private contractors.

          • KJT 3.1.1.2.1

            Still possible to have competitive pricing from all the smaller builders. Run by a competent State employee.

            Instead of giving one large building company all the contract, so they can charge what they like while screwing tradespeople.

            • Colonial Viper 3.1.1.2.1.1

              For starters, give smaller firms access to very low interest capital allowing them to hire staff, purchase equipment, organise and compete against the big boys more effectively.

              Make it easy for contractors and staff to walk away from the big corporates and strike out alone in co-ops and worker owned contracting firms.

              • Draco T Bastard

                The government is printing money at 0% thus can afford to loan it to SMEs at 0%. Hell, they don’t even need to make it a loan – make it a gift. The government will get it’s money back through the taxes that the SME will pay over it’s lifetime.

    • Dv 3.2

      Well in Japan the interest rate for housing is 0.97% and there is a tax deduction for interest payments.
      And housing prices are fairly stable.

    • mike e 3.3

      Lanth its not free the govts charge interest on the printed money that has to be paid back with the loan. which would be inflationary if spent in the wrong area of your economy.
      Building more houses would bring down the price of housing! if done right!
      When the money is repaid to the govt its deflationary!

  4. BM 4

    So the Greens answer is to make our dollar worthless so everyone has to pay through the nose for any imports.
    How well do you think that’s going to go down with your average man,woman in the street, when you have to pay $300 for a pair of shoes, that use to cost $30.00.
    Or you can’t drive any where because petrol is $10.00 per litre.
    Within weeks prices would sky rocket, what are the greens going to do about that?

    • KJT 4.1

      When they again have a job making shoes so they can afford to actually buy quality shoes.

      Instead of $30 ones that last a month.

      No point being able to import cheap shoes when we are all on minimum wage or the benefit waiting beside the phone, for Mcd’s or AWF to graciously grant us 6 hours work a week

    • KJT 4.2

      So they have a job making quality shoes and can actually afford to buy them.

      Instead of $30 junk which lasts a month.

      We are really paying a high price for imported junk. Including interest and replacement costs.

      Petrol should be $10 a litre, so we look for sustainable alternatives.

    • RedLogix 4.3

      Alternately we could allow our dollar to increase in value so that all our manufacturing and export businesses collapse and die. Then lots of people would be unemployed and wouldn’t be able to afford even those $30 shoes … or petrol at any price.

      Besides the Chinese still fix their currency at a fraction of its real value, and the US and Europe, plus much of the rest of the world are printing money flat-out, there really isn’t much risk of the Kiwi dollar becoming worthless faster than anyone else’s.

      • BM 4.3.1

        We can’t compare ourselves to China or the US, they’re massive and integral to the world economy, we aren’t.
        Are there any countries that are the same size and with similar economy as us printing money?, what effects has it had on their economies.

        • RedLogix 4.3.1.1

          So printing money is only inflationary in small countries? Who wrote that rule?

          Are there any countries that are the same size and with similar economy as us printing money?

          Well Argentina and Iceland are both on record as defaulting on large amounts of sovereign debt (which is largely equivalent to printing money when you are in debt) … and both economies have been doing quite alright since thank you very much.

        • Jackal 4.3.1.2

          Japan, which has many similarities with New Zealand, implemented quantitative easing from 2001 to 2006. Despite what Matthew Hooton believes, they had good results with a less vigorous policy than the US and UK. What adversely impacted Japan during this time was weak export performance, which would have been a lot worse without quantitative easing.

          The greatest benefits there appears to have stemmed from the commitment to an extended period of low interest rates. In conjunction with the quantitative easing program in the US, Japan’s program appears to have had only a limited upward impact on inflation.

          If the policy is undertaken correctly, with the right signals given, New Zealand would likely see an overall reduction in long-term interest rates, no significant increase in inflation and a boost to our export driven economy, which would create jobs.

          If National actually wants to create jobs, then they should listen to what Russel Norman has to say. Otherwise they’re just following the same old status quo, which is obviously not working for the average Kiwi.

          • Draco T Bastard 4.3.1.2.1

            National don’t want to create jobs – they just want to give our wealth away to themselves and their rich mates foreign and domestic.

            • Colonial Viper 4.3.1.2.1.1

              National need to ensure a continuing and massive over-supply of labour in order to keep wages low.

              • tinfoilhat

                When the time comes they’ll all be tried as the treasonous traitors they are and we all know what the penalty for treason is.

        • mike e 4.3.1.3

          BM read some economics literature before you start with your simplistic scare tactics!
          Small countries such as ours haven’t got the balls to make such decisions,
          But if the US UK EU China Japan Hadn’t done Quantitative easing ( printing Money sa you naively put it)
          We would be in the shit up to our eye balls because all that money that Double Dipping Dipshit is borrowing $ 52 billion would not be available!
          We need some one ie the greens to put us back on an even playing field while we are borrowing billions they are printing it.So we are building mountains of debt forcing our dollar up as risk increases leaving our productive sector high and dry!

        • Frank Macskasy 4.3.1.4

          And yet, BM, supporters of current free market economics offer no alternatives?

          What an irony if the mantra of “TINA” (There Is No Alternative) is to be used against the very architects of deregulation, who coined that phrase in the first place…

          We’re losing jobs and exporters are hurting. Never mnind about higher fuel prices and other imports if the dollar goes down. If exporters go down, we won’t be able to PAY for fuel and imports.

          Something that free marketeers forget.

          In the meantime, while opponants of QE (and other solutions) quibble, let’s not forget,

          ANZ; 1,000 redundancies
          Wire by Design, 55 redundancies
          Hakes Marine; 15 redundancies
          Telecom; 400 redundancies
          Brightwater Engineering; 40 redundancies
          Pernod Ricard New Zealand; 13 redundancies
          Depart of Corrections; 130 redundancies
          Summit Wool Spinners; 80 redundancies
          Ministry of Foreign Affairs and Trade; 80 redundancies
          Cavalier/Norman Ellison Carpets; 70 redundancies
          IRD; 51 redundancies
          Flotech; 70 redundancies
          NZ Police; 125 redundancies
          CRI Plant and Food; 25 redundancies
          Te Papa; 16 redundancies (?)
          PrimePort Timaru; 30 redundancies
          Kiwirail; 158 redundancies
          Fisher & Paykel; 29 redundancies
          Goulds Fine Foods; 60 redundancies
          Canterbury University; 150 redundancies (over three years)
          Solid Energy; 363 redundancies
          Tiwai Pt aluminium smelter; 100 redundancies
          Axiam Metals; 44 redundancies
          Norske Skog; 120 redundancies
          Goodman Fielder; redundancy numbers t.b.a.
          Dunedin City Council/Delta: 30 redundancies
          Blue Sky Meats; 100 redundancies
          Kaipara Ltd/Stockton Alliance; 63 redundancies
          Wainuiomata New World; 44 redundancies
          Nuplex; 64 redundancies
          Newmont Waihi Gold; 20 redundancies
          Ministry of Justice; 70-200 redundancies

          And these are just the few that I’ve noticed reported in the media.

          • BloodyOrphan 4.3.1.4.1

            Bloody well said Frank!

            The facts are, they’d rather make people redundant and strave them too death.
            Rather than accept failure of their outdated Bullshit that was stolen from GrandPappy and moronoically repeated ad infinitum.
            It must make them feel “Valid” in the “Confusing” world they live in.

      • Matthew Hooton 4.3.2

        Of course there is no risk of the NZD becoming worthless if the RBNZ printed money and used it to try to push up the USD against the NZD. That’s not the issue. The issue is that the effort would definitely fail (just as even the Bank of Japan failed when it had a go, and the RBNZ failed when it tried in 2007).

        • Lanthanide 4.3.2.1

          Page 28, “Crisis, One Central Bank Governor & The Global Financial Collapse” – Alan Bollard with Sarah Gaitanos.

          Our new policy was to intervene selectively – to sell the New Zealand dollar at a peak and buy it back in a trough in order to moderate the most extreme currency fluctuations, influence the markets and knock the top off the currency at its height. The tactic aroused huge media interest, financial market comment and some controversy. Our own expectations were far more limited than those of so-called experts. We used a mixture of overt and covert operations to buy US dollars in the market and to ensure buyers of New Zealand currency remained uncertain about just how many New Zealand dollars we were selling through this period.

          The interventions went more or less as we had hoped, and gradually the pressure on the New Zealand dollar lifted, making exporters more competitive. The disadvantage of our interventions was that the Reserve Bank would now hold an ‘open’ FX position

          So if you want to believe what Alan said about the policy, he considers it a success.

          Over the course of the rest of the book, these dealings are referred back to a few times. The reserve bank ended up making quite a profit from the situation, as the NZ $ naturally dropped back afterwards, which increased the worth of the FX position.

        • mike e 4.3.2.2

          Mad hatters you have changed the subject selling currency is effective short term and the sell off took the top off the peak and forced speculators to have a rethink and also the RBNZ made a small profit!

        • KJT 4.3.2.3

          And the internal economy in Japan is doing so badly??

        • Colonial Viper 4.3.2.4

          Of course there is no risk of the NZD becoming worthless if the RBNZ printed money

          Uh, Matthew, you do know that undermining the high value of the NZD is actually a goal of the exercise, right?

          A 20% drop in value to US70c value brings the rate much closer to the working historical norm, in case you didn’t know.

    • James Henderson 4.4

      If you think a an over-inflated dollar driven up because our competitors are lowering their exchange rates is good for New Zealand, you’re in a very small minority. There are 40,000 manufacturing workers and their families, for starters, who would disagree.

    • mike e 4.5

      Backwards Monetarist Jeez no wonder our economy is in such strife with your sort of maths !
      $30 dollars + 20% =$36 Not $300
      $2.20+ 20%=$2.60 Not $ 10
      That would improve our balance of payments overnight!
      we would have more people in jobs not buying so many cars fuel etc!
      Wages would start to rise again interest rates would stay down so long as we had a CGT!
      The cost of 20% increase on the import cost would not feed through to that much increase in retail probably only between 5and 10 percent of the retail value BM!

    • Draco T Bastard 4.6

      Oh, you mean our local manufacturing would get a boost as it would then be cheaper to make stuff here?

    • prism 4.7

      BM
      Yes it’s a problem. Have you ever had to take some nasty tasting medicine? When there is chronic pain it becomes the lesser of two evils.

      The idea would be to manage the climb down – abseil really from the peaks of our overhigh currency – not just hold our noses and jump off. We know there is no such thing as a soft landing, but we could lessen the impact if we can get our smarts together.

  5. James Henderson 5

    lanthe, there’s obviously some impact (overseas it has been basically too small to measure) but it depends what you do with the money once you’ve printed it. If you threw in to the crowd beneath your office window, that would be inflationary. If you use it to offset foreign borrowing and buy offshore assets – what the Greens are proposing – then it’s far less inflationary in NZ.

    How many instances of hyper-inflation as a result of quantitative easing during this Great Recession can you point to?

    • Lanthanide 5.1

      Where am I talking about hyper-inflation?

      • Colonial Viper 5.1.1

        Hey Lanth, the RB has previously been willing to sacrifice tens of thousands of jobs as the main way to ensure price stability.

        What we need is a way to maintain relative price stability but ensure employment and incomes more than keep up.

        Its very difficult to deliver an increased standard of living without this.

        • Lanthanide 5.1.1.1

          “Its very difficult to deliver an increased standard of living without this.”

          Increased standard of living for whom? We have enough money in this country, it’s just concentrated in too few hands.

    • Jokerman 5.2

      De flation

  6. Matthew Hooton 6

    You do understand that unemployment in New Zealand is much lower than in the US and Eurozone, whose policies you cite with approval? NZ 6.8%, US 7.8%, Eurozone 11.4%. Whatever printing money might be good for, it doesn’t have a good record of lowering unemployment.

    And presumably you also know that, in 2010, the Bank of Japan spent over NZ$41 billion trying to lower the yen against the USD, losing its taxpayers around NZ$7.4 billion. Last year, it spent nearly NZ$210 billion, for losses of “only” NZ$931 million. And surely you also know that, despite this vast expenditure, far greater than anything the NZ could contemplate, the yen appreciated over 18% against the USD over that time.

    And KJT above is hilarious over the deutschmark. It was always one of the strongest currencies in the world, a fact the West Germans were fixated on after their experience in the 1920s and 1930s, and – despite how strong it was – West Germany became the manufacturing powerhouse of the world.

    When people say they want a new approach to monetary policy, they really have to offer something more that “failed neo-liberal consensus,” “new tools,” “broader focus” and so forth. Just what is that, in practice, they want the RBNZ to do?

    • James Henderson 6.1

      And what’s the cost of doing nothing, Matthew?

      Our unemployment rate is rising, the US’s is falling.

      It comes down to this:
      are our competitors acting to lower their currencies and raise ours? Yes
      is that hurting NZ? Yes, ask manufacturing and tourism
      Can we fight fire with fire? Yes
      Ought we act? Yes. The alternative is watching record job losses and record emigration.

      • Matthew Hooton 6.1.1

        But what do you want to do?
        Printing money to buy USDs will not work (assuming that’s what you mean by fighting fire with fire) – they would just print more and we would keep printing more to buy it.
        You (and the Greens) have to say what you want the RBNZ or the govt (through fiscal policy) to do.
        You still haven’t said what you think they should do.
        (PS. I think the best thing would be to tighten fiscal policy, to reduce govt borrowing, but I doubt you would agree with that.)

        • RedLogix 6.1.1.1

          Alternately you simply use the ‘printed money’ to cancel debt.

          • Colonial Viper 6.1.1.1.1

            Alternately you simply use the ‘printed money’ to cancel debt.

            Yep. Steve Keen’s “quantitative easing for the public”.

            Hooten’s refrain is simply a tired repeat and variations of “There Is No Alternative” (TINA).

          • Draco T Bastard 6.1.1.1.2

            That’s what I was getting at here in having the government buy up peoples homes with government created money. When you’ve got the option of struggling to pay the mortgage or to keep the same house, same friends, same schools for the kids while only having 10% of income going out? Yeah, I’m pretty sure that quite a lot of people will take up the option and thus cancelling a lot of the interest bearing debt.

        • Pascal's bookie 6.1.1.2

          What would reducing demand in the economy achieve?

          • Matthew Hooton 6.1.1.2.1

            Like I said, I don’t expect anyone here would agree with tightening fiscal policy (I think it would allow a further non-inflationary OCR cut and therefore reduce the NZD a little bit without cutting real wages), but my point here is not to advocate what I think might be a good idea – it is what the author and other commentators actually want to see happen. No one (including David Parker and the Greens) are really saying what they want, beyond slogans like “failed neo-liberal consensus,” “fighting fire with fire” etc

            • Pascal's bookie 6.1.1.2.1.1

              You didn’t answer the question Matthew.

              What do you think reducing demand in the economy would achieve?

              Come on, outline the effects of reducing demand in the current conditions.

              The economy could hardly be described as ‘overheating’.

            • James Henderson 6.1.1.2.1.2

              interesting. Matthew’s answer to the high dollar is to reduce economic activity – ie shrink the economy. So, that’s the clever plan that English has been running these four years?

              “no-one’s saying what they want” um, the Greens just released a detailed plan.

              Your plan is to keep losing 200 manufacturing jobs a week and, on top of that, slash public services/governemnt transfers, and with them consumer demand. Because that’s working out so well…

            • mike e 6.1.1.2.1.3

              Stick to your message Matthew do nothing nothink!

            • KJT 6.1.1.2.1.4

              What crap as usual. We have written pages and pages of possible solutions.

              The Greens have all their policy on their site and you still claim we are not providing solutions.

              And you still support Neo-liberal policy which is increasing debt, killing our manufacturing sector, destroying our current account and cutting real wages.
              Where are YOUR solutions?

              The neo-liberal ones have been tried. Newsflash. They DID NOT WORK.

            • xtasy 6.1.1.2.1.5

              Mathew Hooton

              “Tightening fiscal policy”, yeah right!

              Tthat is what drove Germany into recession and depression in the first place. Inflation had a totally different reason. It was “printing money” for the wrong reason, but quite understandable reason for the Germans, namely to pay off the exorbitant, unfair reparations charged on them by the winning powers after WW1. they printed money to get rid of the debt, not to expand the economy, which would have been a totally different story.

              By the way, it did not only cause a lot economic trouble, it created the fertile ground for Hitler and his party to gain power. So maybe the “western” imperialist powers were not all that “innocent” after all, complaining about the war that followed.

              Hoot on and blow your horn for Bennett now, she needs the “hoots”, as more are starting to see through her and hate her.

              Quantitative easing in measure may work, at least it cannot harm, as all others do it. So why be the pure nun amongst a world of prostitutes, when it does not even warrant the effort, NZ being a miniscule economic power, but easy game for speculators.

        • mike e 6.1.1.3

          MH printing money to buy USD what utter BS as if the US would print money to offset a small economy like ours, China for sure but NZ way to small!
          Next the right wing neo classics only print money to sure up investment banks who are borrowing at 1/2 % interest rate of the major trading block RB’s printing and lending it to debt ridden countries like ours at between 6&;7% gouging our economy you F/wit!
          Austerity was supposed to drive down our debt but all it is doing is given us a YOYO recession like when the same policy was followed during the 1920’s to 1935 and again during the 1990’s!
          Its an outdated economic Ideology simplistic when the Sarah Palins and Brashes English’s and Hootens try compare and economy to a home budget is how you spin doctors sell this Bullshit to the masses!
          Look to economic hisTory Matthew something you right wing bean brained bean counters fail to do!
          Having less money circulating in your economy Fucks it Argentina 97 to 98!
          Now all European countries that are being forced into Austerity now are declining !
          Goldman Sachs (Greeks couldn’t afford loans GS told lies about Greek economy and defrauded both the Greeks and European banks )And Merrill Lynch (Ireland John Key ML sold them down the drain)sold them down the drain!along with the Libor eurobor nipponbor etc gouged these economies sold them loans they could not repay insider trading corruption while all your fat cat mates paid no taxes ie Greek tycoons!

        • Jokerman 6.1.1.4

          *deflation*

    • mike e 6.2

      Masterbater of spin hoot on!
      Your figures here are just conjecture not the truth!
      If QE hadn’t taken place the US and Europe as well as us would be in a far worse state than now!
      Stick to spin Matthew your an expert no question on that Account!
      When it comes to economics throwing a few half truths around has no credibility!
      The truth is that China has been stealing all the jobs Matthew by keeping their currency value low allowing unprofitable companies to gouge the world manufacturing until they are broke then monopolise that industry with more corporate welfare from the Central Chinese communist party (Now a Ring wing Fascist state)!
      Killing and jailing activists including trade unionists(some what akin to what the right wing would prefer and get handed to them on a plate by the command and control economy of China)
      While the developed countries have no option in the end!
      QE is not what you portray it as.
      QE is a valid tool to get banks lending again in the neo liberal version and thats been not as successful as you have pointed out because the low interest money ends up in the speculators hands and grossly inflated investment wankers bonuses ( Shonkey at ML US $45 billion to bail out BofA so they could buy ML corporate welfare ie SCF)
      QE as used by the first labour social credit government went to building cheap housing(RE Don Brashes productivity commissions findings that the biggest hurdle is poor housing in NZ)
      manufacturing and farm development which all had long term benefits for our economy!
      QE works 10 times better if you put it in the right place in your economy.
      Its effectively a cheap loan as the Government does make a profit as well from the small interest rate
      The money is paid back something the rwnj’s such as yourself Matt fail to point out!

    • Poission 6.3

      West Germany became the manufacturing powerhouse of the world

      West Germany had less accountants then NZ at that time,the manufacturing companies were run by highly skilled engineers and physicists (and mostly still are)

      The usual suspects that inhabit the boards of NZ entities suggest there is a systemic problem.

      http://www.meridianenergy.co.nz/company/about-us/people/board-of-directors/

      Japan for all its so called problems,such as high gross debt,has 4.1% unemployment and overseas investments of 7.5 trillion dollars.

      • Colonial Viper 6.3.1

        German manufacturers also tended to be German owned and specifically, family owned. This meant that owners of those German companies were much less likely to shut down and shift offshore.

        The fact that German unions and laws make offshoring factories a real bitch should also be considered.

    • KJT 6.4

      It became a strong currency after the German government re-introduced the new Mark, “backed by all of us” quantitative easing after hyper-inflation.

      Hooten is on another RWNJ planet as usual.

    • xtasy 6.5

      Matthew Hoot-on and off: I like your comparison with Germany, if only you could compare NZ with the third largest industrial nation on earth. Are you for bloody real, or are you so over-confident to get away with this BS? Germany has been through the thick and thin also, especially mid to late 1990s, and the 2004 to 2005 year, where they brought in harsh welfare reforms, that cut social spending, which though hiked up again two years later, as it was all base on silly calculations.

      Germany is of course successful, as they have always believed in high skills and education, training – or workers and in value added production. A bit like the Scandinavian smart countries also.

      Now where does this compare with NZ then, dear smart talker of NatACT? NZ is reaching rather 2nd to 3rd world standards in training and value added production. We still train and educate a lot of people here, rather to become nurses, teachers, doctors, lawyers, accountants, technicians and so on, but we do NOT KEEP them here, as there is NO production, and no industry.

      Lawyers and teachers may always be needed, but they hardly put the butter on the bread!

      So your favoured government goes on about a lot of ideological plans, but I see no advance in getting more made out of the raw materials this country grows. We export fish, logs, milk powder, meat, oil, coal, whatever, so the Chinese and others make “real” products out of the stuff, or use it to fire their industries.

      That is hardly “German”, mate, it is “Zimbabwe” or “Congo” style, not wanting to put those countries down for their misfortunes.

      You are part of the problem, mate, blaming Kiwis for failure, when the government does nothing to get things moving and developing. Get your baggage, take a bloody hike and advise a dictator in the 3rd world about your political and economic ideas. You may do NZ a great favour! Maybe start in Somalia, great potential to get some development out of very little then! Xtasy

    • prism 6.6

      Matthew
      It’s so funny to read NZ being compared to Germany France et al. They are in the midst of a landmass while we are stretched out on two skinny islands at the bottom of the world with a national population of one medium sized city such as Sydney or Melbourne. We are very self important and do punch above our weight sometimes but we have to find our own way through the mess, watching the others and trying not to get stood on.

  7. Matthew Hooton 7

    KJT also talks about raised interest rates. Which raised rates are these?
    Since the NZ recession began in early 2008 and the GFC began later that year, the RBNZ has slashed interest rates (see http://www.rbnz.govt.nz/monpol/statements/0090630.html ) and the banks have followed.

    • James Henderson 7.1

      our rates are high by international standards, triggering the carry trade, which pushes up the dollar and gives banks the funds to fuel housing bubbles.

      • Matthew Hooton 7.1.1

        Are you really arguing that higher interest rates fuel housing bubbles???
        And that, correspondingly, if the OCR was reduced from its current 2.5%, and mortgage rates fell by the same amount (which they always do) then there wouldn’t be a renewed housing bubble?
        If so, that’s an, um, innovative view. And I think you would be on your own there.

        • James Henderson 7.1.1.1

          well, as in my previous piece, if the reason that we have interest rates that are out of whack with the world (and so we endure a carry trade and high exchange rate) is because we’re afraid of a housing boom, then we need policies that directly address the possibility of such a boom. The Greens address that in their plan. http://www.greens.org.nz/sites/default/files/q__a_on_qe_proposal_draft.pdf

          • Tim 7.1.1.1.1

            Don’t get him too worked up JH – he’ll throw a hissy fit and Kathryn will have issyoos trying to deal with him tomorrow.

        • mike e 7.1.1.2

          As per usual master of spin you are just pointing out housing bubbles ” bubble brain “a variable CGT would be far more effective but would piss off to many property speculators who 99% support the Nact Govt.
          So the speculative sector keeps flourishing while the manufacturing gets handed to the developing economies (who all subsidize ie China india thailand)while our balance of payments goes to hell in a hand basket!
          A YOYO economy just like in the 1990’s Matthew while we play the pure ideological game every body else isn’t and we are getting screwed over and you and your ilk keep pushing the same ideological purist clap trap!
          Matthew the purist propaganda expert!
          Cost Accountants are beaned brained bean counters with no vision!
          Our economy has been run by these idiots for to long the only thing they can come up with is pure Bullshit (Brighter Future)

        • RedLogix 7.1.1.3

          Are you really arguing that higher interest rates fuel housing bubbles???

          Well during a period of interest rates in the range of 8-12% New Zealand still managed the most ginormous housing price bubble in all history.

          What actually triggers a bubble is when banks loosen LVR ratios and lending policies.

          • Colonial Viper 7.1.1.3.1

            Well during a period of interest rates in the range of 8-12% New Zealand still managed the most ginormous housing price bubble in all history.

            Yep. If asset speculators believe that the price of a house is going to increase by 1/3 over the next year, a 10% p.a. mortgage rate is still a great deal.

          • BM 7.1.1.3.2

            I would probably say the media triggers housing bubbles more than anything else.
            Tales of people making big dollars on property usually kicks things along pretty rapidly, especially ones with the rags to riches theme.

            • Colonial Viper 7.1.1.3.2.1

              Media is simply PR. It’s the banks which are the dealers of the cheap debt which fuels the price bubble.

            • lefty 7.1.1.3.2.2

              Supply and demand play a big part in creating housing bubbles too.

              If the Government created money for spending on housing and established an institution charged with building enough affordable, quality housing available for sale or rent to all who needed it, there is no conceivable reason why people would pay over the top prices to either rent or buy a home.

              Rents would drop and the Government could stop its handout subsidies to landlords which would lead to a further drop ( it would be interesting to know how much taxpayer money would be saved by removing these handouts to bludging and unaccountable landlords).

              There would be a lot of people employed.

              There would also be a few bankrupt speculators and bank profits might take a bit of a hit.

              There would be no housing bubble.

              • Colonial Viper

                Its stupid having 1/3 of NZ’s population on 3% of its land. Absolutely unsustainably stupid, from a housing perspective, and from many other perspectives.

            • mike e 7.1.1.3.2.3

              Naive thinking Brainless Monetarist!

        • Dv 7.1.1.4

          Carry trade Mathew.
          AND
          >>And that, correspondingly, if the OCR was reduced from its current 2.5%, and mortgage rates fell by the same amount (which they always do)

          NO THEY DONT
          The banks passed on to the customer 116% of rate rise and 84% of rate cut.

          HT
          Interest.co

          On planet Australian banks

          http://www.theage.com.au/business/the-big-banks-take-with-one-hand–and-the-other-20121003-26ztm.html

          The size of the difference is shocking. Using (Aussie) monthly Reserve Bank statistics on its cash rate and mortgage rates over the two decades to 2011 the paper finds Australian banks have on average passed on 116 per cent of each rate rise and only 84 per cent of each cut.

          Read more: http://www.theage.com.au/business/the-big-banks-take-with-one-hand–and-the-other-20121003-26ztm.html#ixzz28NeiUwHk

          NOTE Passed on to the customer 116% of rate rise and 84% of rate cut.

          • Colonial Viper 7.1.1.4.1

            Matthew, you aren’t doing yourself proud pretending to be gormless. You know how the foreign banks rip off our local economy why do you act as if you are protecting them?

  8. Pascal's bookie 8

    Just to head off any nonsense about ooger booger hyperinflation oh noes:

    http://blogs.reuters.com/felix-salmon/2012/09/03/why-you-wont-find-hyperinflation-in-democracies/

    A study from a couple of guys at the hard leftist CATO organisation indicates that hyperinflation is actually the least of a country’s problems when the are suffering from it. It appears that hyperinflation is actually really hard to bring about; it’s rare, extremely rare in democracies, and is more a symptom of complete political catastrophe than economic policy settings.

    basically, anyone who brings it up as a threat of some policy change is being a scaremongering halfwit.

  9. prism 9

    Depending on the way that any quantitative easing is spent it could be the answer for most of our problems economically in Godzone. Maybe God has spoken to Rusel – it doesn’t appear that anyone in NACT is in conversation with him.

  10. r0b 10

    Added a quick update – today’s Bernard Hickey piece is relevant:

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10838829

  11. Draco T Bastard 11

    And putting the money into the Christchurch rebuild and the Natural Disaster Fund is smart. It lessens the inflationary impact and it means we are covered for both the current rebuild and the next disaster. (National’s ‘plan’ is to have the Natural Disaster Fund, which pays for your EQC claims back to $6 billion in 2041! $6 billion wasn’t enough in 2011, and what happens if Wellington goes in five years?)

    And it never will be enough, not when the economy is being run flat with no capacity to spare. Having money in the bank is useless if there isn’t anything that can be bought with the money which is what you get when the economy is run flat out all the time.

  12. captain hook 12

    new zealanders are quintesentially external referencers.
    i.e. they need goods to promote their self esteem and distinguish themselves from others.
    till this sociopathic tendency is reversed or negated then kiwis must keep spending to ward off depression and guilt.

    • Colonial Viper 12.1

      till this sociopathic tendency is reversed or negated then kiwis must keep spending to ward off depression and guilt.

      Of course, it’s already obvious in our society that spending is really successfully doing neither.

  13. Go Russel Norman !

    I still think a wage and price freeze is the best answer, if we wait another year it’s going to be much harder on the local economy.

    We should be petitioning the UN to stop the emargo on Iran.
    Iran/China managed to move oil this year and dropped the price by over $25 a barrel.

    State housing is a must, we have 10’s of thousands of young people moving into parental life and they need support.

    Trade agreements are meant to encourage our local and foreign economy, not impoverish it.

    The only other answer is to work much more closely with Chinese and Iranian banks.
    (I doubt John Key has the gonads for that though)

    • Pete 13.1

      A price freeze is untenable. Given the fluctuation of oil prices, the cost of delivering our goods to market is always going to be uncertain. The global increase in wheat prices, which we don’t produce much of ourselves, would also be hard to resist. As for wages – they have been stagnant for a year. We haven’t reached a no growth economic model quite yet.

      Having read through the Greens’ Q+A document I can see they have done their homework. On balance I think it’s a good policy. The harm is in increasing the costs of imports like oil, wheat, consumer durables, vehicles, tractors and other machinery. We can’t make all the stuff we need ourselves. That said, we seemed to get by ok when the NZD was at 70 cents.

      • Colonial Viper 13.1.1

        As for wages – they have been stagnant for a year. We haven’t reached a no growth economic model quite yet.

        Those figures are not inflation adjusted and do not represent real spending power.

        The harm is in increasing the costs of imports like oil, wheat, consumer durables, vehicles, tractors and other machinery. We can’t make all the stuff we need ourselves.

        We can become a lot more self sufficient (we used to be and we need to in future has cheap oil supplies continue to deplete), we have plenty of farmland capable of growing wheat, also we can lose our love affair with getting a new smart phone every year and a new car every three.

      • BloodyOrphan 13.1.2

        Agreed, but how do we stop any “Civilian Benefits” being absorbed by banks and other big money orgs over the next year?.

        We’re forever chasing our tails at the moment, the end result is less services for all.

        • Colonial Viper 13.1.2.1

          Super profit tax. Any profits over $100M pa are taxed at 49%.

          • BloodyOrphan 13.1.2.1.1

            Personal or corporate?, I was looking, couldn’t find anything over 28% for company TAX

            • Colonial Viper 13.1.2.1.1.1

              I was referring to a Super profit corporate tax = 49%. The idea is to swing the game against the big corporates and for home grown SMEs.

              We probably should also have a top Income Tax tier set at 10x the median income (=$290,000 pa currently) at 49%

              Get rid of secondary tax, set a 0% income tax for the first $10K earned, drop GST back 10%.

              Plus FTT, CGT, asset tax, estate tax, etc.

              • Now your talkin bud …..
                Need regulation on lending
                (not that their current rates are bad, but you have too allow for “Bad civilised people”) ….
                Civilians start to get ahead again.

          • Lanthanide 13.1.2.1.2

            One thing that’s never made any sense to me at all, and I’d really like an answer to, is why right-wing types always claim that lower company tax rates mean more jobs and the companies staying in the country.

            Now, I can understand why a company might be more inclined to stay in the country with lower tax rates, but the jobs argument doesn’t make any sense to me. Salaries (and therefore jobs) are expenses, so no tax is paid on them any way. It would thus seem that higher tax rates encourage more jobs, because you get an effective discount against what the profit would have been anyway. Eg, with a 50% tax rate, you earn $100k you get to keep $50k of it. But if you spend all of that $100k on someone’s salary, then you’re effectively only out of pocket by $50k while the employee gets $100k (before taxes of course).

            Maybe it’s some sort of argument that breaks down at the small percentages we’re talking about? Like “if the tax rate is 28% instead of 33%, I’ll get more money in my hand for the work I do so I’ll make more effort to grow my business, therefore more jobs”, except like the piddly income tax cuts of 33% to 30%, I don’t think anyone is actually encouraged to ‘work more’ because they receive more in the pocket; if anything they’re more likely to keep working the same amount, or work less.

            • Colonial Viper 13.1.2.1.2.1

              why right-wing types always claim that lower company tax rates mean more jobs and the companies staying in the country.

              Its just a cover story giving corporates an excuse to retain more profits for shareholder distribution.

              In a way its a none-too-subtle threat. “Tax us in a way we don’t like and we will walk from your country, shutting down our operations”.

              After all, hiring staff and paying extra salaries are operational expenses which detract from profits. Lower company tax rates actually incentivise the elimination of jobs, as doing so greatly increases returns to shareholders.

              Another key understanding here: corporates really don’t like to vacate markets for their competitors big or small to take over. And having some profit is better than not having those profits or having your competitors take it for themselves.

              But politicians tend to be chickenshit/ignorant so fall for it every time.

              • KJT

                Argentina and Iceland proved that they are too greedy to stay away despite tax rates.

                And. If they do, the demand still exists so someone else will eventually start up in their place.

                • Colonial Viper

                  If they do, the demand still exists so someone else will eventually start up in their place.

                  Yep, so on this end of the equation you have the Government support new SMEs starting up to fill any gaps left. Ideally in the form of worker-owned co-ops.

              • Draco T Bastard

                In a way its a none-too-subtle threat. “Tax us in a way we don’t like and we will walk from your country, shutting down our operations”.

                Which, if the government was printing the money and not the private banks, would be a hollow threat.

            • KJT 13.1.2.1.2.2

              Tax rates have never stopped anyone from trying to make money.

              In fact cutting taxes and wages has killed much of NZ business.

              The employees on wages and those who are paid out of taxes, such as police, Teachers, welfare recipients and state servants are also customers!

              Money taken as profits and interest by overseas corporates is permanently lost to New Zealand. The worst of it is that it is circular. We end up having a bigger deficit to pay these, which leads to more borrowing and more profits lost.

            • Jackal 13.1.2.1.2.3

              Lanthanide

              Why right-wing types always claim that lower company tax rates mean more jobs and the companies staying in the country.

              You know, there is some truth to their argument… If you overtax people/companies who are in a position to create jobs, they won’t create jobs. The opposite of this argument is that giving the rich tax cuts creates jobs… As we have recently unfortunately learnt, it doesn’t. You need to find a balance between the two, which I think the previous tax regime had.

              Unfortunately New Zealand is now in a financial mess that needs urgent and perhaps drastic measures in order to remedy the problem. Without any urgent changes, the next government will need to ensure those who have benefited the most from the financial dysfunction are made to pay the most, mainly because nobody else will be able to.

              We will likely again see claims that tax policy is making rich people leave New Zealand… But in my opinion good riddance to them. If they’re not contributing positively to a sound economy and the welfare of all New Zealanders, what is the point in having them here?

              The kind of capitalist running dog, that National’s policy is generally designed to placate, is the epitome of parasites that a country like New Zealand definitely doesn’t need… They are in fact the pariah’s of civilisation and highly detrimental to the development of society.

              • Colonial Viper

                You know, there is some truth to their argument… If you overtax people/companies who are in a position to create jobs, they won’t create jobs.

                But they don’t create jobs anyway. So why don’t you tax them and have the Government use that money to create the jobs.

                • KJT

                  “”You know, there is some truth to their argument… If you overtax people/companies who are in a position to create jobs, they won’t create jobs.””

                  Not really correct. It is demand that creates jobs. Not the owners of money capital.

                  http://kjt-kt.blogspot.co.nz/2012/08/the-wealth-creator-myth-stealing.html

                  The whole idea of capitalism as an allocation mechanism is that the money follows the demand.

                  The dilemma of socialism is that even though it is proven that a more equal society will eventually result in increased prosperity for everyone, you still have to persuade the mega-rich not to steal all the monetary wealth, and sabotage it, before the effects become apparent.

                  • Jackal

                    Generally speaking investors and business owners create jobs KJT, because they take advantage of perceived demand for products or services. They are by definition owners of money/capital.

                    • Colonial Viper

                      Nope. Entrepreneurs are responsible for the bulk of jobs created. Those who own money and capital (eg banks) usually stand in the way more than they help things along.

                      investors and business owners

                      These are two quite different groups of people, with only a narrow common intersection.

                    • Jackal

                      And if an entrepreneur cannot get investment to undertake his/her business, no jobs are created. Jobs are created when capital is available, whether from private or government sources. Taxing the rich into oblivion is not a solution CV, just as National’s hands off approach isn’t a solution either.

                    • Colonial Viper

                      I think its funny you think that a 49% tax on super-profits, or a 49% income tax on those earning over 10x the median wage, equals taxing the rich “into oblivion”.

                      Of course, its no such thing. I am simply suggesting that those who benefit the most by far from our capitalist economic system pay the most, by far.

                    • Jackal

                      I totally agree… It’s where the top tax rate kicks in that will define our societies success or failure, and ensuring that the rich pay their taxes at all is just as important.

                      Unfortunately the higher the tax rate, the more likely the rich will find ways to avoid paying their taxes. 49% would undoubtedly mean a huge increase to tax evasion… So what’s your solution there?

                    • Draco T Bastard

                      Taxing the rich into oblivion is not a solution

                      As they’re the cause of societal dysfunction – yes it is.

                      Unfortunately the higher the tax rate, the more likely the rich will find ways to avoid paying their taxes.

                      And when they do that we take everything off them and throw them in jail for 20 years.

                    • Jackal

                      If you take the corrections budgets and divide it by the average amount of inmates in New Zealand jails, you’ll find it costs around $300,000 per year to incarcerate each inmate.

                      Then you have court costs and police investigation costs not to mention the cost of building more jails and lost productivity from having somebody wasting away in jail… So let’s conservatively say it will cost $7.5 million per tax cheat to enforce your regime. How many additional tax cheats are created by increasing the top tax rate is anyones guess.

                      Just like the Proceeds of Crime (Recovery) Act, this money will not be recouped from seizing assets, because tax evaders, just like drug dealers, will find better ways to hide their wealth.

                      So how exactly do you propose to pay to lock more people up, because they’re undertaking a crime to evade a policy that you have implemented… By borrowing more money? It appears you haven’t properly thought your plan through DTB.

                • Jackal

                  Rich people I know create jobs when they have a need, there are profits to be made and the resources are available. Even with a higher tax regime, a lower interest rate could offset this and would help in some respects to ensure job creation. However a raft of other initiatives need to be in place to ensure its success.

                  As I’m sure you agree CV, rich people are taxed and some of that money is already used by the government to create jobs… National’s contention that the government doesn’t create jobs is a complete nonsense!

                  Whether the private sector or the government is better placed to create jobs is a matter of opinion, but it’s my observation that both can get it horribly wrong!

                  The private sector needs the ability to create jobs when it’s required, with the government needing to be ready to ensure economic stability within the free market to ensure job creation is in the right places. This is achieved by properly reading indicators to help create jobs in specific sectors where longterm growth is achievable. Without that, New Zealand will continue to limp along and not achieve its true potential.

                  The government should increase the amont of jobs it directly creates, especially in R+D. This would increase our knowledge based economy, which is perhaps our most profitable resource available. In many ways, quantitative easing is only a stop measure, and relying on our export driven economy is ultimately unsustainable long term.

                  • Colonial Viper

                    Rich people I know create jobs when they have a need, there are profits to be made and the resources are available.

                    its more profitable to eliminate jobs mate.

                    Let’s say you own a business with 5 staff. Cut out one job and make an extra $40K profit a year. Goal.

                    • Jackal

                      That’s a very simplistic view… You forget that in most industries, reducing staff reduces productivity, which ultimately means less products or services are available to sell. It doesn’t take a rocket scientist to know that means less profits, which is not the goal of most companies.

                    • Colonial Viper

                      You forget that in most industries, reducing staff reduces productivity, which ultimately means less products or services are available to sell.

                      In general, I completely disagree with your reasoning.

                    • Jackal

                      In general, unless the jobs in question are unproductive, then reducing the amount of employees reduces productivity, which generally reduces profits.

                      The only way for your argument to work is if working hours are dramatically increased without reimbursement… Which makes me think you’re confusing my contention with the effects of globalisation, and perhaps mechanization?

                    • Colonial Viper

                      In general, unless the jobs in question are unproductive

                      Its this statement which is loaded with neoliberal assumptions.

                      You need to talk to more people who have been on the receiving end of redundancies, downsizing, right sizing etc.

                      I don’t believe you can separate out the effects of globalisation and technology in this debate.

                    • Jackal

                      CV

                      Its this statement which is loaded with neoliberal assumptions.

                      I presume you think this because the rightwing have used the excuse that laying off public servants will increase the governments productivity? You’re effectively buying into their bullshit CV. The flip side of this argument is that a job is worthwhile even if it’s unproductive… If that’s what you’re saying CV, I would have to disagree.

                      You need to talk to more people who have been on the receiving end of redundancies, downsizing, right sizing etc.

                      Saying I’m ignorant of people who’ve been laid off is a lame obfuscation.

                      I don’t believe you can separate out the effects of globalisation and technology in this debate.

                      We’re talking about jobs that people do here in New Zealand CV. Protecting our jobs from international businesses that undercut and undertake corporate takeovers to ensure market dominance is a completely different debate to the one we’re having.

                      Although they’re intertwined, protecting our industries from offshore competition has a different set of levers than invigorating our internal economy and creating jobs here.

                      Just so we’re clear, my contention is that reducing the amount of employees generally reduces the amount of productivity able to be achieved, which in most cases reduces profits. This is true on a business and a governmental level, hence all the public services that are no longer available (or severely degraded) since National sacked thousands of public servants.

                    • Draco T Bastard

                      In general, unless the jobs in question are unproductive, then reducing the amount of employees reduces productivity, which generally reduces profits.

                      Wrong. In general the market hasn’t grown while productivity has and so getting rid of a worker will result in higher profits. That’s where all the downsizing over the last few decades has come from.

                    • Jackal

                      You’re talking about growth in Labour productivity for New Zealand of approximately 0.4% since 1978… Hardly a game changer DTB.

                    • Colonial Viper

                      You’re talking about growth in Labour productivity for New Zealand of approximately 0.4% since 1978… Hardly a game changer DTB.

                      Nah your number is ridiculously out I think. NZ GDP has gone up 9x since 1980. But population has only gone up 1.4x.

                      1980 GDP = $23B
                      2011 GDP = $202B

                      That’s an 880% increase in GDP

                      Population
                      1980 = 3.16M
                      2011 = 4.41M

                      That’s a much smaller 40% increase in population.

                    • Jackal

                      I’m no expert, but according to Treasury, output growth from 1978 to 2007 was 2.6% from all contributions. Labour contributed 0.3% of this, with capital 1.4% and multifactor productivity 0.9%. However their figures only go to 2007. I’ve been generous in approximating 0.4% Labour output growth from 1978 to 2012.

                      BTW CV Labour productivity is not the only factor in the growth of GDP.

                      You are correct DTB that in some cases the free market has caused redundancies? This is very different to the amount of productivity being dependent on the amount of workforce a business has available. Basically two people can produce more than one… Why is that so hard to understand?

                    • Draco T Bastard

                      Basically two people can produce more than one… Why is that so hard to understand?

                      It’s not a question of being able to produce more or not but if there’s demand for the produce which there isn’t. So if you have two people who can do a job but only enough work for one person to do it then one person is out of work.

                    • Colonial Viper

                      Basically two people can produce more than one… Why is that so hard to understand?

                      because it’s not true.

                    • Jackal

                      So you think one worker can make more stuff than two workers? Don’t be a dickhead CV.

      • Draco T Bastard 13.1.3

        We can’t make all the stuff we need ourselves.

        Actually, we could. We do have the resources available. We just couldn’t do it immediately.

        • Colonial Viper 13.1.3.1

          Driving down consumerism of high value imported items would help enormously. Listen people, you do not need to change your iPhone 4 for an iPhone 5. You do not need to change your three year old 42″ LCD tv for a 50″ 3D model.

    • Draco T Bastard 13.2

      Trade agreements are meant to encourage our local and foreign economy

      No they’re not. They’re there to protect investors and that protection comes at the expense of the populace who’s government just signed the FTA. The inevitable result is an impoverishment of the populace.

      • BloodyOrphan 13.2.1

        Hence the words “meant to” bud

        • Colonial Viper 13.2.1.1

          Hence the words “meant to” bud

          They’re not accidentally designed and written you know; they do tend to achieve what they are genuinely intended by their sponsors to achieve.

          The “meant to” you are referring to (and I think this is what you are referring to) simply the PR cover story sold to the public.

          • BloodyOrphan 13.2.1.1.1

            Absolutely, that’s why we need a leader of the people.
            Those agreements should be used for protection of our economy, not exposure.

  14. captain hook 14

    why buy a rake when you can get a leaf blower, spend time at the mower shop, go to the service station for petrol, make enough noise to shatter the peace on a Sunday , and generally delude yourself that every time you pull the trigger it equates to the power of your own personal ejaculation.
    talk about Marxian false consciousness.
    the world had gone crazy.

  15. Fortran 15

    QE is a return to Muldoonism (and Douglas).
    Get real – when to dollar drops the price of imports goes up – why are televisions etc so cheap (and shoes).
    Watch the price of fuel when it happens. Then you will see inflation.

    • Colonial Viper 15.1

      you’re saying that the Federal Reserve in the USA has returned to Muldoonism?

      What exactly are you on about?

      • BloodyOrphan 15.1.1

        Yes they have, they are subsidising the price of oil at the bowser.

        • Colonial Viper 15.1.1.1

          Well they are subsidising the price of gasoline at every stage of exploration, extraction, refining and distribution, but they certainly didn’t learn that from Muldoon.

          • BloodyOrphan 15.1.1.1.1

            Muldoon got it from somewhere.
            Problem is our Net account is zero or negative at the moment.

            What people call “Printing” money is just another Ghost account with 100 billion in it, they do own the transaction engine, but not so cosher on the international scene

            The one real driver is the cost of transport, we have too bring that down and build some reserves back up.

            • Colonial Viper 15.1.1.1.1.1

              Problem is our Net account is zero or negative at the moment.

              Balance of payments?

              Same as the last 20 years.

              • I can’t believe that, some off the record conversations from the reserve bank would imply otherwise.

                Why are ther Gnats’ going on about welfare bludgers and asset sales, there is something driving them.

                • Colonial Viper

                  I can’t believe that, some off the record conversations from the reserve bank would imply otherwise.

                  NZ current account has been consistently negative and sittng around 4%-6% of GDP forever. Reserve Bank chart of 1990 to current.

                  http://www.rbnz.govt.nz/keygraphs/fig6.html

                  • Fair enough we’re on the same page then.

                    • KJT

                      NZ tradeables in real products is actually positive. It is interest and profits going offshore that makes the difference.

                    • Draco T Bastard

                      It is interest and profits going offshore that makes the difference.

                      The interest can be seen to by having the government print money and ban the banks from creating it. The profits going offshore can only be remedied by banning foreign ownership.

                    • Colonial Viper

                      The profits going offshore can only be remedied by banning foreign ownership.

                      Quick and dirty (part) solution is a 49%, 59% or 69% super tax on corporate profits over $100M pa.

                    • KJT

                      Don’t mind profits going offshore if they have built up a sustainable and productive industry that benefits New Zealand. When it is just speculation raising the costs of existing assets then it becomes a problem.

                    • Colonial Viper

                      IMO if its something vital we should and can do ourselves – like phones and banking – we should, whether privately or publicly.

                      And yes some profits can go offshore, but not as big a share as now.

                    • A fixed monetary value cap on offshore transactions, revised annually perhaps.
                      Not a percentage, that just keeps us chasing our tails.

                    • Draco T Bastard

                      Don’t mind profits going offshore if they have built up a sustainable and productive industry that benefits New Zealand.

                      I’d prefer it if we’d just bought the technology ourselves and then built it up from there. We get what we need, the foreign entity makes a one off profit and everyone’s happy. With foreign ownership though we just keep paying and paying and paying through off-shored profits.

            • Draco T Bastard 15.1.1.1.1.2

              The one real driver is the cost of transport, we have too bring that down and build some reserves back up.

              Transport is easy. More rail and all of it electrified which means more renewable electricity generation such as wind.

              More reserves of what?

            • Robin Westenra 15.1.1.1.1.3

              Yes, you are right. When Muldoon was PM the economy, although in a period of stagflation was still growing. We had cheap oil. We don’t and growth has gone forever – hence the mad grab for resources everywhere, including off our coast.

    • mike e 15.3

      Fratrain Inflation will reduce demand on imported goods why our balance of payments has been in the Negative since 1976 except for may be 3 finacial quarters in 36 years !

  16. AmaKiwi 16

    Deflation. Do any of you know what deflation is?

    Hint: Deflation was the crash of 2008-09.

    Deflation is when prices go down, not up. All prices go down. The price of labour, goods, services, real estate, shares, commodities. Why do prices go down? Because there is no credit to buy with.

    We crashed in 2008-09 because people and institutions would neither lend nor spend. It’s happening again for the same reason. In case you forgot, in 2008-09 the NZD lost 40% of its value against the USD. Why did the USD go up? Because globally more than half of all debt is denominated in USD. In 2008-09, when Kiwis (and everyone else) could not pay their loans they sold assets to buy USD (or their banks did).

    Borrowing more money is like forcing whiskey down a drunk’s throat to get him to sober up.

    We’re in trouble because collectively we can never repay everything we owe. So let’s borrow more for our children to repay.

    • Colonial Viper 16.1

      You’ve totally screwed up a whole lot of economic concepts here. You’ve also mixed up what has happened in the USA with what has happened in NZ.

      Note that NZ inflation and cpi have NOT been negative. We have NOT had a deflationary experience in the NZ economy. Every ordinary householder knows that daily costs of living have been going UP not DOWN.

      In case you forgot, in 2008-09 the NZD lost 40% of its value against the USD. Why did the USD go up?

      Yes, but the US did not allow that situation to persist. Their money printing means that entire loss has since been erased.

      We’re in trouble because collectively we can never repay everything we owe. So let’s borrow more for our children to repay.

      So write off the debt, like Iceland did. Or let it inflate away. Or print money to pay it off.

      • AmaKiwi 16.1.1

        CV, we’ll have to agree to disagree.

        Writing off debt is called “defaulting.” It is about as painless as open heart surgery.

        • Colonial Viper 16.1.1.1

          Writing off debt is called “defaulting.” It is about as painless as open heart surgery.

          Maybe we could try a generation of austerity like the Greeks and the Irish? That’s going to be as painless and quick as amputating your leg with a razor blade.

    • KJT 16.2

      When did prices go down in NZ?? In what planet. Key’s?

      • AmaKiwi 16.2.1

        Which prices are you asking about.

        During the 2008-2009 NZD crash, prices for imported goods went UP because our dollar was worth less.

        Did you try selling real estate or shares during that time? They went DOWN while imported goods went UP.

        • Colonial Viper 16.2.1.1

          Did you try selling real estate or shares during that time? They went DOWN while imported goods went UP.

          Yeah but only compared to the very peak of the boom 2006/2007. If you looked back another 5 years to 2001 property was still well in the black during the “crash”.

          • AmaKiwi 16.2.1.1.1

            CV, good luck if you think property is a good investment when:

            1. the world is drowning in debt
            2. two-thirds of the money we borrow we borrow from overseas
            3. business is slowing everywhere on the planet (except repo agents).

            My time line goes back a bit farther than 2001 to 1987 and 1929 and 1720.

            I think the next stage of the crash has barely begun and no government policies can avert it. Both the Right and Left are in denial that the crash is inevitable. My view is we must share the pain more evenly and focus on what is essential for everyone’s healthy survival.

            “The earth has enough for everyone’s need, but not for everyone’s greed.” Ghandi

            • xtasy 16.2.1.1.1.1

              ALL property in private ownership, that goes beyond the own home, should be taxed highly, unless invested for the social good of offering affordable tenancy to renters. ALL property that is of a speculative nature should be taxed above anything else, as that is NOT productive investment and thus harmful for the economy. Do not forget macro economics, and stop over excusing micro economists, always looking after number one and nobody else.

              I am in agreement, at least in part, with Gareth Morgan and Hickey. They may not be what some here like, but I think that some of their recent analysis, conclusions and recommendations make a lot of sense, for instance a universal minimum income to do away with the present benefit system.

              But that is a bit too far fetching for narrow minded envy driven haters.

              You may need to “earn” your “yellow star” with the label “bludger” or “poor sucker” written on it, that appears to be on the mind of some in the middle class and up the ladder. I hate to disappoint you, the Third Reich failed, not just because of the war, but also for about half of Germans never believing in the shit the Nazis preached to them.

              So let us move on and get the economy rebuilt on a totally new, but positive and intelligent foundation for god’s sake!

            • Colonial Viper 16.2.1.1.1.2

              CV, good luck if you think property is a good investment when:

              Are you speaking in terms of a financial investment? Well I agree. But if you’re talking about a real investment, farm land rocks.

        • KJT 16.2.1.2

          What has real estate prices or shares got to do with ordinary people.

          We buy and sell in the same market. The gap generally stays the same.

          As for shares, we are too busy trying to keep up with constantly rising grocery and power prices, to worry about a few rich gits who are silly, or rich enough to take that sort of gamble.

    • Draco T Bastard 16.3

      In case you forgot, in 2008-09 the NZD lost 40% of its value against the USD.

      I get a ~20% drop from 2008 to 2009. Not a 40% drop.

      We’re in trouble because collectively we can never repay everything we owe. So let’s borrow more for our children to repay.

      That’s what we’re doing under this government. The Greens (and me) are suggesting we do something else.

      • AmaKiwi 16.3.1

        Draco, check the exchange rates from the 2007 highs to the 2008-09 lows

        NZD/USD from high of .8219 to 2009 low of .4897 = 40.4% loss

        NZD/JPY from high of 97.81 to 2009 low of 44.25 = 54.7% loss

        NZD/EUR from high of .5870 to 2009 low of .3879 = 33.9% loss

        Both National AND the Greens are proposing more debt.

        The difference between me and most of today’s bloggers is I think we cannot avert disaster. The best we can do is not make it any worse by going deeper into debt for non-essentials, as National is doing.

        • Poission 16.3.1.1

          In that last 5 years NZ debt increase in the sectors are

          Agriculture 15.008 billion ( 47%)

          Business 6.573 billion ( 9%)

          Household mortgages 28.947 billion (20%)

          debt inflation in households and agriculture ( which is mostly land capture eg Crafer) suggest that constraint is needed in investment expectations.

        • Draco T Bastard 16.3.1.2

          Draco, check the exchange rates from the 2007 highs to the 2008-09 lows

          I did, I even linked to them.

        • Colonial Viper 16.3.1.3

          Why are you so concerned with those historical exchange rates? Once the US QE programmes kicked in, the USD weakened right back down again.

          • AmaKiwi 16.3.1.3.1

            “Why are you so concerned with those historical exchange rates?”

            Because the NZD at USD $0.40 is also a disaster for us. The factors which caused the drop in 2008-09 are all still in place to cause it to happen again.

  17. Wow, Russell Norman channels his inner Mugabe or wait is that the Weimar republic I hear crumbling in the back ground? And oh oops, isn’t it Fletcher with all its shares owned by the big banks who would hog all this money out of thin air just like they do in the US and Europe?

    What a fucking Nincompoop!

    And to the writer of this post. What planet do you get your information on the US economy from? Let me guess the NZ mainstream media?

    Incredible, and for those of you who want to know more about what QE really means: http://www.youtube.com/watch?feature=share&hl=en&v=_WrMWK-FJzU&gl=US

    • James Henderson 17.1

      back to the bong, ev

      • travellerev 17.1.1

        I see you really have your arguments down pat. For your information. I have never smoked a bong or a joint in my life. In fact I have never even tried one puff of a cigarette. You on the other hand must have taken a handful of happy and other pills to be able to ignore history.
        you are an ignoramus who has no idea about what is happening financially and economy wise around the globe and who will have a rude awakening when inflation will tax whatever economy is left into the pockets of the 1% while the rest of us will be tenants in our own land.
        And for those of you who want to know what is really happening with the economies in Europe here is the link to <a href=’http://zerohedge.com/’>Zero hedge</a>. They are guys who work in the financial world and keep a running commentary and James please don’t give up your day job. Economical commentary is not your forte.

        CV, My bad, Here is a better <a href=’http://theeconomiccollapseblog.com/archives/how-qe3-will-make-the-wealthy-even-wealthier-while-causing-living-standards-to-fall-for-all-the-rest-of-us’>link</a>

        QE is just a Government/Banking Cartel trick to give the bankers more money at the cost of the rest of us. In other words you want to make the neo-liberal right winger 1%ers happy? Start a round of QE!

        Social credit which is the exclusion of the privately owned global banking cartel and the re-nationalisation of the right to manage our own wealth and issuing of our own money ( a right which we abdicated in 1987 with the Reserve bank act) is a somewhat different beast but it is my every educated guess that the banksters won’t let that happen any time soon.

        • Draco T Bastard 17.1.1.1

          Social credit which is the exclusion of the privately owned global banking cartel and the re-nationalisation of the right to manage our own wealth and issuing of our own money ( a right which we abdicated in 1987 with the Reserve bank act) is a somewhat different beast but it is my every educated guess that the banksters won’t let that happen any time soon.

          I figure the same but I also figure that if we get people to understand how the present system works then democracy will force the needed change (which is why this government is doing it’s best to destroy our democracy).

    • Colonial Viper 17.2

      That link has very little information on QE, just some general stuff on the banking cartel.

      NZ should move to a debt free Government provided money supply, to take it out of the hands of the banks.

      Your Zimbabwe and Weimar Republic examples are not relevant as we still have a productive, resource rich economy. We simply need a money supply to get that economy moving and transactions going.

      • Dv 17.2.1

        There seem to be some merit in govt issued credit interest free to carry out public works and then withdrawing that money as the investment brings returns.

      • travellerev 17.2.2

        CV,
        Here is Michael Snider of the Economic collapse blog’s take on QE and Weimar and here is a graph of the time scale of the Weimar republic.
        You’re not stupid so don’t act like it. The global financial system if imploding as a result of a lack of confidence in the fiat system not because banks need more money to lend to small businesses etc.

        In fact according to Michael Hudson they lend great sums of money just not to us.
         
        I agree with the fact that we the people have to take back the management of our own wealth and that means Social credit. Big difference to QE.

    • xtasy 17.3

      travellerev: I wonder who the nincompoot or whatever you like to describe it is?

      Russel may not have the 100 per cent solution, but he, same as Winston by the way, have more damned brain and common sense than the idiot lot running the show at present. So get off, wake up, actually read the Wall Street Journal, Economist, Financial Times and more, and you will find that your thinking is surely that 100 percent moronic!

    • QoT 17.4

      is that the Weimar republic I hear crumbling in the back ground

      Ahahahahahahahahaha.

      Seriously, ev, you’ve posted some batshit stuff in the past, but comparing NZ to the Weimar Republic is so over the top it’s fucking brilliant.

      • travellerev 17.4.1

        xtacy,

        I do, every day, AAAND…. I read/watch Zero hedge, Max Keiser , Michael Hudson, Bill Black, Gains pains capital, Cris Martensens’s Peak prosperity, Reggie Middleton’s Boom bust blog, The market Ticker, Testosterone pit, naked capitalism and last but not least the reformed trader to name a few. All of these guys are still active in the financial world and every single one of them has forgotten more about global finance than I have been able to absorb over the last six years, six hours every day.

        QoT,

        Sweetie, just because you have the brain capacity of a twerp doesn’t mean there isn’t more outside your limited vision.

        I suggest you start reading some of the publications mentioned above and get back to me in oh, five or six years when you may begin to see the light. In the mean time give it a rest ok? Go back to writing about “Feminism” or something. That seems to be your forté!

        NZ will be the Weimar republic if idjits like Russel are let loose on the financial mechanisms of this country and that can happen real quick.

  18. captain hook 18

    It would do some people,beside heka paratai, well to remember that the only time nz has had any stability was when there were controls in place.
    way back in the 1950’s.
    the system ended up with gross distortions but they were going in the right direction.
    it is obvious to anyone with a modicum of knowledge about the nz economy that nz is too small for qe to have any effect without another set of gross distortions arising in another altogether new direction.
    so if nz is to maintain stability then it is time for a new system of controls.
    so?
    to proceed against the prevailing winds of financial orthodoxy may seem like political suicide but nz is coming to that place in history where decisions have to be made besides just providing a play country for the already rich.
    it may be that physical uniformity and the unending variety of unnecessary disabling choices is necessary but the maintenance of the other democratic freedoms plus the openness of the web will ensure a healthy environment.

  19. millsy 19

    QE is the PC term for currency devaluation isnt it?

    • James Henderson 19.1

      no, it’s a tool for currency devaluation.

      • millsy 19.1.1

        So the same outcome is achieved?

        • Colonial Viper 19.1.1.1

          millsy, its not a deterministic process like the “currency devaluation” you have in mind which is probably to do with a fixed/pegged value currency and is not applicable to the “clean float” the NZD exists in now.

          Basically, the market will still have a strong say in what the value of the NZD is, unless we take further steps eg. to peg its value to a “basket” of other currencies.

  20. Having a green MP promoting QE (and in the name of growth/employment) is a bit like Captain Paul Watson promoting Whale Sushi.
    Maybe Norman wants to be the leader of Labor ?

    • Colonial Viper 20.1

      But QE done right will get economic growth and consumption going again…ok I’ll stop baiting now.

      • Draco T Bastard 20.1.1

        Actually, if done right it move us to a sustainable economy.

        • Colonial Viper 20.1.1.1

          Yes indeed it will. We have to use the last of the good times to set this country up for the next 200 years.

  21. xtasy 21

    As much as I am a very cautious economist, I think Russel has a point in showing some real courage here, while we have a gutless, no answer, idiotic government relying solely on “Joyce juice” that is rather the poisonous “snake oil” juice NZ has been fed for two to three decades now!

    This “snake oil” medicine so often thrown at Labour and the Greens is really a “snakey oil” BS recipe by a government that lost all solutions, and seeks to blame the opposition now, for its own failings.

    There is sense in doing just a bit of what all other countries are doing. Why be the goody, goody purist, when all are out there to ruin the economic fair play and harm NZ industry and exports. You would have to be an idiot to stick to this. But grant them that “privilege”, they are just as much of idiots as that Mormon boy Romney is in the US.

    I do not believe the money printing recipe will be the end solution, but it must be applied in measure and with sense, and NOTHING will be lost. I know enough about economics, have studied a fair bit of it, to understand also, that 50 per cent of it is “psychology”.

    So get moving on with it. The Greens are leading the way, while Shearer is uncertain, at least Parker supports some of this, and while the paint brush is still in the hand of the “sickness beneficiary entrepreneur roof-painter”.

    Things can only improve. I will vote Green again, maybe Mana, but Labour, wake up to f-ing reality, thanks!

  22. Poission 22

    If ever there was clear evidence that we need to get rid of that buffoon Dunne it was on 60 minutes tonight.There is a release on Voxy from Norman,

    http://www.voxy.co.nz/politics/foreign-trusts-must-be-broken-open-greens/5/137001

    Has he still got 500 paid up members ?

    • xtasy 22.1

      yes, absolutely: NZ is now a “tax haven” for drug cartels, Russian and Chinese mafia and other operators, dodgey people dodging taxes all over the planet. By the way: I read and heard about this about 2 years ago, presented it to local media, but NONE wanted anything to do with it!?

      Same as other stuff I presented recently, and it is clear, NZ media is amongst the worst in the world. But once some journo suddenly “discovers” a convenient” story, they are swift to report it, without disclosing sources and suggestions.

      Bastards!!!

      • thatguynz 22.1.1

        It’s even worse than that.  I can recall a trading course I did about 8-9 years ago where the instructor was quite unequivocal that NZ was viewed as a tax haven for overseas entities – and in particular Australian residents..
         
        I’m astonished the media are trotting this out as a recent advent now…
         

  23. xtasy 23

    Maybe try You tube on this one. No regrets for positive power from Michel Telo. Not a revolutionary as such, but at least inspirational:

    *** É Nóis Faze Parapapá ! http://youtu.be/TDbBkvVYN3s – (NEW SINGLE)

    http://youtu.be/TDbBkvVYN3s

    Perhaps give it a try and listen, a bit trendy, but a good taste alternative musica to what we get all day. Salute

  24. redfred 25

    The Greens policy is well thought out, careful and conservative.

    It is funny watching Key, Joyce frothing at the mouth, “You can’t create money!

    Then what is our fractional banking system then;

    http://en.wikipedia.org/wiki/Fractional_reserve_banking

    Why is John Key so against this? I think it would mean a requirement to put tighter controls and monitoring on the Banks.

    Captain Bank Of America Key will never jeopardise his chairmanship of on Myrell Lynch, by curtailing the Banks monopoly on money printing.

    This QE would be about buying and building assets not playing the money market. The difference is huge, and the Greens policy is very smart.

    • AsleepWhileWalking 25.1

      Russell Norman is very smart. I’m liking the Greens more and more

      • tinfoilhat 25.1.1

        I’m hoping Russell is PM or at least very high up in the next NZ parliament, hopefully he’ll be able to get Key and his cronies tried for their crimes against NZ and they can be punished or even better thrown out of the country along with their families and other hangers on.

    • Draco T Bastard 25.2

      Why is John Key so against this?

      If governments go round creating money, reducing poverty and generally making society more successful it takes the power away from the capitalists, shows that they’re absolutely worthless and that they’ve been stealing from us for the last few centuries.

      • TheContrarian 25.2.1

        Saying ‘the capitalists’ is so broad as to be almost useless as a descriptor. You might as well just say ‘them’ because it carries nearly as much descriptive power.

        • Draco T Bastard 25.2.1.1

          Considering that it’s only about 1% of the population – not really.

          • TheContrarian 25.2.1.1.1

            “Considering that it’s only about 1% of the population – not really.”

            Only 1% of the population are capitalists? How do you figure?

            • felix 25.2.1.1.1.1

              How does he figure? My guess would be by knowing the meaning of the words he uses rather than just trolling the standard with inane questions looking for pointless arguments that are bound to end in his own embarrassment.

              • It would help if Draco clarified what he meant by ‘capitalists’ because like I already said “Saying ‘the capitalists’ is so broad as to be almost useless as a descriptor.”.

              • higherstandard

                ‘…..rather than just trolling the standard with inane questions looking for pointless arguments that are bound to end in his own embarrassment.”

                Isn’t that the raison d’etre for the site Messr Felix Lebadaud ?

              • Add to that with why on earth would I ever be embarrassed by what the knob-ends and nobodies at The Standard thought?

                • Te Reo Putake

                  Well, as you are currently the leading knobhead and nobody at the Standard I would have thought embarrassment would be a regular thing for you, along with confusion, shame, bewilderment,  and the nagging feeling that you really should try to think of something contrarian to say at least one time in order to justify your handle.
                   
                  And ‘capitalist’ is not a broad term and it’s getting less broad every day as power is concentrated in fewer hands. Do you own the means of production, TC? Yes? Then you are a capitalist. No? Then, like the rest of us, no matter what your job title, you are not a capitalist.

                  • Colonial Viper

                    Perhaps we can specify a bit further by using the term “crony capitalist”. One who parasitically extracts capital from society to benefit himself and his mates.

      • tinfoilhat 25.2.2

        They and their failed ideology should be thrown on the scrap heap.

  25. tsmithfield 26

    If anyone does a bit of research they will find that the effect of QE in the US has been to rescue the banks which were fucked, and to drive up stock prices. So, QE is great if you are a banker or a stock speculator.

    The big problem is that QE is funding huge asset bubbles to the extent that the price of the assets doesn’t reflect the underlying value of the assets. The reason for the bubble is that the return on money in the bank is zero, so people have little option but to put their money into assets such as stocks, even though the dividend return on these is also fairly tragic, but still better than zero.

    Sooner or later the bubble will burst and the price of the assets will drop to reflect their fundamental value. This will result in the crash cycle repeating.

    The difference in NZ is that the RB still room to move with dropping interest rates. This means there is still scope for conventional money policy. The reason the US had to engage in QE is that they had exhausted their options under conventional policy.

    • Draco T Bastard 26.1

      That would be because the US QE was done to benefit the banks and not their society.

    • mike e 26.2

      Tsm about a 1/3 of what you are describing is truth ‘they are buying NZ dollars and NZ govt stock which is returning 6 to 7 percent forcing our dollar up you idiot much safer returns on govt stock!
      Ask your financial advisor not some rwnj propagandist!

  26. infused 27

    Why pay to see Chopper when I can read this blog. God this is hilarious.

  27. Would someone like to tell me WTF we would want to do the same as our trading partners – that would be like a race to the bottom.

    It is strange to see people of the Left espousing a policy that has led to inflation and the massive redistribution of wealth from the poor and middle classes to the extremely rich.

    QE3 to infinity is the one thing that will destroy the world economy.

    Quit treating this problem as if is soluble – as Richard Heinberg says ‘growth is dead” (

    Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

    )

    If the Greens want to look at something that it should be the ideas of Steve Keen who is advocating a debt jubilee involving a kind of ‘QE for the people’ – giving the money to the people instead of the banks to pay off debt.

  28. chris73 29

    Printing money? Cunliffe wouldn’t be so dumb as to entertain this sort of thinking…would he?

    • Colonial Viper 29.1

      If its good enough for China, Japan, USA, EU, Chile, Switzerland…maybe it’s good enough for us too?

      • chris73 29.1.1

        No it is not. I’ll see your examples and raise you a Germany and Zimbabwe.

        • Colonial Viper 29.1.1.1

          Bullshit. I lay down a full house and you can’t even put together a matching pair. Your examples are a post WW I Germany and the kleptocratic dictatorship of Mugabe. Irrelevant.

          This versus China, Japan, USA, EU, Chile who are all significant and current trading partners.

          We’re in a full scale international currency war and all you want to do is bury your head in the sand. Wake up.

        • RedLogix 29.1.1.2

          Banks and governments print money all the time. (Where the hell do you think it all comes from?) The amount of cash (M0) in this country is about $3b … yet the GDP is around $200b and the M3 is in the order of $400b. All that money is pure credit. All ‘printed’ by banks buddy.

          The hyperinflation booga you keep bringing up has very specific context where there is either a failure of the normal democratic political process, an asset price speculative mania, or a destruction of the productive capacity of an economy. Or some combination of all three.

          It is not the ‘printing’ of money that is the problem, that occurs routinely. It is the misuse of this function that leads to hyperinflation.

          • Colonial Viper 29.1.1.2.1

            Exactly. Destruction of productive capacity, loss of adequate marketplace competition, failure to invest in core productive infrastructure and capability, control of the money supply by speculators are all needed for a genuine loss in price stability to occur.

            • Poission 29.1.1.2.1.1

              Destruction of productive capacity, loss of adequate marketplace competition,

              There is a nice speech from Andrew Haldane head of stability at the Bank of England,

              Back in 2000, financial markets valued global banks at two or three times the book value of their equity saying, in effect, that an investor who had placed $1 with a bank had doubled, perhaps trebled his stake. It should have been no surprise that investors flooded in, resulting in a threefold rise in global banks’ balance sheets in less than a decade, in what was perhaps the largest bank bubble in financial history.

              When that bubble popped in 2007, so too did market valuations. Today, most global banks are valued at a discount – many at a small fraction – of their equity book value. Today, an investor who had placed $1 with a bank would on average have seen that return as little as 50 cents. Once a value-creation machine, banks have become a value-destruction machine; in response, bank investors are seeking shelter and bank balance sheets have begun a crash diet.

              He argues that as banks are too big to fail,then they are too big too price,regulate and manage, eg Ma Bell,

    • mike e 29.2

      C73 But if the double dipstick mentions it you will be the first to defend him won’t you!
      Well at the height of the GFC Borrowing Bills Blinglish said if things got worse it would be an option!

      • chris73 29.2.1

        No I wouldn’t because it simply does not work unless your economy is large enough to handle it or you have virtually nil inflation.

        Prediction time: this will slow the US economic recovery and will in fact make it worse.

        • Colonial Viper 29.2.1.1

          Nah you’re taking shit mate.

          Whether you put $20 into your economy by borrowing it from the Saudis or you put $20 into your economy by Government issue makes no difference whatsoever.

          Get a grip. The shop keeper doesn’t care (and doesn’t know) where the $20 came from.

        • mike e 29.2.1.2

          So when our population was one million it was to small to print money 1935 till the 1070’s we printed money!
          You don’t have a clue do you C73 you are just repeating the Mantra!
          Go read some economics history books before blindly repeating some one else’s Spin!
          Want to place a bet now!
          It worked so well a lot of other countries followed our example!
          Just putting money into the banking system doesn’t work as well as spending on housing for instance!
          But when banks are not lending what do you do Chris just leave the economy floundering!
          Sure giving $45 billion to BofA to rescue the bankrupt corrupt Merrill Lynch was dumb because now the Bank of America is having to find billions more for a second rescue of Merrill Lynch because the firm that shonkey worked for is the most corrupt investment bank in history!

    • Draco T Bastard 29.3

      There’s essentially only two ways to deal with excess debt:
      1.) Inflate it away (Quantitative Easing) or
      2.) Default

      I’d prefer the second option but I don’t think many people would go for it. That leaves us with the first.

      There’s a couple of ways to do that though:
      1.) Government issues bonds which the RBNZ buys increasing the amount of money available to the government. The bonds will be paid off over time and probably have interest on them making them part of the problem
      2.) The government just prints the bloody money with no interest, buys stuff, has stuff built and raises taxes

      The second option is the better option as it would get rid of the unpayable debt that we have but the political parties are trying very hard not to raise taxes.

      • Colonial Viper 29.3.1

        QE is not really the equivalent of “inflating debt away” however, because overall inflation does not need to be impacted if that money doesn’t enter the real economy in an uncontrolled way.

        Financial commentators regard QE more along the lines of a “technical default” as you are paying the debt back, but in a way which was not agreed to and which dilutes the asset value of the debt.

  29. tsmithfield 30

    The problem the Federal Reserve is going to face at some stage is having to unwind the huge positions they have taken.

    One of the positions they have taken is in US Treasuries at very low yields. There is an inverse relationship between yield and value on Treasury securities. So, if the yield goes up (the value of Treasuries go down) then the Fed is going to take an absolute bath on its positions.

    Yields may well rise if other countries (e.g. China) get sick of funding US debt. Even if that doesn’t happen, yields will rise as the Fed tries to unload its positions. This will be incredibly bad for the US economy and will push up interest rates.

    There really isn’t a free lunch, and QE should be the last option, not the first.

    • Colonial Viper 30.1

      So, if the yield goes up (the value of Treasuries go down) then the Fed is going to take an absolute bath on its positions.

      That’s why ZIRP and NIRP will be used to keep kicking the can down the road. Until, as you imply, we run out of road.

    • redfred 30.2

      The Greens aren’t proposing anything like the US; the QE will be exclusively for Chistchurch rebuild and the Natural disaster fund to purchase foreign assets…….that is all, there is no USD target, no bottomless pit of money to be spent. This is why it is so smart, it is for building/purchasing productive assets.

      A side effect of this QE or in this case the Government lending itself money will be a likely reduction in the exchange rate. This will flow through, more tourist spending more manufacturing jobs. Yes consumption of imported goods will fall, this isn’t a bad thing…remember National arguments for increasing GST….to curb consumption and improve saving, much the same argument applies.

      Inflationary risk will be minimal. It is a very targeted use of QE that may do some good, the risk is minimal, we need to fund these projects anyway.

      Key and Joyce are full of shit! 40,000 manufacturing jobs have been lost under their watch. It is a disgrace!

    • mike e 30.3

      What beautiful lies you tell the simple monetarist!
      The US government made $700 million out of the first round of QE most of it all paid back!
      It didn’t cost the tax payers a cent you idiot!
      Before you try arguing it may pay to do some research!
      Then i can go back to calling you the stupid moetarist!

      • OneTrack 30.3.1

        Why are they up to QE3 and counting then? Doesnt Obama have any other options?

        • mike e 30.3.1.1

          OT the republicans are sabotaging any democratic initiative Obama puts forward!
          To make him look bad in the voters eyes.

          • Colonial Viper 30.3.1.1.1

            Mate, voters have a “choice” between the Bankers Party and the Other Bankers Party in the USA.

        • Draco T Bastard 30.3.1.2

          Well, the best option for the US would be to stop protecting the rich from their own actions but that’s not likely to happen due to all the US politicians being either rich themselves and/or fully owned by corporations.

  30. If you want to see which way things are going in tHe USA see this –

    http://www.youtube.com/watch?feature=player_embedded&v=6AsUz_1qIXE

    We won’t be that far behind.

  31. tsmithfield 32

    Anyway, it is a mugs game trying to devalue our currency against the US.

    We are much better to try and keep our currency at a range of 75-77 against the AU. Australia is our biggest trading partner, so having a healthy differential there is a good idea. This doesn’t mean printing money. It just means dropping our interest rate in concert with them. They have just gone down 25 points. We should do the same.

    • mike e 32.1

      The Stupid monetarist!
      You don’t know Jack!
      What value is the Aussie dollar against ours!
      Dropping our interest rates would barely move our dollar any where!
      The banks will still charge what they like!
      Our dollar is welded to the Aussie we need a big Idea not a failed idea!

  32. redfred 33

    What scares Captain Bank of America Key and is it Phil O’Riley or Steven Joyce Steven Joyce about the Greens targeted QE program is it might work.

    Then they have some explaining to do.

  33. tsmithfield 35

    The problem is once we start heading down this direction, and the left catches on to the idea that there is a source of “money” that doesn’t even require tax, then we will be equivalent to Zimbabwe within a decade. :smile:

    • Colonial Viper 35.1

      With the destruction of the NZ manufacturing and industrial base, that’s exactly where Key and English are taking us.

    • mike e 35.2

      The Simple Monetarist the Labour social democrats alliance in 1935 practised that very policy and New Zealand was the first country to recover from the depression.
      right up until the late 60’s the state advances corporation used printed money for housing manufacturing and farm development!
      Inflation wasn’t a problem because productivity kept ahead !

      • OneTrack 35.2.1

        How is productivity going to keep ahead this time?

        • mike e 35.2.1.1

          OT By investing in the right areas of the economy ie Auckland and Christchurch’s housing shortages
          That would bring down the housing bubble and inflation at the same time.
          It would however piss off the big four Aussie banks though because they would not have the easy price gouging ride they have now.
          The National Party are in their back pocket.
          Just look at Westpac’s economic strategy for New Zealand on their website then have a look at Nationals strategy they are identical in every word down to the dots !
          The only difference is the colour ones red and the other blue!
          I’ll let you figure that one out!
          Banking would be another area funding Kiwibank to become a business bank!
          Infrastructure
          Research and development!

    • Draco T Bastard 35.3

      Strange, the “left” seem to think this idea of printing money comes with some limitations. The RWNJs, on the other hand, think that the private banks printing money has none whatsoever.

  34. captain hook 36

    I dont care as long as I can buy some houses, rack rent them and call myself a capitulist.

  35. KJT 37

    All the howls about Zimbabwe and the Weimer republic forget that their productive sectors were first destroyed, before they started printing money when there was nothing to buy with it.

    Not a lot different from Nationals present efforts!

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

    • Exactly if all the other banks in the world are doing it, why aren’t isn’t the Reserve Bank of NZ?
      (Some freakin contract they signed MAYBE?)

      Instead we’re bailing banks out with taxpayer dollars ….. who was meant to veto those investments?
      The Gnats’ that’s who, It’s all gone under for them, and they’re denying it and blaming our welfare system.

      Meanwhile, jobs are being lost cos they let the banks run rampant with our pensions which they promptly lost in most cases.

      And the Gnat’s want to pull back on Welfare, the one answer to those peoples problems since the collapse of SCF and many others.

      Add major damage too Christchurch, insurance companies with no cash, and no one to underwrite them (Which is what the EQC is all about apparently).

      As always it’ll be good people that fix the problems one by bloody slow one,
      Gnat’s will sit back afterwards claim the success for their own
      But the fact is they did nothing.

  36. OneTrack 38

    The Greens alway dreamt of an unlimited money tree and now their prayers have been answered, and its got a much sexier name that “printing money”. Whats not to love?

    • mike e 38.1

      One trick phoney did you know our PM got between $5 to $10 million of his wealth from the federal reserves QE1 ML was saved from insolvency by printed money funny that!
      BofA got $45 billion US of printed money to save Merrill Lynch!
      Otherwise Key would not be as rich as he is today!
      New Zealand is borrowing a lot of printed money (52 Billion)at between 6and7% thats only costing the lender 1/2%!

  37. Jeff 39

    What Keys is really doing when he insults this policy is drawing a line in the sand, one between the mega rich and everybody else. He’s making it clear that banks will not be for the virtue of the people, but for the continued siphoning of money, the funnel down which we pour our lives, feeding the relentless cogs of the wealth extraction machine.

    What really makes me angry about The PM’s “whacky” comments is that this denigrative political rhetoric is the norm in NZ, and sadly many will swallow this down with a swig of nasty NZ red, fall back into thier pseudo middle class slumber, content with their share of the crumbs, their SSRIs and three dollar lunches. Rats in the cage squabling over the last shreads of rancid bread.

    I dont know if its sad or pathetic, or something else, what I do know is the voice of the sleeping giant is roused in Europe, but for the most part remains docile. While Athens burns Stockholm sleeps, the pain is not felt everywhere, yet, and most believe it can’t happen here. Is that the definition of denial? Use the same tools, same rules, expect a different outcome. For fucks sake, these banks are all owned by the same people, you really think NZ wont crash and burn? You’d have to be stupid, or lied to, convincenly, over decades. The wealth extraction machine is a slow grind to an inevitable conclusion. The USA is close, Greece on the edge, the lemmings are lined up behind them. Go on NZ, take the leap, suicide might be a fine alternative to surfdom.

    Most do not believe the true disparity between the obscenly rich and everyone else, cognitive dissonance someone else mentioned, easier to believe in the myths we are sold in fairlytails, the lies we are told in school, lies our uneducated parents rarely questioned, those which the meek and powerless accept as their lot, those which the likes of Keys will regurgitate add inifitum, anything to protect the legalised rackettering we call banking.

  38. It’s not the fact that Russell Norman wants to print money out of thin air. Heck everybody else is. It is the fact that he wants to do it within the interest/Debt system killing the global economy. It shows him up for the ignoramus that he is and for a leader of a “Green” party who needs to emphasize the unsustainablility of the current extraction and destruction economy that is inexcusable!

  39. TightyRighty 41

    http://www.dailymail.co.uk/news/article-2215301/Annuity-rates-gone-freefall–Money-printing-triggers-slump–worse.html

    fuck the savers, people who are actually sensible with their money. Oh, and the oldies. them too. QE is a continuation of the system most pro-standardites hate. Just too intellectually bankrupt to realise.

    • RedLogix 41.1

      I sort of agree.

      The problem has been that QE so far has been targetted at buying bank bonds to inject liqidity into the banking system. But as Steven Keen has forcefully demonstrated over and again, when the system is debt saturated this does not have intended effect because no-one wants to borrow.

      If instead the money was directed at the people directly, for instance in the form of a Universal Basic Income or in the form of a large lump sum to everyone on the condition that if you have debt it must be repaid then the debt would be rapidly unwound and the real economy would get going again.

      • insider 41.1.1

        “on the condition that if you have debt it must be repaid”

        How could that be enforced? I don’t think it could realistically. Would it only apply to formal debts with contracts? What about undocumented loans between family members. Just cut out the middleman and just give it to banks and finance companies direct if that’s your aim. Their shareholders will love it…

        • Colonial Viper 41.1.1.1

          Dude, wtf, its not debts between family members and mates which are weighing down the balance sheets of this country.

          Just cut out the middleman and just give it to banks and finance companies direct if that’s your aim. Their shareholders will love it…

          Another wtf from you. Banks and their shareholders would hate to see their income producing asset base destroyed in this fashion. They are definitely not going to “love it”.

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  • Address and Reply Debate Part 55: Inequality and Disability
    I rise on behalf of the Green Party to talk about inequality and disability.The recent census showed that nearly one in four New Zealanders lives with a disability—up from one in five in the previous census. These figures include some...
    Greens | 28-10
  • Child poverty: No more wake-up calls
    A new report which shows the National Government has made no inroads whatsoever into child poverty should do more than just set alarm bells ringing, Labour’s Acting Deputy Leader Annette King says. “UNICEF’s  latest Innocenti Report Card highlights the fact...
    Labour | 28-10
  • Eugenie Sage speaks in the 2014 Address in Reply Debate
    I congratulate you, Assistant Speaker Mallard, as Assistant Speaker and look forward to your knowledge, your fairness, and your light touch in being a referee of proceedings in this House. I congratulate also the other Assistant Speaker, Lindsay Tisch; the...
    Greens | 28-10
  • James Shaw’s Maiden Speech
    Tena Koe, Mr Speaker. I would like to take this opportunity to speak a little of the past, the present and the future. The privilege to serve in this Parliament was given to me by all those who gave their...
    Greens | 28-10
  • Govt airs real views on public broadcasting
    An admission by the Government that it is happy to experiment with Pacific and Maori audiences shows just how weak its vision for public broadcasting in New Zealand is, Labour’s Broadcasting spokesperson Kris Faafoi says. “National today admitted it doesn’t...
    Labour | 28-10
  • Does Judith Collins have a get out of jail card?
    Former justice minister Judith Collins appears to have been gifted a get out of jail free card based on the Prime Minister’s answers in Parliament today, Labour’s Acting Deputy Leader Annette King says. “Judith Collins claimed in an Official Information...
    Labour | 28-10
  • Solid Energy decision delay sensible
    Today’s announcement by the Board of Solid Energy that it will delay making a final decision on re-entering the Pike River mine is a sensible move, Labour’s MP for  West Coast-Tasman Damien O’Connor says. “It has been clear for some...
    Labour | 28-10
  • New York Green Bank off to a $1B start
    New York Governor Andrew Cuomo announced late last week the New York Green Bank’s first NZD$1 billion tranche of green energy investments. The projects, which are difficult for the private sector to finance, are now possible by New York Green...
    Greens | 28-10
  • GUEST BLOG: Blockade the Budget
    The ‘Independent’ Police Conduct Authority’s report into the policing of student protests in 2012 is a whitewash The report released by the Independent Police Conduct Authority into the policing of student protests in 2012 is a whitewash riddled with inaccuracies....
    The Daily Blog | 30-10
  • When National claim new anti worker laws provide ‘flexibility’ they mea...
    And so it comes to pass. The first law National ram through as part of their victory march are new anti worker laws they pretend will generate ‘flexibility’. The new law denigrate the unions ability to protect workers and provide...
    The Daily Blog | 30-10
  • City Transport: A Taxing Matter
    This week the prospect of paying tolls on Auckland motorways became a hot topic. (See Mathew Dearnaley:Motorway tolling could hit some hard, NZ Herald, 30 Oct 2014.) As we might expect, the kneejerk response has been quite negative. But, as with...
    The Daily Blog | 30-10
  • Open Letter to Amy Adams: Please Reopen The Review Into Sexual Violence Cou...
    Ms Amy Adams, Justice and Courts Minister, Right now in this country it seems that although rape is illegal, it is not being prevented by the agents who uphold the law. It almost feels like rape is only illegal on paper,...
    The Daily Blog | 30-10
  • MEDIA WATCH: Does ‘No-Surprises’ Also Apply To TVNZ News?
    When you stand back and look at NZ media outlets, most of them have at least one or two people who attempt to hold the government to account: John Campbell on TV3, Guyon Espiner and others at Radio NZ, David...
    The Daily Blog | 30-10
  • Things That Make You Go Hmmmmmmm
    Every so often in politics, a public figure comes out with something so absurd and so outlandish … that it really does just make you go “Hmmmmmmmmmm”. We’re accustomed to this from certain quarters – by mid point through the...
    The Daily Blog | 30-10
  • Poverty & inequality don’t need protest marches – they need a riot:...
    The global level of inequality continues to skyrocket… Number of billionaires doubled since financial crisis The number of billionaires has doubled since the start of the financial crisis, according to a major new report from anti-poverty campaigners. According to Oxfam,...
    The Daily Blog | 30-10
  • If Key knows who Rawshark is…
    I’m sorry, what? John Key ‘given Rawshark’s name’The Prime Minister believes he knows who hacked Whale Oil blogger Cameron Slater’s computer and produced the source material for Nicky Hager’s Dirty Politics, according to a new edition of a recently published...
    The Daily Blog | 30-10
  • Child Poverty stats in NZ
    Child Poverty stats in NZ...
    The Daily Blog | 30-10
  • Crimes Act + Police Investigation = WTF
    Just to frame the farce that is the Roastbuster’s investigation and conclusion – here are the parts of the Crime Act http://www.legislation.govt.nz/act/public/1961/0043/latest/whole.html#DLM329057  the Roastbusters are proven to have violated – that the police (and some suspects!) themselves acknowledge occurred: Crimes...
    The Daily Blog | 29-10
  • Publishing Journalists’ Home Addresses Is A Tactic Of The Right, Not The ...
    I think I’m starting to get rather annoyed with the conduct of some pro-MANA people over this ongoing Parliamentary Services crew complement issue. Yes, we get that there are legitimate issues to be raised with how some political reporters in...
    The Daily Blog | 29-10
  • Aucklanders caught between a tarseal-addicted government and a weak mayor
    Len Brown’s proposal for motorway tolls to reduce congestion and provide funding for better public transport is a weak response to a critical issue. The $12 billion dollar shortfall on transport funding he talks about is mainly for projected new...
    The Daily Blog | 29-10
  • A Very Weird Story: Deconstructing Darren Aronofsky’s Noah.
    NOAH is a curious movie. Conceived as a biblical epic, it’s target audience was originally the millions of Americans who regard the Bible as God’s inerrant word. With the sin-filled works of Hollywood forbidden to these true-believers, Christian movie-makers have developed...
    The Daily Blog | 29-10
  • You Can Get Away With Rape In New Zealand
    Jessie Hume with last years petition against rape     The police have sent a strong message today.  In fact they’ve been sending a strong message for a while; a message that our government supports. “You can literally get away...
    The Daily Blog | 29-10
  • Roast Buster case – no charges. In the immortal words of NWA…
    Roast Busters case: No prosecutions Police are to make an announcement this afternoon on Operation Clover, the investigation into the “Roast Busters” allegations. The Herald understands the victim has been told that the alleged offenders will not be prosecuted due...
    The Daily Blog | 29-10
  • Key’s flag change distraction to cost $26million!
    No. Way. Bid to change NZ flag to cost millions The cost of holding two referendums and consulting on a change of flag has been estimated to be just under $26 million. Look. We all appreciate that the sleepy hobbits...
    The Daily Blog | 29-10
  • Why NZ Herald’s Labour Party crocodile tears are so audacious
    The front page the NZ Herald would use if they thought they could get away with it No one can take the recent columns by NZ Herald seriously… John Armstrong: Shadow lingers on National John Roughan: Labour’s leadership vote matters...
    The Daily Blog | 28-10
  • The beginning of the end of Cameron Slater?
    Slater postings on man bizarre, court told A businessman has changed his appearance and had to install extra security at his home after Whale Oil blogger Cameron Slater posted his business and personal documents online, he says. Mr Slater has...
    The Daily Blog | 28-10
  • We are a milk power republic and Fonterra our unelected senate
    Wow. Just wow… Deputy mayor says he’ll be sacked South Taranaki deputy mayor Alex Ballantyne says he expects to be sacked because he has spoken out about the impact gasses coming from dumped Fonterra dairy products have had on his...
    The Daily Blog | 28-10
  • MEDIA WATCH: “…But *actually* this is about ethics in political-game jo...
    Yesterday, a piece of mine on the recent revelations about Hone Harawira employing several gentlemen either accused or convicted of sex offences was published on The Daily Blog. Predictably, given the fierce loyalty which Hone inspires in his party faithful and...
    The Daily Blog | 28-10
  • Privilege cheque
    There was no race problem in my childhood. Living in central Wellington I was well-insulated from what was going on not so far away. This was the 60s and 70s, where the teachers enjoyed free love in the staff room...
    The Daily Blog | 28-10
  • A brief word on Key’s claim that it will be raining carnage
    Isis will ‘rain carnage on the world’ – John Key Left unchecked Isis would “rain carnage on the world”, Prime Minister John Key says, but he has yet to make a decision on whether New Zealand troops will join a...
    The Daily Blog | 28-10
  • Meanwhile…
    ...
    The Daily Blog | 27-10
  • How does Andrew Little win Labour Leadership and unify the caucus?
    Audrey Young’s excellent column on how the Caucus vote  is shaping up shows how Andrew Little becomes the next leader of the Labour Party. She identifies the factions as the following… Andrew Little 6: Andrew Little, David Cunliffe, Iain Lees Galloway,...
    The Daily Blog | 27-10
  • GUEST BLOG: Joe Trinder – Right of response to Curwen
    You have asked that Hone Harawira deserves to explain what happened, how would he explain when his next door neighbour is an alleged sex offender. What explanation can Hone offer he wasn’t involved, Hone had no idea this offending was...
    The Daily Blog | 27-10
  • MEDIA WATCH: That Hella-Weird Feeling When You Defend Tova O’Brien
    Oh dear. Yesterday morning I blogged that Hone deserved a chance to explain what exactly had happened as applies his office’s Parliamentary Services crew complement – and, importantly, that we deserve to be able to judge him on the strength of...
    The Daily Blog | 27-10
  • Canadian Green MP warns against harsh anti-terror measures
    Canada’s Green Party has provided a welcome counterpoint to Prime Minister Harper’s call for tougher anti-terrorism laws in the wake of a soldier outside the Canadian Parliament. On October 22, while she was still locked in her parliamentary office, Green...
    The Daily Blog | 27-10
  • When is an asset sale not an asset sale? When it robs from the poor and ste...
    National have turned state housing on its head. At no time during the 2014 election did the Key Government even hint that they were going to privatise 30% of the Housing NZ stock of state homes. Not once. Key even...
    The Daily Blog | 27-10
  • Housing; broken promises, families in cars, and ideological idiocy (Part To...
    . . Continued from: Housing; broken promises, families in cars, and ideological idiocy (Part Rua) . Bill English comes clean on National’s intentions for HNZ privatisation . On 14 October, in a report on The Daily Blog, I wrote, In...
    The Daily Blog | 27-10
  • The Questions Have Been Asked – They Deserve An Answer
    A few days ago, allegations that had been percolating for some time about Hone Harawira employing three either accused or convicted sex offenders on his Parliamentary pay-roll came to light. (one imprisoned before working for MANA; one who found himself convicted and...
    The Daily Blog | 26-10
  • I have seen one future, and it is bleak
    . . Back in  March 2012, I wrote this story regarding a march to support striking workers at Ports of Auckland. It appears there was some prescience about some of my observations at the time… . | | 18 March...
    The Daily Blog | 26-10
  • US air strike war Key wants us in has killed a civilian a day so far
      The US air strike war that John Key wants us to join has killed a civilian a day so far. From the Washington Post... The United States launched its first airstrikes on militants in Syria on Sept. 23, and has continued...
    The Daily Blog | 26-10
  • The instant Jihad syndrome
    My favourite new term is ‘self-radicalised’ – it suggests the reasons for terrorism are totally divorced from the actions of the West. This need to suddenly ramp up terror laws because of lone wolf, self-radicalised Jihadists seems convenient and counter-productive....
    The Daily Blog | 25-10
  • We have nothing to fear from Ebola but fear itself
    I suspect most Americans perceive Ebola like this   I can’t work out if the fear being spread within the media about Ebola is deliberate or just ignorance. Yes Ebola is a terrible plague that kills a large percentage of...
    The Daily Blog | 25-10
  • GUEST BLOG: Anjum Rahman – “Meritocracy? I wish.”
    I’d like to start by linking to a post I had published at another site in support of Nanaia Mahuta for the Labour Party leadership election.  She has a reasonable chance, given that she already has the endorsement of Te...
    The Daily Blog | 25-10
  • Chocolate milk shortage and creepy Santa? Let’s talk about real news
    Child poverty is still a scarily serious problem in this country and house prices are soaring through the roof to the point where it is simply impossible for the average New Zealander to buy a home. There is also little...
    The Daily Blog | 25-10
  • It’s time to celebrate Kiwi schools and teachers
    Some would have you believe that New Zealand’s schools are in a state of collapse, that your children are not being educated well and that things are going to hell in a hand basket.  That there is no innovation, no...
    The Daily Blog | 25-10
  • Ideological Blitzkrieg – Privatization of state housing, more charter sch...
    Pundits in pundit land will tell you that this Government is boring, that Key is the great pragmatist and that it is his ability to create elegant solutions that keeps him the firm favourite in many Kiwi eyes. This ability...
    The Daily Blog | 24-10
  • Hegemony rules but resistance is fertile
    The Prime Minister is a puppet. Not just our current Prime Minister, but given the forces of multinational globalisation, the role of any head of state, is less as independent actor, and more as a puppet of international trends and...
    The Daily Blog | 24-10
  • An open Letter to Sir Bob Jones: demanding a ‘liveable wage’ is not “...
    How out of touch with reality is Sir Bob Jones? You know, that white dude who invested in privatised SOEs after the selling off of our assets in the eighties and made a ludicrous and disgusting amount of money and is...
    The Daily Blog | 24-10
  • My insecurity about the Security Council
    As I write this (on 24 October) it is international UN Day. Of course, you all knew that already, right? Well, the day celebrates the entry into force of the UN Charter in 1945. With the ratification of this founding...
    The Daily Blog | 24-10
  • GUEST BLOG: Catherine Delahunty – Back in That House
    Parliament opened this week and I still find it a very odd place. Most of the people are reasonably courteous and friendly, but the rituals are archaic and the rules around issues like the swearing in oath are oppressive and...
    The Daily Blog | 23-10
  • Marae Investigates No More
    TVNZ yesterday announced the closure of their Māori and Pacific programmes department. That means they’ve chosen to stop making Fresh, Tagata Pasifika, Waka Huia and Marae Investigates to let independent producers get their hands on these lucrative contracts. This is...
    The Daily Blog | 23-10
  • BLOGWATCH: An Un-Civil War in Labour, eh?
    Earlier today, my attention was directed to an entry that’s just recently appeared on the Slightly Left of Centre blog. It purports to contain the ‘inside word’ from a highly placed NZF source – which is funny, because I’m pretty sure...
    The Daily Blog | 23-10
  • Santanomics 101
    Santanomics could mean a number of things. It could be the study and practice of giving. Or it could mean the study and practice of rampant end-of-year commercialism. However, for me today it is the economics of erectingAuckland’s giant Santa...
    The Daily Blog | 23-10
  • SkyCity boss misleads public over workers lost shifts
    SkyCity CEO Nigel Morrison has defended the employment practices at his company in an “Opinion” piece entitled “Human Capital key to corporate success” in the NZ Herald on Thursday. A number of his claims are misleading, contain only partial truths...
    The Daily Blog | 23-10
  • Review: Perfect Place
    I went to a Perfect Place on Tuesday night, and what a delight it was. The marshmallows sweetly (and forcefully) handed out pre-show, set the tone for the next hour. Walking up the stairs at The Basement was a complete...
    The Daily Blog | 23-10
  • 5AA Australia – NZ on UN Security Council + Dirty Politics Lingers On
    5AA Australia: Selwyn Manning and Peter Godfrey deliver their weekly bulletin Across The Ditch. General round up of over night talkback issues: Thongs, Jandals and flip-flops… ISSUE 1: New Zealand has been successful in its campaign to become a non...
    The Daily Blog | 22-10
  • When I mean me, I mean my office & when I call whaleoil I mean not as m...
    This. Is. Ludicrous. Green Party co-leader Russel Norman put the first of what are likely to be many questions about Mr Key’s relationship with Slater, asking him how many times he had phoned or texted the blogger since 2008. “None...
    The Daily Blog | 22-10
  • A brief word on describing the Government as ‘boring and bland’
    The narrative being sown is that this Government will be a boring and bland third term. Boring and bland. Since the election, Key has announced he is privatising 30% of state houses without reinvesting any of that money back into housing society’s most...
    The Daily Blog | 22-10
  • Roast Busters: Turn Indignation into Action
    People raged about the Roast Buster case. The indignation was justified – it was horrible. “Where were their parents!?” Fair question. I am sure the Roast Busters’ parents and the victims’ parents all wish they had been more proactive in...
    Scoop politics | 31-10
  • Stats NZ only have themselves to blame for postponement
    The Public Service Association (PSA) says Statistics NZ only have themselves to blame for the indefinite postponement of the release of the Food Price Index: November 2014....
    Scoop politics | 31-10
  • NZ Diversity Survey – benchmarking workplace diversity
    AUT University’s New Zealand Work Research Institute (NZWRI) has released a report on diversity in New Zealand workplaces....
    Scoop politics | 31-10
  • Māori Language (Te Reo Māori) Bill
    Tutehounuku Korako, Chair of the Māori Affairs Committee, is inviting further public submissions on this bill. The closing date for submissions is Friday, 5 December 2014....
    Scoop politics | 31-10
  • ERA amendments a mixed bag
    The Employment Relations Amendment Act has the potential to put vulnerable workers in a more precarious position, says Equal Opportunities Commissioner, Dr Jackie Blue. However, the commissioner says the right for all to request flexible work hours is...
    Scoop politics | 31-10
  • Sensible Sentencing calls for appeal of judicial activivism
    The Sensible Sentencing Trust is appalled that Justice Jill Mallon has today refused to apply the Life without Parole (LWOP) provisions of the Three Strikes law as enacted by Parliament....
    Scoop politics | 31-10
  • Global Rally against ISIS – for Kobanê – for Humanity, Nov 1
    The New Zealand Kurdish Community will march in solidarity with Kurdistan as part of the “GLOBAL RALLY AGAINST ISIS – FOR KOBANÊ – FOR HUMANITY” on 1 November 2014, 2pm....
    Scoop politics | 31-10
  • Does ‘No-Surprises’ Also Apply To TVNZ News?
    When you stand back and look at NZ media outlets, most of them have at least one or two people who attempt to hold the government to account: John Campbell on TV3, Guyon Espiner and others at Radio NZ, David...
    Scoop politics | 31-10
  • Safer roads are better for everyone
    Recent pedestrian versus vehicle incidents highlight the real issues being addressed by delegates as the 2Walk and Cycle conference concludes....
    Scoop politics | 31-10
  • Law change creates more flexible labour market
    The Employment Relations Amendment Act, passed yesterday, will bring new flexibility to the labour market and will reduce the ability of unions to organise and to recruit....
    Scoop politics | 30-10
  • Bumper ANZ profits mean no excuse for insecure hours
    A big rise in profits at New Zealand's largest bank needs to be reflected in a better pay offer and more security around hours of work, the bank workers’ union said today....
    Scoop politics | 30-10
  • Count down to lowered alcohol limit
    With just a month to go until a new lower alcohol limit for adult drivers comes into effect, Police and road safety agencies are reminding drivers of the impending change....
    Scoop politics | 30-10
  • WorkSafe Supports Forestry Review Findings
    WorkSafe NZ says the Independent Forestry Safety Review has clearly identified the problems facing an industry in which ten workers were killed last year. “The Review’s analysis matches our own view and leaves no doubt about the need for comprehensive,...
    Scoop politics | 30-10
  • CTU welcomes forestry review recommendations
    The CTU is welcoming the today's release of the independent forestry safety review panel findings. "These recommendations must be implemented to ensure that everything possible is done to make forestry safer." CTU President, Helen Kelly said....
    Scoop politics | 30-10
  • Activists will confront animal abusers
    Today animal rights activists will confront a group of wealth advisers who want to build the biggest egg factory-farm in New Zealand....
    Scoop politics | 30-10
  • Turia: Women’s Refuge Conference 2014
    This is a milestone moment in my life. This will be my last official address as Co-leader of the Maori Party. On Saturday night at our Hui-a-Tau, I will be standing down from that role and enabling a new co-leader,...
    Scoop politics | 30-10
  • Rodeo Code of Welfare ‘Sick Joke’
    Animal advocacy organisation SAFE says the revised Code of Welfare for Rodeos just released is nothing but a sick joke. “Rodeo animals are goaded, tormented and forced to endure needless suffering and gross mistreatment, all for the sake of so-called...
    Scoop politics | 30-10
  • Conservative Party applauds binding referenda on flag
    The Conservative Party are congratulating the Government on the decision to hold two binding referendums to decide the fate of New Zealand’s flag – and believes it will pave the way for binding referenda to form part of New Zealand...
    Scoop politics | 30-10
  • Walk the Talk – Opposing violence against women
    Soroptimist International of Auckland have organised a walk on 22 November from Silo Park at the Wynyard Quarter through the Viaduct and back to Silo Park, to show their opposition to violence against women. This event hopes to raise awareness...
    Scoop politics | 30-10
  • Recommendations on the Design of Pecuniary Penalties
    The Law Commission has reviewed the use of pecuniary penalties as a regulatory tool. Pecuniary penalties are financial penalties that policymakers are increasingly opting to use in place of criminal sanctions in order to punish and deter misconduct in...
    Scoop politics | 30-10
  • Every worker will be affected by employment law changes
    Every worker will feel the effects of the government’s new employment laws and should join a union if they want to maintain and increase their wages and conditions, says New Zealand’s largest private sector union, the EPMU....
    Scoop politics | 30-10
  • Shameful attack on all workers
    The Government has passed the Employment Relations Amendment Act slashing the rights of all Kiwi workers. “These changes are shameful. New Zealand now has some of the worst employment protections in the OECD. It is embarrassing that a country which...
    Scoop politics | 30-10
  • Unnecessary law changes more to do with ideology
    The government’s employment law changes are simply ideological and are at odds with its approach in the related areas of health and safety and immigration law, FIRST Union said tonight....
    Scoop politics | 30-10
  • CTU Runanga calls on iwi leaders
    Maori workers are calling on iwi leaders to speak out against the employment law changes expected to go through today. “Iwi leaders have previously spoken out when workers in Aotearoa have been under attack, we believe they should do so...
    Scoop politics | 30-10
  • Educating children not the best solution to alcohol harm
    Alcohol Healthwatch says we need to look beyond educating children and young people to address deeply embedded attitudes and behaviours concerning alcohol....
    Scoop politics | 30-10
  • New code of welfare for rodeos released
    New standards to strengthen the animal welfare requirements for rodeos have been issued today by the Minister for Primary Industries, Nathan Guy....
    Scoop politics | 30-10
  • IPCA report riddle with inaccuracies, say students
    A report by the Independent Police Conduct Authority into the policing of student protests in 2012 is riddled with inaccuracies, say students who laid the original complaint with the IPCA....
    Scoop politics | 30-10
  • CT v The Queen – indecency convictions quashed
    This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment. The full judgment with reasons is the only authoritative document. The full text of the judgment...
    Scoop politics | 30-10
  • Rameka v The Queen – murder convictions quashed
    This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment. The full judgment with reasons is the only authoritative document. The full text of the judgment...
    Scoop politics | 30-10
  • Auckland Council Out of Control
    Responding to the NZ Herald article that some Auckland households will face a rates rise of up to 9.6 per cent next year, Taxpayers’ Union Executive Director Jordan Williams says: “Len Brown’s pledge to cap rates rises at 2.5 per...
    Scoop politics | 30-10
  • Stats NZ staff escalate action with ‘no more meetings’ rule
    Statistics NZ staff have voted to escalate their ongoing industrial action in an effort to get Stats NZ back to the bargaining table with a reasonable offer. The staff, who are members of the Public Service Association (PSA), have been...
    Scoop politics | 29-10
  • Rape Crisis calls for changes to criminal justice system
    Wellington Rape Crisis has added its voice to the public outcry following the announcement that there will be no charges in the teen rape gang case. Butterworth says the decision not to lay charges will not have been a surprise...
    Scoop politics | 29-10
  • Police action justified in Blockade the Budget demonstration
    Police actions in dealing with a demonstration in Central Auckland known as Blockade the Budget on 1 June 2012 were justified and appropriate, an Independent Police Conduct Authority report released today found....
    Scoop politics | 29-10
  • NZDF Joins with Australia to Commemorate WWI Centenary
    A contingent of New Zealand Defence Force (NZDF) personnel will join their Australian counterparts at Australia’s first major commemoration of the First World War centenary in Albany, Western Australia this weekend....
    Scoop politics | 29-10
  • Reserve Bank should reduce interest rate
    “The Reserve Bank should be reducing its policy interest rate, the OCR”, says CTU Economist Bill Rosenberg in response to the Bank’s announcement today that it is not increasing it....
    Scoop politics | 29-10
  • 2015 Stout Fellow will write about Māori & Criminal Justice
    Kim Workman, founder and advocate for the Robson Hanan Trust, which administers the Rethinking Crime and Punishment and Justspeak initiatives, has been awarded the 2015 John David Stout Fellowship at Victoria University....
    Scoop politics | 29-10
  • What John Key thought about ‘dirty politics’
    On September 20, John Key swept to victory to become one of New Zealand’s most successful and popular Prime Ministers. Rocked by scandal, the 2014 election campaign was one of the most brutal – and riveting – in recent history....
    Scoop politics | 29-10
  • Trade Deal Threatens Farmers and Food Businesses
    The secret Trans Pacific Partnership negotiations are a direct threat to food businesses and farmers, and a moratorium on the release of GE crops must be enshrined in law before the TPP is signed....
    Scoop politics | 29-10
  • CTU announces election of new Secretary
    The contested election for the position of CTU Secretary has been won by Sam Huggard. Sam officially takes office on Monday 1 December 2014. Sam has worked in the union movement and brings a wealth of experience and a commitment...
    Scoop politics | 29-10
  • Kim Workman awarded 2015 J.D. Stout Fellowship
    The Victoria University of Wellington 2015 J.D. Stout Fellowship, funded by the Stout Trust, has been awarded to justice reform advocate Kim Workman. Mr Workman (Ngati Kahungungu ki Wairarapa, Rangitaane) is well known for his work on criminal justice,...
    Scoop politics | 29-10
  • TPPA causing concern
    Concern over the secretive Trans-Pacific Partnership Agreement (TPPA) negotiations is being expressed in two public meetings over the next week; one at a presentation on 5th November by former councillor Robin Gwynn to the Napier City Council, the...
    Scoop politics | 29-10
  • Kiwis rally to demand justice for ‘Roast Buster’ survivors
    Over 1,500 kiwis have rallied to demand justice after the announcement of the NZ Police decision not to lay charges in the ‘Roast Busters’ saga....
    Scoop politics | 29-10
  • New employment law will hurt the most vulnerable NZers
    The Public Service Association (PSA) says changes to the Employment Relations Act, expected to be passed in Parliament tonight, will hurt vulnerable workers and their families more than anyone....
    Scoop politics | 29-10
  • Consultation to close on proposed place names
    The New Zealand Geographic Board (NZGB) Ngā Pou Taunaha o Aotearoa today advised that only one month remains before public consultation closes for 18 name proposals for geographic features and places around Te Ika ā Māui (the North Island)....
    Scoop politics | 29-10
  • Operation Clover – Statement from Police Commissioner
    I have taken a close interest in this investigation and I am confident police have conducted a thorough and professional enquiry in what has been a challenging and complex case. The Operation Clover team has ensured that victims have been...
    Scoop politics | 29-10
  • Better policy would have protected children from recession
    Child Poverty Action Group says an international report released by UNICEF today shows good policy can protect and improve child well-being, even during a recession....
    Scoop politics | 29-10
  • Outcome of Operation Clover investigation
    Police have completed a multi-agency investigation, Operation Clover, into the activities of a group calling themselves “The Roast Busters”. The 12 month enquiry focused on incidents involving allegations of sexual offending against a number of girls...
    Scoop politics | 29-10
  • False birth registration brings home detention
    A Whangarei woman who attempted to register the birth of a fictitious child to claim a sole parent benefit was sentenced to six months home detention in the Whangarei District Court today....
    Scoop politics | 29-10
  • Family of Robert Ellis demand a proper investigation
    The family of a New Zealander killed in Indonesia are growing increasingly concerned at the lack of information they’ve received, and the handling of the investigation into his murder....
    Scoop politics | 29-10
  • Minister of Health must account for aged care workers’ pay
    The New Zealand Federation of Business and Professional Women (BPW NZ) congratulates rest-home worker Kristine Bartlett on her landmark claim for equal pay from her employer and successfully pursuing this to the Court of Appeal....
    Scoop politics | 29-10
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Current CO2 level in the atmosphere