Written By: - Date published: 8:24 am, September 17th, 2008 - 70 comments
Categories: election 2008, john key, national, slippery -
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Yesterday, John Key “attacked Labour’s economic record, which he said amounted to overtaxing voters so it could put money into its pet projects”
So, what are these ‘pet projects’ and which of them National would cancel?
Well, Labour’s major spending projects have been increasing the health budget, spending more on transport (including roads, unfortunately), more money for education, interest-free student loans, more State houses with lower rents, Working for Families, 20Free childcare, higher superannuation payments, Kiwibank, Kiwisaver, Kiwirail, and lower doctors’ fees.
And National would cut which of these? Well, they say they won’t cut any but Key’s words (plus the secret agenda tapes) show that National would get rid of them if they could find an excuse.
Oh and growth under Labour has been far better than it was under National – not only faster than National could manage but faster relative to our trading partners.
It’s the details that matter but Key hopes you don’t know them and that no-one will think to ask.
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Scoopit!
Sorry Tane,
But it’s so much fun to give people something to think about with regards to Slippery John.
But it’s so much fun to give people something to think about with regards to Slippery John.
But people don’t read long comments Ev. I’m no fan of Key and I don’t read your comments because they’re too long. You’ll have more impact if you keep it short and punchy.
(I’m guilty of the same verbosity on occasion, I know!).
r0b
You may be no fan of Key but it’s a safe bet that that if Eve is convinced he’s Satan that the truth is probably somewhat different.
Lots to respond to…
Terry;
A better way to word that question would be; what would the level of unemployment be doing now if we still had old-style centrally-structured markets. I contend it would be much higher than it is now. You’re likely to say the opposite. With asset prices, I’d say it’s fairly clear that housing has been ‘overpriced’ for a while now. Having them decline is exactly what they should be doing now.
I guess that’s the beauty of economics; every answer to every question should include “on the other hand…”
PB;
Fed Bail-outs – Given that we can’t turn the clock back, would it be better to let the AIG fail (a-la Lehman Bro’s) or have the Fed bail it out and not have others go down with it? Theres a balance between macro-financial stability and moral hazard… I personally think the Fed is doing it about right.
Trav,
Glad to see we agree on something – I hope you get proved wrong too!
The US still generates about 25% of global GDP – might be slightly lower with the recent growth of China – but is still the single largest economy on the planet. Saying they’re bankrupt is a little bit like saying that putting a hydro-dam on a river means it’s running dry.
Even if they go into recession, the massive cashflow they generate is still more than enough to service their debt on a national level. The drop in oil prices will help in this respect to.
In terms of banks – 1,000 sounds like a scary number, but in terms of the total number of banks in the US, that’s actually pretty small. The impression I got from the link you posted yesterday was that these banks would not ‘fail’, but be swallowed up in a rationalisation – similar to what is happening here where finance companies are buying up and merging with smaller competitors. This is a good thing.
Cap: ‘Goldman recalled’
But not Sachs…?
Spooky
Phil, didn’t say anything like that. I was saying that the bailouts are acting as a buffer to systemic meltdown. So really I agree, but I think that we shouldn’t lose sight of the fact that what we’ve got here is a pretty large market failure. The derivatives that were supposed to save us, have not. No one could work out what the paper was worth. Who comes to the rescue? That would be the poor bloody tax payer.
For the best part of 30 years we have been fed a line that the market knows best that regulation is red tape, and that neoliberal ‘reform’ is a necessary and ongoing process. (ref any paper from the CIS, BRT, Heritage foundation, AEI etc in the last 3 decades). Well here’s your results folks. Governments are kind of handy aren’t they?
I’m waiting for some mea culpas, but not holding my breath.
What I don’t want to hear about for the next 30 years from those folks is one damn word about the moral hazard involved in welfare payments. Deal?
r0b,
I have no problems with longer posts, must be your sound bite trained attention span, try reading a book once in a while.
Higherstandard,
Dipshit, You should try some of the links that actually support what I state. I do not put anything here that is not supported by for example Newspaper articles about Andrew Krieger and his career timeline. Online archives are a great resource.
John Key = Satan. No, more like a foot soldier for his money masters.
Lord Ashcroft and the centre for Independent studies on whose board we find the likes of Ruth Richardson, Robert Champion de Crespigny AC who also sits on the board of Cosby and Textor and banking and mining ceo’s who are all hell bend on getting their hands on the NZ resources and assets.
But hey smartypants, keepem coming, the more you ridicule me the more smart people take me serious. This month my blog will probably attract some 10.000 hits and most of them kiwi’s. Not bad for an anonymous tulip who only started a short year ago.
Phil,
I do a lot of research but I don’t claim to be a specialist on financial crashes. I have never been in one other than the recent ones and we seemed to survive just fine but this is a different cattle of fish.
The wars, the finance world, the fact that the US has off shored most of it’s production jobs. A national debt of $ 9 trillion and the added debt of Fanny mae and Freddy mac.
And the fact that the US has to borrow from abroad at a rate of $2.43 billion a day to keep it all together. The moment China says Neh, I don’t think so
that’s it. US gone.
I don’t know how the GDP is build up but if profit of Big Corporations who make their profits by producing something in China and selling it in the US is part of it than that would not really reflect on the ability of American citizens to earn a living. The wages of American middle class have eroded and the only way they could keep up their lifestyle by working longer hours. just about everybody is mortgaged to the hilt and their Credit card debts are stupendous.
If the earnings of the financial sectors is included we are talking about the most dangerous bubble because the derivative trade is worthless because of the subprime asset backed junk bonds. That is what is deflating at the moment and that is very scary indeed.
Hi-ho, hi-ho, it’s out of work we go…
from http://english.aljazeera.net/business/2008/09/2008915183931742758.html
“I think the worrying thing is when this hits the real economy, when this hits people on the streets who are going to have less money in their pockets, who are going to be put out of work, who potentially are going to be put out of their homes.”
(Andrew Critchlow, managing editor for Dow Jones Middle East in Dubai)
“…you’re talking about $700 trillion worth of debt in the global economy. The entire GDP [Gross Domestic Product] of the world is something like $60 trillion, so this has a long way to go as you deflate all of this debt back to something more sustainable.”
(Max Keiser, prediction markets analyst in Paris)
“… I do think this was a revolution which has now run its course. It’s a revolution which is now eating its children and a very big change in mindset has to be under way.”
(James Galbraith, economist and professor at the University of Texas at Austin)
Bill,
Read the link. Yep, that’s the one.
Anybody care to comment on the NZ government throwing away it’s ‘principled’ stand on nuclear non-proliferation?
I commented on it this morning with the relevant links. But there’s been a deafening silence.
Is NZ enabling nuclear proliferation of no interest?
Well, maybe someone would like to comment on the Anti-Counterfeiting Trade Agreement (ACTA) which NZ is negotiating on. It’s being done in secret.
Potentially far reaching consequences for net users like yourself.
Or do undemocratic back room trade deals matter no more than nuclear proliferation?
Bill,
A friend of mine told me that a midwife friend of hers had told her of a horribly deformed dead born baby.
Something she has nightmares about it so was so horrible. The description remined me of the pistures of Depleted uranium deformed babies and I thought it was perhaps the stillborn baby of one of the NZ troops who had come back from Afghanistan. Just google depleted uranium babies or “Beyond treason” a film about US soldiers contaminated with the stuff. In Afghanistan alone they have used over 2000 tons of the stuff. which turns into a nano particled ceramic dust when it burns up. Low emitter Alpha particles take about 5 years to do terrible damage and the particles can travel through long tissue and lodge anywhere in the body.
Why keep up a nuclear non proliferation pact if you send your soldiers into one of the most depleted uranium contaminated countries and have them come back bringing it with them?
This is an interesting thread. Getting back to the beginning, the economy is about people, real people who get hurt when those playing financial games stuff up. Yet those who do the playing always seem to walk away unscathed. I agree with Cullen that we don’t want any gambling with our economy.
hi Janet,
Glad you like it and yes, I agree with you this is about real people.
travellerev,
Good work as usual. One upside I can think of is that we are likely to hear less from those ranters who gloated how “capitalism won” after the World Bank cynically bankrupted the Russian govt in 1990.
travellerev.
depleted uranium tipped armaments are a particularly effective way of dispensing with your nuclear waste…not just externalising costs but making a profit at the same time. That’s one thing. People? Health problems? What? Show us the money!
Allowing nuclear technology to be sold to India with no inspections of their military facilities… with India and Pakistan having already fought three(?) wars since ’47 and having threatened each other with nuclear weapons ie, contemplated their use ;and given that they are currently engaged in a low level war right now…
Given that the US is embroiled in the region and wants a counter balance to China (a nuclear India?) and Pakistan are now firing on US personnel entering Pakistani territory from Afghanistan.
Talk about throwing a box of matches into a petrol soaked room full of kids with pyromaniac tendencies?
All NZ had to do was say ‘no’. They had the veto.
Janet………seriously! wake up! Merrill Lynch is not in trouble because of JK. he left the company 8 years ago! they were doing great then!
Cullen however is just a history teacher who paid far to much for his train set!
That’s because the FED was printing lots of dollar bills not because ML were actually practicing sound financial management. When the FED stopped printing all that money the whole shebang fell down and they, and all the other banks and financial institutions, had the audacity to look surprised that the myth based schemes they were operating didn’t work.
You can’t make billions of dollars in profits when only millions of dollars in wealth are being created.
Rose and others
I know John Key left Merrill Lynch a few years ago. That is not the point. The point is that his life experience, fortune and personal ethos has been formed through being a player in the financial markets game – gambling and taking risks with big amounts of money that are not his own – and incidentally firing many people in the process who got in the way of his goals. It is the Merrill Lynch mindset that worries me when applied to a country with 4 million real people in it.
On the other hand, in my experience historians are very wise because they know where we have come from and so have insight into where we are going. And re the train set, it is a very sound investment if we look to NZ’s future needs, based on studying history.
One of the Gippers famous laugh lines was that the words ‘I’m from the government, I’m here to help’ are the most frightening in the English language.
It’s good rhetoric. Serves it’s purpose, gets a laugh, and makes the audience feel like Reagan is on your side agin the evil government that can only fuck things up, and is actively trying to keep you down. The GOP has been running that basic storyline ever since, to great electoral success.
Funny in it? All those GOP folk seem awful quiet about how the government is bailing out the private sector to the tune of hundreds of billions of dollars already, with plenty more to come. Don’t see the the Wall St bankers who laughed along with dear sainted Ron, running away in terror when it’s them with their arses in the fire and the government comes along to help. Nope. It’s all phew, and could you be so kind as to extend another line of credit please, and who could of known, and it’s no ones fault and my bonus is banked in the caymans.
The whole big myth underlying Reaganomics just collapsed around their ankles and not a peep of ‘sorry’ or ‘we wuz wrong’ from a one of them.
Wankers.
Rose
Dr Cullen has a PhD in Social and Economic History.
But “history teacher” sounds better, doesn’t it?
A bit like saying Mr Key once had an office job at Merrill Lynch.
Why thank you RedLogic,
For that compliment. Now if only I could convince people that I and thousands of others: scientists, architects,pilots ex military and fire fighters have applied the same amount if not more of rigorous work and research of the events of 911 and that it is really something everybody should look into.
Rose,
Let me give you some advise. If you want to comment it pays to read through some of the stuff already put in a thread. I may prevent you from placing dumb and uninformed comments.
Bill,
I had a conversation with a man called Doug Rokke not so long ago. He is one of my heroes and a full time DU activist. He became an activist when he came home from Iraq were he had served in the military as a health physicist for the U.S. Army Depleted Uranium Assessment team in Iraq and he and his team became ill after they were contaminated with DU. His team mates have all died and he is also slowly dying. He told me that now every bullet and every other projectile is made from DU and that the US gives it away. It is truly horrific. Iraq and Afghanistan are contaminated for the next 4.5 billion years and the found DU dust on the space station. In the weeks following up on the first wave of bombardments of Afghanistan and Iraq the readings spiked in as far away as London. For those of you who want to know more about the effects of DU watch this film Beyond treason and realise that little over a thousand New Zealanders to date have served in that toxic environment in Afghanistan.
Felix,
Wasn’t the PhD honorary?
I have no idea Phil. Perhaps he got it in a weetbix box. Those Social and Economic History Doctorates are just handed out willy-nilly aren’t they? I find a few every time I clean behind the couch…
But really, I have no idea. From his Wikipedia entry:
“…attended secondary school at Christ’s College in Christchurch, and achieved an MA in History at Canterbury University. Receiving the Commonwealth Scholarship he then gained a Ph.D. in Social and Economic History from the University of Edinburgh. From 1971 to 1981 he was a lecturer at Otago University, with a term as a Visiting Fellow at the Australian National University from 1975 to 1976.”
So yeah, he was a history teacher. And Key was a desk jockey.
Janet.
If you are worried about gambling of other peoples money then maybe you should go and ask everybody’s favorite historian “what happened to our super fund??”
Let me give you some advise. If you want to comment it pays to read through some of the stuff already put in a thread. I may prevent you from placing dumb and uninformed comments.
This made my day just a little bit brighter
I don’t claim to know much about the world of finance, but in 1999, the new glamour boys and girls on the block were equity and credit derivatives traders and the new play field was the internet.
Where did Key get positioned after FX trading .. London, trading in European bonds and derivatives, and setting up the e-commerce division there, until 2001. Eventually leaving Merrill Lynch the same year, after a short stint in Sydney where he was to set up the e-commerce division for the Asia Pacific (Pacific Rim).
In this quote from 1999, when he was the managing director of debt markets at ML, he said,
“The initial thought was that, yes, the Internet’s great for foreign exchange because it’s vanilla. But there are applications that are just as wide in many other areas: corporate bond trading, government credit, equity underwriting, credit derivatives-it’s endless.”
You know, the same type of unregulated finance and investment products offered, like sub-prime.
Key may not have worked at Merrill Lynch for eight years, but he has always supported the power of e-commerce in offering products like this. The article also notes Key as saying “that banks can either boost their volume and expect to make a smaller margin or else lie down and accept that they will make less money”.
“We want to embrace the change that is happening,”
Glass-Steagall Act anyone?
“E-commerce will provide an awful lot of flow on benefits from an efficiency point of view and allow us a much greater global reach than we have today. So we see this as a great opportunity to increase our distribution.”
Merrill, whose trades range from $500,000 to $5 billion, recently announced a new on-line portal for equity and investment products, and the bank plans to roll out continuous enhancements to the portal over the next two years.”
In the same article,
“But perhaps of principal concern is speed. As a comparison, FX differs from stocks in that when buying a share, an order is placed and confirmation is obtained when the deal is executed. With FX, however, customers want to see prices prior to the deal so they need an immediate response to their inquiry. The Internet has yet to show that it can of fer this immediate information. Graham Moat, a foreign exchange dealer with HSBC, a bank with 100 corporate clients for on-line FX trading, adds:”We would want to get a price back to customers in less than two seconds, and I’m not sure the Internet can do that.”
Really?
Phil perhaps you should do the same.
Ms M,
Very interesting. Do you have a link to said interview?
According to my information John Key was global head of Forex for Merrill Lynch from 1999 until march 2001 and as such advisor to the federal reserve of New York and the biggest player in the current crisis Alan Greenspan. He was part part of the the a href=’http://www.newyorkfed.org/fxc/members/members_past.html’>Foreign Exchange committee with only three others one for Citigroup, Lehman and UBS Warburg. The 4 banks most hit by the subprime crisis.
A link to your interview would help me greatly with part three of my response to the NZ Herald propaganda piece. You might want to read my first response here.
In the NZH John Key claims he was involved in new products for emerging markets like Russia, Brazil, Argentina etc. This links him to the Asian crisis and the collapse of Russia.
See Phil,
Getting educated is what it’s all about, and of course the perception that no one in power can be trusted ever.
Oops,
Sorry for wrong link. Here it is again Foreign Exchange committee
Treasurers log on to on-line FX
Global Finance, Nov 1999 by Joelson, Daniel
BNet
http://findarticles.com/p/articles/mi_qa3715/is_/ai_n8869409
Treasurers log on to on-line FX
BNet, Global Finance, Nov 1999 by Joelson, Daniel
Thanks Ms M,
I’ll have a read.
Friggin hell Ms M,
How the hell did you find this?
John Key: Managing director of debt market of Merrill Lynch in 1999.
You nailed it girl. John Key caught with his fingers in the worlds financial till.
HIGH FIVE.
All of youse read the link of Ms M. Awesome, we are so going to nail this guy.
Captcha: Men LOVER. So much nicer than “get fucked” vto and T-rex
To quote the immortal words of D4J……
“Talking a bloody cold day and war. I spotted a red electioneer Mannequin in town. It continually screeched National and USA very bad in a deep voice, then in an angelic voice frothed comrade Putin and Labour very good.
Did it breach the EFA?
I couldn?t find a rock big enough to shut it up.”