Written By: - Date published: 9:37 am, December 20th, 2012 - 12 comments
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Japan just elected a Liberal Democrat government promising more jobs through a huge quantitative easing programme. The US has stated it’ll continue QE until unemployment drops below 6.5%. The effect has been to send our dollar to new highs, killing exporters and import-exposed local businesses. Contrary to media belief, Japan and the US aren’t in worse positions than us.
Japan has a lower and falling unemployment rate and a higher growth rate. The US’s unemployment rate is systemically higher than New Zealand’s, but it too is falling sharply and may soon fall below ours. But they’re using QE any way because it is helping them to devalue their currencies against their competitors – aiding both their exporters and their local businesses.
Meanwhile, our government does nothing and the dollar surges. Sure, that means cheaper consumer imports. But at what cost? 40,000 jobs lost in manufacturing, 7,000 lost in tourism, a claiming current account deficit as exports fall and imports rise. What does it matter if flat-screen TVs are cheap for the 300,000 jobless and 100,000 underemployed Kiwis?
We are heading for a Greece-like situation where we have massive foreign debts, all our shit is foreign-owned, and we don’t have the productive capacity left in the country to get back to an even keel.
Yet, the tools of orthodoxy in the mainstream media stomp on any suggestion of change. They’ve been drinking the neoliberal kool-aid so long that they think it’s all there is.