web analytics
The Standard

The beggared neighbour

Written By: - Date published: 9:37 am, December 20th, 2012 - 12 comments
Categories: exports, jobs - Tags:

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.

12 comments on “The beggared neighbour”

  1. AsleepWhileWalking 1

    Japan is substanitally worse off and we can expect a currency collapse sometime soon.

    It has nothing to do with employment rate, but rather government bonds that were issued.

    • Galeandra 1.1

      ‘substanitally worse off ‘

      Care to explain with citation/s?

    • aerobubble 1.2

      The argument I believe is this, that much future wealth was speculated to exist based on continuing cheapening supplies of energy. Over the period of cheap energy inflation was hidden, pollution, erosion of support systems, financial, ecological, social, could be managed as an opportunity for activity. But since capitalism as we have it today focuses on short terms, locking in rent seeking activity, so they essentially target the symptoms rather than the causes (the government role).
      In this context, US, Japan are just regions of one global nation, akin to Greece to the Eu, we are all awash in the same bath tub, with the same dirty water, so it more plausible to assume we should be
      do QE, and ask why we aren’t and what rewards there are for not doing so. I would argue that
      selling assets when money is devalued is pathetically stupid, why sell when we can print. Also holding ones breath for decades with tight policy, when suddenly the cycle turns and we can loosen money into our economy why aren’t we, why can’t we have a quite deep breath for all our hard work, aren’t we due a relaxation of rabid neo-liberal inflation targeting? What better time to do it. So we come to the reason why not, well higher inflation would actively help debtors write down debt, it would harm savers, it would boost incomes for exporters and harm voter buying power, and could cause a massive round of bankruptcies and foreclosures on middle stupid NZ that needs two cars and lavish indebtedness and servitude to their betters.

  2. vto 2

    So what is John Key going to do about this? Does anybody know?

    because there aint no doubt that it is going to happen ….

    • David Viperious H 2.1

      Nothing he’ll be in his house in Hawaii. He’s not going to do anything, so maybe he is going to turn our country into another Greece, so that the bastards can ‘bail us out by stealing the 20 billion in the Kiwi Saver and then Austerity as the like has never been seen. Then we would need a strong government to tell em to get stuffed like Argentina did. And that we A’int got.

  3. PlanetOrphan 3

    Well said Eddie, we need “Good Inflation” in NZ, and yes there is a lot of hype out there about good and bad inflation.

    The Gnats’ believe in “Good Deflation”, but they are profiteers and will never care about the average Kiwi getting a livable wage/salary.

    The Gnats’ wont be happy until they are the only one who can hand out charity, and it’ll only be given to people they “Like”.

  4. Richard 4

    Please, tell me more about your expertise with regards monetary policy above the zero lower-bound. I am sure you are well qualified to discuss this technical issue.

    Oh, and by the way, the Japanese economy contracted by 0.9% in the third quarter.

    • Shane Gallagher 4.1

      How about Switzerland? It is printing money explicitly to keep its franc devalued. So tell me about that… :-)

    • bad12 4.2

      Your a funny wee chap aint you, seriously do you ever actually THINK, because from what i have read if it was not for the work that has been carried out in Christchurch associated with earthquake recovery the New Zealand economy in the last year is shown to have shrunk by at least 2%,

      Even then we have to question the ludicrous way in which the Bean Counters measure our economic activity when they class earthquake recovery as GDP, surely just one more fucking big lie in a whole series of fucking big lies that have as an end result a succession of Governments mis-managing the economy by institutional design and that’s befor the village idiot from down Dipton way has been let loose to play ‘betcha i can create as much unemployment as i did last time’ with the economy,

      Think about it logically for just a second, how can anything in the field of demolition/construction that is occurring in Christchurch at the moment be considered as ‘growth’ and be included as a positive in GDP figures???,

      That supposed growth occurred in Christchurch over the years as the City was built up prior to the Canterbury earthquakes and in those years was recorded as that growth, rebuilding post-earthquakes is simply re-building of the prior ‘growth’ and as such should not be included in GDP figures unless the loss of the prior growth was also recorded as a shrinkage in GDP at the time of the earthquakes, (to my knowledge this has not occurred),

      So for the next 2 years Slippery and that idiot from Dipton will off of the back of rapidly expanding rebuilding in Christchurch record NZ wide GDP growth of 2% annually when in fact without such bullshit replacement of prior GDP lost to the earthquakes the true picture is going to be an overall shrinkage of GDP annually of 2% annually for those 2 years if we put to one side the activity surrounding earthquake recovery…

  5. bad12 5

    The only advantage we gain across the whole economy from having a dollar over-valued by 15-20 cents is that petrol-products in theory become cheaper,

    BUT,

    Wouldn’t you know it Slippery, the Prime Minister, announced yesterday that His Government would seize that advantage for the Governments coffers by rack renting the taxes on those products over the next 2-3 years…

  6. geoff 6

    I think that maybe this article is completely misinformed.

    Japan’s debt to GDP ratio is one of the highest in the world (second only to Zimbabwe, according to wikipedia) and many commentators have said that its currency is about to collapse. From what I understand, it is not in a strong economic position.

Recent Comments

Recent Posts

  • Broadband failure sucks up more cash
    The Commerce Committee has blocked an inquiry into the $300 million rural broadband initiative (RBI) despite mounting evidence it’s a massive policy failure and waste of money, says Labour’s ICT spokesperson Clare Curran. “The Government is about to spend an… ...
    6 hours ago
  • TISA – Another secret trade deal you may never have heard of
      This post first appeared on The Daily Blog You’ve probably heard of the Trans-Pacific Partnership Agreement (TPPA) by now and the widespread concerns around it but what about the Trade in Services Agreement (TISA) also being currently negotiated by… ...
    GreensBy Gareth Hughes MP
    11 hours ago
  • Health chickens coming home to roost as Dunedin loses right to train doctor...
    News today that Dunedin Hospital has lost orthopaedic training accreditation is a major blow and proves the Government’s prevarication is having devastating consequences, Labour’s Health spokesperson Annette King says. “Losing orthopaedic advanced training is serious. There is a knock on… ...
    1 day ago
  • $74,000 quarterly rise shows crisis out of control
    New figures out today showing Auckland house prices have spiked by a massive $74,000 in the past quarter is further evidence the city’s housing crisis has spiralled out of control, Labour’s “In spite of constant announcements and photo opportunities from… ...
    1 day ago
  • Democracy for Nauru now
    Murray McCully must send the strongest possible message to the Nauruan Government that New Zealand does not condone its actions given the disturbing developments there, Labour’s Foreign Affairs spokesperson David Shearer says. “Right now we are seeing Nauru stripped of… ...
    1 day ago
  • Recovery needs more than a rebrand
    Today’s announcement of new governance arrangements for Canterbury seems to be nothing more than a fresh coat of paint on the same old approach, says Labour’s Canterbury Earthquake Recovery spokesperson Ruth Dyson. “The Canterbury Recovery has been too slow, with… ...
    1 day ago
  • Copper decision a victory for status quo, not Kiwi households
    New Zealanders hoping for cheaper copper broadband will be disappointed by the Commerce Commission’s latest decision in the long running saga to determine the price of copper, Labour’s ICT spokesperson Clare Curran says. “In an apparent attempt to appease everyone,… ...
    1 day ago
  • It’s time for hard decisions in the Bay
     The Ruataniwha dam project is turning into a huge white elephant as the economics fail to stack up, says Labour’s Water spokesperson Meka Whaitiri.  “Ruataniwha simply doesn’t make economic sense when you look at other major irrigation schemes around the… ...
    1 day ago
  • More testing won’t lift student achievement
    Hekia Parata’s latest plan to subject school students to even more testing and assessment won’t do anything to lift the educational achievement of the kids who are struggling, Labour’s Education spokesperson Chris Hipkins says. “New Zealand school students are already… ...
    2 days ago
  • Bad week for NZ economy gets worse
    The bad news for the New Zealand economy got worse this morning with the 8th successive drop in dairy prices at this morning’s global dairy auction, again exposing the absence of any Plan B from the National Government, Labour’s Finance… ...
    2 days ago
  • System failing to protect women and children from family violence
    Last week we called for mandatory child safety investigations in domestic violence cases. This came after the coronial inquiry into the deaths of Bradley and Ellen Livingstone and the verdict in the trial of the west Auckland boys charged with… ...
    GreensBy Jan Logie MP
    2 days ago
  • Backers banking on social bonds cash?
    The Government is refusing to say what the $29 million it has set aside for its controversial social bonds programme is for, raising suspicions it is an upfront payment to the project backers, Labour’s Health spokesperson Annette King says. A… ...
    2 days ago
  • Plastic Free July
    Today is the start of Plastic Free July. Since its inception in Perth, Western Australia four years ago, more and more people and organisations from around the world have joined the call to refuse single use plastic products. Nearly all… ...
    GreensBy Denise Roche MP
    2 days ago
  • State house sell off Bill gives extraordinary powers
    The Government is about to give Ministers extraordinary powers to take direct personal control of selling state houses, exempting Ministers from normal legal requirements and leaving the sale process wide open for corruption, Labour's Housing spokesperson Phil Twyford says. The… ...
    2 days ago
  • Cash for charter schools, mould for state schools
    At a time when state schools are struggling in old, cold, mouldy buildings and can barely make ends meet, the National Government is shovelling cash at charter schools which aren’t even spending the funding on kids’ education, Labour’s Education spokesperson… ...
    2 days ago
  • New Zealand needs a wise response to climate change
    Today in Parliament I got to hear from a group of New Zealanders who are concerned for the future of our country. Called Wise Response, the group is a broad coalition of academics, engineers, lawyers, artists, sportspeople and others who… ...
    GreensBy Russel Norman MP
    2 days ago
  • No alternative as waste scheme trashed
    Nick Smith must explain how he is going to prevent contamination of New Zealand’s ground and water with liquid and hazardous waste after scrapping the only monitoring scheme and offering no replacement, says Labour’s Environment Spokesperson Megan Woods. “From today,… ...
    2 days ago
  • Flawed system rates death traps as safe
    ACC Minister Nikki Kaye needs to come clean about what really lies behind the reclassification of 18 vehicles in her new motor vehicle registration system introduced today, Labour’s ACC spokesperson Sue Moroney says. "New Zealanders deserve the truth about the… ...
    2 days ago
  • Tiwai Smelter and 800 workers left in limbo
     Workers at Tiwai smelter and the people of Southland have once again been left in limbo over their future in the ongoing debacle over whether the plant stays open, says Labour’s Leader Andrew Little.  “It’s not good enough that after two years of… ...
    3 days ago
  • New twist in state house sell-off saga
    The Government has opened the door to buyers of state houses simply being landlords and not required to provide social services, Labour’s Housing spokesperson Phil Twyford says. The Prime Minister said at his post-Cabinet press conference buyers would not “have… ...
    3 days ago
  • Government fees will hit charities hard
    National’s decision to ignore the concerns of charities will see the voluntary sector face hundreds of thousands of dollars in new costs if the Policing (Cost Recovery) Amendment Bill passes, says Labour's Community and Voluntary Sector spokesperson Poto Williams. “National’s… ...
    3 days ago
  • Four out of ten for Simon’s Bridges
    The Transport Authority’s decision to fund only four of the 10 bridges promised in National’s shameless Northland by-election bribe is a huge embarrassment for Transport Minister Simon Bridges, Labour’s Transport spokesperson Phil Twyford says. “After one by-election poll showed they… ...
    3 days ago
  • Falling consents adding to Auckland housing woes
    Falling numbers of building consents being issued in Auckland will add to the city’s housing shortfall and fuel skyrocketing house prices, Labour’s Housing spokesperson Phil Twyford “The Productivity Commission found there was a shortfall of around 32,000 houses by the… ...
    3 days ago
  • So Mr English, do you have a plan?
    DIpping confidence about jobs, wages and shrinking exports are highlighting the lack of a plan from the government to diversify the economy and build sustainable growth, Grant Robertson  Labour’s Finance Spokesperson said. " Data released over the last week… ...
    3 days ago
  • Serious risks to tenants and assets in sell-off
    Overseas evidence shows there are serious risks around the Government's plan to sell off state houses to social housing providers, Opposition Leader Andrew Little says. “In the Netherlands – where community housing providers supply the majority of social housing –… ...
    4 days ago
  • Land of milk and money
    Kiwi families are paying over the top prices for their milk and someone is creaming off big profits, says Labour’s Consumer Affairs spokesperson David Shearer. “In 2011 the Government told us high New Zealand milk prices were a natural result… ...
    5 days ago
  • MoBIE largesse doesn’t stop with TVs and hair-straighteners
    The number of MoBIE staff earning more than $150,000 has risen 23 per cent in just a year, Labour’s Economic Development Spokesperson David Clark says. Documents obtained from the Ministry of Business, Innovation and Employment show there are now nearly… ...
    5 days ago
  • English wants to flog state houses to Aussies
    Bill English’s admission that he would sell hundreds of New Zealand’s state houses to the Australians is the latest lurch in the Government’s stumbling, half-baked housing policy, Labour’s housing spokesperson Phil Twyford says. “Bill English should face reality and admit his… ...
    6 days ago
  • Exports continue to fall as Government fails to diversify
    The Government quickly needs a plan to diversify our economy after new figures show that exports are continuing to fall due to the collapse in dairy exports, Labour's Finance Spokesperson Grant Robertson says. “Dairy exports fell 28 per cent compared… ...
    1 week ago
  • Government inaction leads to blurring of roles
    The Treasury wouldn’t have had to warn the Reserve Bank to stick to its core functions if the Government had taken prompt and substantial measures to rein in skyrocketing Auckland house prices, Labour’s Finance spokesperson Grant Robertson says. “The problems… ...
    1 week ago
  • Courthouse closures hitting regions
    The Government’s decision to shut down up to eight regional courthouses, some supposedly only temporarily for seismic reasons, looks unlikely to be reversed, Labour’s Justice spokesperson Jacinda Ardern says.“The move has hit these regions hard, but appears to be a… ...
    1 week ago
  • A Victory for Te Tiriti o Waitangi
    This week my partner, who has a number of professions, was doing an archaeological assessment for a District Council. He showed me the new rules around archaeologists which require them to demonstrate “sufficient skill and competency in relation to Māori… ...
    GreensBy Catherine Delahunty MP
    1 week ago
  • Tough bar set for Ruataniwha dam
     Today’s final decision by the Tukituki Catchment Board of Inquiry is good news for the river and the environment, says Labour’s Water spokesperson Meka Whaitiri. “Setting a strict level of dissolved nitrogen in the catchment’s waters will ensure that the… ...
    1 week ago
  • Minister for Women and National missing the mark – part two
    The Minister for Women was in front of the select committee yesterday answering questions about her plans for women. Some useful context is that we used to have a Pay and Employment Equity Unit within the then Department of Labour… ...
    GreensBy Jan Logie MP
    1 week ago
  • Lavish penthouse spend confirms culture of extravagance
    At the same time thousands of New Zealanders are being locked out of the property market, the Government is spending up on a lavish New York penthouse for its diplomats, Labour’s Foreign Affairs spokesperson David Shearer says. News that taxpayers… ...
    1 week ago
  • Māori Television exodus cause for concern
    The shock departure of yet another leading journalist from the Native Affairs team raises further concern the Board and Chief Executive are dissatisfied with the team’s editorial content, says Labour’s Māori Development spokesperson Nanaia Mahuta. “Annabelle Lee is an experienced… ...
    1 week ago
  • Million-plus car owners to pay too much ACC
    More than a million car owners will pay higher ACC motor vehicle registration than necessary from July, Labour’s ACC spokesperson Sue Moroney says. “During a select committee hearing this morning it was revealed that car owners would have been charged… ...
    1 week ago
  • Bill will restore democracy to local councils
    A new Labour Member’s Bill will restore democracy to local authorities and stop amalgamations being forced on councils. Napier MP Stuart Nash’s Local Government Act 2002 (Greater Local Democracy) Bill will be debated by Parliament after being pulled from the… ...
    1 week ago
  • Minister for Women again misses the mark – part one
    Yesterday I asked the Minister for Women about the government’s poor performance on it’s own target of appointing women to 45% of state board positions. I challenged why she’d put out a media release celebrating progress this year when the… ...
    GreensBy Jan Logie MP
    1 week ago
  • Banks enter Dragon’s Den in pitch for Government’s mental health experi...
    Overseas banks and their preferred providers were asked to pitch their ideas for bankrolling the Government’s social bonds scheme to a Dragon’s Den-style panel, Labour’s Health spokesperson Annette King says. Dragon’s Den was a reality television series where prospective ‘entrepreneurs’… ...
    1 week ago
  • Global Mode bullying won’t stop people accessing content
    It’s disappointing that strong-arm tactics from powerful media companies have meant Global Mode will not get its day in court. Today a settlement was reached terminating the Global Mode service, developed in New Zealand by ByPass Network Services and used… ...
    GreensBy Gareth Hughes MP
    1 week ago
  • More questions – why was the Former National Party President involved wit...
    Today in Parliament Murray  McCully said the reason Michelle Boag was involved in 2011 in the Saudi farm scandal was in her capacity as a member of the New Zealand Middle East Business Council. The problem with that answer is… ...
    1 week ago
  • Minister must explain Maori TV interference
    Te Ururoa Flavell must explain why he told Maori TV staff all complaints about the CEO must come to him – months before he became the Minister responsible for the broadcaster, Labour’s Broadcasting Spokesperson Clare Curran says. “Sources have told… ...
    1 week ago
  • KiwiSaver takes a hammering after the end of kick-start
    National seems hell bent on destroying New Zealand’s saving culture given today’s news that there has been a drop in new enrolments for KiwiSaver, says Labour’s Finance spokesperson Grant Robertson.  “New enrolments for the ANZ Investments KiwiSaver scheme have plunged… ...
    1 week ago
  • Straight answers needed on CYF role
    The Government needs to explain the role that Child, Youth and Family plays in cases where there is evidence that family violence was flagged as a concern, Labour’s Children’s spokesperson Jacinda Arden says. “The fact that CYF is refusing to… ...
    1 week ago
  • Prime Minister confuses his political interests with NZ’s interest
    The Prime Minister’s statement in Parliament yesterday that a Minister who paid a facilitation payment to unlock a free trade agreement would retain his confidence is an abhorrent development in the Saudi sheep scandal, Opposition leader Andrew Little says.  ...
    1 week ago
  • #raisethequota
    Last Saturday was World Refugee Day. I was privileged to spend most of my day with the amazing refugee communities in Auckland. Their stories have been inspiring and reflect the ‘can-do’ Kiwi spirit, even though they come from all different… ...
    GreensBy Denise Roche MP
    1 week ago
  • Dairy conversions causing more pollution than ever, report shows
    The Parliamentary Commissioner for the Environment (PCE) released two reports on freshwater quality and management last Friday. The water quality report shows that dairy conversions are hurting water quality and says that despite great efforts with fencing and planting, large… ...
    GreensBy Catherine Delahunty MP
    1 week ago
  • Employers want urgent action on health and safety
    Moves by National to water down health and safety reforms have been slammed by employers – the very group the Government claims is pushing for change, says Labour’s spokesperson for Labour Relations Iain Lees-Galloway. “The Employers and Manufacturers’ Association has… ...
    1 week ago
  • Labour calls on all parties to end coat-tailing
    Labour MP Iain Lees-Galloway is encouraging all parties to support his Bill to end the coat-tailing provision when it is debated in Parliament this week.  “New Zealanders have sent MPs a clear message. An opinion poll found more than 70… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere