Can we afford poverty?

Written By: - Date published: 11:30 am, November 2nd, 2010 - 212 comments
Categories: class war, Economy, poverty - Tags:

We know that poverty is the root of a good deal of society’s problems from crime, to poor educational outcomes, to poor health. Just the direct economic costs of these problems are in the billions per year, and we can’t forget the loss of human potential and happiness. The good news: we can easily afford to eliminate poverty.

New Zealand doesn’t have an official poverty measure but the usual measure internationally is that households with incomes below 60% of the median are in poverty. I used the Household Economic Survey to estimate the poverty line for different household sizes.

I came up with nearly 400,000 households comprising nearly 1 million people living in poverty – 22%. That’s probably a bit on the high side looking at other countries’ rates but close enough. Things like Working For Families don’t show up in the data and will reduce poverty quite a bit. I also had make some estimates that are on the generous side.

I then used the same data to calculate how much extra income these households would need to get their incomes up above 60% of the median income: $5 billion.

$5 billion a year as a high estimate to eliminate poverty from our society.

Too expensive? No, it’s not. The richest 1% of New Zealanders have a combined income of $11 billion. $5 billion is less than 3% of GDP. By re-distributing 3% of our national income to the poorest Kiwis, we can lift 22% of the population out of poverty. And, like I say, $5 billion is a high-side estimate.

We have the money to eliminate the blight of poverty, which has no place in a civilised society.

We have the mechanisms: a universal minimum income, a fair minimum wage, a full employment policy with government as employer of last resort.

But do we have the courage and intelligence to rid ourselves of poverty? Or will the elite continue to turn a blind eye to the masses of poor and the fact that they, the elite, too suffer when so many don’t have the means to a decent standard of living?

212 comments on “Can we afford poverty?”

  1. Jeremy Harris 1

    There is a number of problems with what you say:

    1). We already spend $18,000,000,000 on the MSD, so now another $5,000,000,000 will solve the problem or will we find that spending that extra money which subsidises dependence will create further dependence, waste and inefficiency..? Forgive for not being convinced of your calculations

    2). WFF is a sad state of affairs because if we really want to help the lowest socio economic groups we should simply take the few billion we are spending on WFF, eliminate the programme (and save on the churn) and give it equitably to all NZers (but favouring the poor) in the form of a tax free threshold

    3). If we have a minimum universal income (which I agree with) set at say $450 per person over 18 per week, why do we need a minimum wage..? We don’t, all a minimum wage does is descriminate against the lowest skilled in our society, often disadvantaged minorities groups, if we eliminated the minimum wage (but encouraged people to negotiate as high a wage as possible by giving a bonus the closer their wage got to the minimum universal wage), we help the lowest skilled in our society, protect them via a minimum universal wage and have large productivity increases creating a bigger economic pie for all

    4). Full employment via government was a disaster pre 1984, it created a artifically high wage which sent the country towards bankrupcy and the imbalances it caused meant massive pain when we had to return to some semebalance of reality in the 80s and 90s, it was displayed quite clearly when the SOEs were corporatised and productivity soared, the low producivity growth pre 1984 of about 1% p.a. meant all we were doing was sharing a smaller economic pie more equally rather than a much larger economic pie more unequally but a much larger pie it was, with productivity growth of close to 5% in some years in the 90s… If we really want to create full employment without government as a last resort we need to eliminate the reserve bank in it’s current form and government intervention in the economy and the taxes that intervention creates

    I’m sure this is going to be a popular post…

    • Bright Red 1.1

      half of the welfare spend you mention goes on superannuation. Super is set above the poverty line and, thanks to it, elderly poverty is just 3%.

      So, the money we spend on welfare does do a great job in preventing poverty. Just not enough to eliminate it.

      • Jeremy Harris 1.1.1

        And also the fact that the elderly have had a lifetime to build up assets, we spend 6 dollars on the elderly for everyone we spend on under 5s, doesn’t make sense… Super is also massively unaffordable going forward when the Aussie Super position is considered…

        • Bunji 1.1.1.1

          That’s great if you earned enough to build up assets, but if you were at minimum wage, struggling to get by each week, or you’ve met some financial disaster at age 59, or made redundant at 55 and no-one wanted to offer you a job because you were “too old”, and used up all your savings getting to retirement… well you might need a safety net.

        • Vicky32 1.1.1.2

          Don’t make assumptions, you end up looking like a prat… There are elderly people who are completely without assets (in 10 years I will be one of them, as my mother was, when she was left an elderly widow with teenage children..)
          I object strongly to “going forward”, it’s simply jargon = gurble…

    • Bored 1.2

      Full employment via the government was a disaster…for whom? Unemployment was a big disaster for a lot of people who actually suffered the pain of the transformed economy. I did not see a lot of pain being shared amongst the “haves” at the time.

      Without even beginning to deconstruct the idiot stance that gave us the neo lib economy and the resultant stripping of public wealth for private profit, and now the financial crisis, I suggest your argument stinks of crass I’m alright Jack selective vision, and pig ignorance of recent history. I saw the damage done to people by the kind of policies you suggest up close and personal, did you?

      • Jeremy Harris 1.2.1

        The government attempt to keep everyone artifically employed, in part, created the imbalances in our economy that caused all the pain when it inevitably failed… Since when have the “haves” ever suffered in the transformation of an economy except from monarchies to Communism, do you advocate a similar outcome for the ‘haves’ as the Romanovs..? “Haves” tend not to suffer in any economic climate because they “have”…

        I’m not a neo-lib, I dislike neo-lib almost as much as Socialism… I was a kid in the 80s, my parents lost their home due to interest rates, they still managed to keep me and my brother at private school… I saw my mother crying as we sold the grand old villa my brother was born in, that she loved and I oppose any return to pre 1984 NZ because I don’t want another generation of Kiwi mums to have to go through the inevitable pain when you run out of other people’s money…

        • Draco T Bastard 1.2.1.1

          Nobody wants to go back to pre 1984 but we do need to look to better ways. Command economies don’t work and neither does the “free-market”. The only economy that will work is a democratic economy but that requires the removal of a hell of a lot of “property rights” and the recognition that everybody needs to have a say in the disposition of the nations resources and not just the few. Which means a better way of informing people and getting them to have their say.

          I was a kid in the 80s, my parents lost their home due to interest rates,

          Which were set by the “free-market”.

          • Colonial Viper 1.2.1.1.1

            Which were set by the “free-market”.

            Touché.

            I think that Jeremy has actually learnt a bunch of incorrect lessons from his life experience.

            I don’t want another generation of Kiwi mums to have to go through the inevitable pain when you run out of other people’s money…

            So you aren’t giving those same mums pain by cutting the DPB, restricting access to affordable tertiary education, and forcing them to look for work which doesn’t exist in an employment market which is currently 200,000 jobs short?

            Seriously what are you on about.

          • Jeremy Harris 1.2.1.1.2

            They were set by the reserve bank actually, about the only thing you and I seem to agree with is central banks are a problem…

        • Colonial Viper 1.2.1.2

          The government attempt to keep everyone artifically employed, in part, created the imbalances in our economy that caused all the pain when it inevitably failed…

          Nope. The search for marginally higher private sector yields no matter what increases in risk, debt or toxic over leveraging resulted created the imbalances in our economy.

          Don;t blame Govt for the failures of the market place, and for the failures of capitalist actors within that market place.

          New Zealand has not had a Government policy of “keeping everyone employed” for at least 26 years.

          The current global economic disaster has resulted from the neocon Chicago School philosophy that you have been embracing.

          • Jeremy Harris 1.2.1.2.1

            I hope one day CV you’ll realise that your good intentions are likely to hurt the very people you care so much about, the minimum wage is one (of many) good examples…

            If I had a dollar for every time capitalism has been blamed for a government intervention I’d be a fat michigan filmmaker with a baseball cap…

            The Austrian/Chicago school hasn’t had a look in, the foundamental principles of which are:

            Sound money
            Success/Failure principle

            Central banks and bailouts are the antithesis of the free market, I don’t know how many times I can point this out to you, but you plug your ears, start humming “socialism is great” and we go around in circles…

            • Draco T Bastard 1.2.1.2.1.1

              Today’s bailouts are a direct result of Chicago School economics. All financial collapses are a direct result of capitalism as it forces an over accumulation of capital into fewer and fewer hands.

              They were set by the reserve bank actually,

              Pretty sure we didn’t have an OCR in 1984 as it was created by the Reserve Bank Act of 1989. Back then it was the banks that set the interest rates. Now, we did have a more closed economy with a pegged exchange rate (left over from the Bretton Woods Agreement) which Muldoon had tried to keep high which may have had some effect.

              • Jeremy Harris

                It was about ’90 or ’91, they had to sell the house, they live on the next street over now…

                • Draco T Bastard

                  Oh, right, so you’re actually complaining about the “free-market” reforms that you’re so inspired by…

                  BTW, 1991 was the year that National drove a lot of people out of work, massively increased poverty and Don Brash, a leading light of the principals that you espouse, was governor of the RBNZ.

                  • Jeremy Harris

                    DTB, if you’re going to keep on trying to engage with me please take reading comphrension classes… Read one of the numerous earlier post where I state, quite clearly, in plain English, that the reforms that caused the hardship my family and many others went through was necessary due to the socialistic policies followed by NZ before 1984…

                    Aren’t you late for your plane to Pyongyang to see how well you’re Juche policy is working out..?

                    • KJT

                      They were not reforms. They were a load of self seeking bullocks inflicted on us by followers of an economic religion.
                      Muldoon winding back socialism to suit his supporters was the start of the problems.

                      All that has happened since has proven they were wrong. Some people just cannot see what is in front of them.

                      North Korea is about as socialist as the USA. Both are failed countries.

                    • Descendant Of Smith

                      Those reforms happened because the wealthy sold off their shares and investments and property to mum and dad investors, they set up companies on the back of napkins that was as worthless as hell and let ordinary people take the fall in 1987.

                      They then stripped the country bare taking all those hard earned government assets and started blaming people because they had lost their jobs and lost their incomes and lost their houses and lost their relationships.

                      Efficiency became the mantra that led to low wages for all apart from the few. Corporate business became the priority over small business and today the small business figures only look goodish because so many workers became self employed contractors instead of employees through no wish of their own.

                      Having got a taste for having lots of money but not actually producing anything decided to take more and more and they continue to do so to this day.

                      If we keep going this way we will back back to families sending children out to work – that’s if the drugs and depression and illness and imprisonment don’t get us first.

                      There has to be some pruning back of profit versus wages to the ordinary man.I’d be happy to see even a 50% split as opposed to the 60% profit split today.

                      When is enough money enough – when is supporting your family on a decent wage OK without needing to be a fucked up millionaire who moans at paying his 200 speeding fine that I came across today. Nah only the poor should pay eh!

                      When do we want to live in a community that doesn’t have to worry about walking the street at night, when women receive the same rates of pay as the alpha males who can’t help them selves but be top dog.

                    • Draco T Bastard

                      if you’re going to keep on trying to engage with me please take reading comphrension classes…

                      Or you could take writing classes. This bit

                      I was a kid in the 80s, my parents lost their home due to interest rates, they still managed to keep me and my brother at private school… I saw my mother crying as we sold the grand old villa my brother was born in, that she loved and I oppose any return to pre 1984 NZ

                      Put the timeline we were talking about in the early 1980s, i.e, it indicated that you were talking about the interest rates in the early 1980s which were quite high but then you said that your parents lost the house in 1991. Now, Muldoons mismanagement (a response to a Crisis of Capitalism) had certainly left the country worse off which probably meant that we did need to do some reforms but Ultra Capitalism wasn’t them as shown by the fact that your parents lost their friggen house along with probably a few hundred, if not thousands, of others.

                      Muldoons was trying to boost profits which were stagnating from the late 1960s through to the 1980s. The 4th Labour Government went with the neo-liberal reforms for the same reason. Now, they managed to restore profits but in doing so they took a hell of a lot off of the poor and middle classes. Socialist reform, on the other hand, would probably have allowed your parents, and others, to keep the house. Profit would still have been down but that would have been minor compared to the increased poverty that the neo-liberal reforms did bring about and which directly affected your family.

            • Colonial Viper 1.2.1.2.1.2

              Central banks and bailouts are the antithesis of the free market

              Its usually at this part in the song that I start pointing out to you that there has never been such a thing as a freemarket in real life, only in theory.

              But I am going to add one more ingredient now: the actions of perfectly freemarkets depend on the presence of perfectly rational actors (people). There is no such thing. Further, people, when empowered with the total freedom to do so, will often act in their own individual interest, even if it is extremely damaging to the collective.

              Success/Failure principle

              Exactly – with one more principle: these market players can take all the risks that they want to – as long as we do not end up paying for it. Which unfortunately is what has happened time and time again. Profits are taken privately, losses are paid out by you and me.

              the minimum wage is one (of many) good examples…

              Even China is instituting a minimum wage. I thought they were an example for us all?

              • Jeremy Harris

                Oooh, a new element to our usual song and dance…

                The perfect people required for free markets fallacy, this is one I used to struggle with until it was explained to me that the free market is simply the expression of what people want to purchase, the business they want to start, where they want to work, etc… It is not about people making perfect decision all the time, but over time given that most people act rationally and will do some investigation into what is the best product and service at the best prices, the most efficient, innovative and productive company or individual will out compete the other…

                It’s amazing to me that certain products and companies still exist but I make no moral judgements about the people that want to buy those products, start those companies or work at them…

                Yes your right, there never has been a perfect free market but please point out to me the perfect bureacracy, where all appointments were made on merit not political expedience, where all the right calls were made on which industires to support all the time, where the power didn’t corrupt it’s holder…

                There have been times and countries close to a free market, none of which I’d like to go back to physically because there is no better time to be alive than now but the principles of certain countries during certain time periods I would like to return to…

                I simply judge what works best, on the balance of probabilties, and when I compare, for example, communist and post communist Eastern Europe I don’t need to look for long for what works best, an unequal sharing of more wealth which has incentives or an equal sharing of less wealth with few incentives…

              • Jeremy Harris

                Further to above, when have I ever advocated bailouts..? In fact I’ve always advocated the opposite…

                I’ve never stated we should follow China at almost anything, given what you know about what I believe individual and economic freedom (and by extension the minimum wage), why would you even begin to think that I would support a totalitarian regime..?

                It’s like talking to a brick wall when you constantly attribute positions to me, I quite clearly do not hold…

                • Colonial Viper

                  but over time given that most people act rationally and will do some investigation into what is the best product and service at the best prices

                  I have no problem with a free market in products and services, and rational actions of consumers in terms of seeking products and services. However, individuals at a corporate level or community level, that is a completely different situation. What is rational action for an individual may be extremely damaging to the entire community (or the corporation – e.g. a CEO who takes actions to get his short term bonuses while damaging the long term prospects of the company – he is acting completely rationally). Remember, in economics, no values/morality/collective basis is required for any action to be considered ‘rational’.

                  but I make no moral judgements about the people that want to buy those products, start those companies or work at them…

                  Indeed, I think you made exactly my point. In this view of economics, starting a war, or polluting pristine rivers, in order to gain economic growth, is completely rational. In fact, maximising the size of the war or transferring as much of the cost of production from the factory into waste going into the river (instead of say disposing of the waste responsibly), would be considered completely ‘rational’ economic action.

                  I simply judge what works best, on the balance of probabilties, and when I compare, for example, communist and post communist Eastern Europe I don’t need to look for long for what works best

                  You got annoyed at me for mentioning China but I did so because of this point you raise. No, you are quite correct have not stated an admiration for China, but the Chinese economy expresses the dynamism, growth and innovation you look for – even if it does not occur in anything like a free market economy. They are the most successful economy in the world however, they did not implode in the GFC, and they are heavily state directed. I honestly thought you would see instructive lessons in the Chinese economic example.

                  I simply judge what works best, on the balance of probabilties,

                  I just wanted to remark, you know that the ‘balance of probabilities’ has nothing to do with the wealth of nations? Deliberate considered leadership and more importantly, the building in of economic resilience does, however.

                  What were the two largest communist states in the world? USSR and China. USSR imploded politically and economically, China has been the strongest growing economy in the world for the last decade, stronger than any western free market democracy. How does that alter your calculation of the ‘balance of probabilities’?

                  • Jeremy Harris

                    So many strawman arguments…

                    What is rational action for an individual may be extremely damaging to the entire community (or the corporation – e.g. a CEO who takes actions to get his short term bonuses while damaging the long term prospects of the company – he is acting completely rationally).

                    No he’s absolutely not, it’s not ever rational to damage the long term prospects of any company…

                    Indeed, I think you made exactly my point. In this view of economics, starting a war, or polluting pristine rivers, in order to gain economic growth, is completely rational. In fact, maximising the size of the war or transferring as much of the cost of production from the factory into waste going into the river (instead of say disposing of the waste responsibly), would be considered completely ‘rational’ economic action.

                    I’ve never advocated for allowing pollution, one should be free to sue anyone who pollutes or damages your life or property via pollution… It should also be illegal to intiate force for profit, i.e. starting a war, that is what we have Police for but politicians are plenty good at starting wars all on their lonesome…

                    You got annoyed at me for mentioning China but I did so because of this point you raise. No, you are quite correct have not stated an admiration for China, but the Chinese economy expresses the dynamism, growth and innovation you look for – even if it does not occur in anything like a free market economy. They are the most successful economy in the world however, they did not implode in the GFC, and they are heavily state directed. I honestly thought you would see instructive lessons in the Chinese economic example.

                    There is further confirmation in the Chinese example that economic freedom promotes growth but there are a few points; China is climbing the industrialisation ladder and the ascent can be rapid, would it be faster if they had less state intervention than they have now but even if it wasn’t I’d never trade freedom and rights for growth… China is totalitarian it abandoned most of the communist tendencies economically a while ago and that is why it is probably still communist, I do not see that trend lasting forever…

                    • Colonial Viper

                      No he’s absolutely not, it’s not ever rational to damage the long term prospects of any company…

                      Of course it is: when you are personally financially incentivised to do so and you bear none of the risk or downside yuorself, it is perfectly 100% rational.

                      Remember, in Chicago School Economics, being “rational” takes into account nothing of values/morals/principles/community interest. Any actor can choose to want anything they desire and to pursue that desire using any and all opportunities available in the free market. Its true human values neutral economics.

                      Its also for instance, perfectly economically rational to allow the destruction of trillions of dollars of other peoples’ wealth if you get to walk away from it all with hundreds of millions worth of bonuses still lining your pockets.

                      Richard Fuld for instance – former CEO of the now deceased Lehman Brothers. He has kept every cent of the US$484M he made while allowing Lehmans to bet on riskier and riskier market positions which created greater and greater bonus generating profits over the last few years.

                      Until it blew up sending thousands into unemployment and destroying tens of billions in investor value.

                      It’s rational actors at work, and its occuring in your grand theory of free market economics.

                      Hey, even I agree its powerful.

                    • Colonial Viper

                      Jeremy, maybe you will find some value out of this. Follow the link from youtube to FORA if you want to watch the full clip.

                    • Jeremy Harris

                      What you are describing is a failure of US company boards for allowing such ridiculous contracts…

                      You can see the blowback to this position in the form of sharholder activism and boards finally starting to do their job, Carl Icahn is their poster boy…

                      On Fuld, what you are describing is close to fraud (though currently legal) and I’ve never advocated for that… The problem you describe is one of moral hazard and a monetary problem, a central bank problem of creating debt money, sound money is when the money supply can only increase when saving are put to use in productive ways…

                      For the Chicago School to work, sound money, no government bailouts, subsidies, etc must be in place together… Essentially your arguments are arguments against the Federal Reserve…

                    • Colonial Viper

                      What you are describing is a failure of US company boards for allowing such ridiculous contracts…

                      Don’t think so. Board members of big corporations tend to be very senior and experienced business people. And they acted completely rationally – they drafted up those contracts extremely carefully with extreme attention to detail to drive deliberate and exacting behavioursfrom a CEO like Fuld: maximum margins on maximum revenues, in order to derive maximum profits and shareholder earnings.

                      They were simply following their rational, corporate responsbilities to shareholders to maximise shareholder EPS quarter on quarter: and of course they knew that their own remuneration as board members would increase the more profitable the enterprise became.

                      Completely, economically rational.

                      (Bear in mind again that economically rational behaviour takes into no account wider societal values, morals, or community interests; just financial self interest).

                      For the Chicago School to work…

                      The Chicago School assumes that all actors are completely rational and act purely on their own behalf, not on the behalf of their organisations or communities. These are hugely problematic positions. The first – actors are not rational. The second – decisions which benefit the individual actor but which harm communities and even huge corporations can often be very rational (particularly for the individual who gets to walk away from the economic smash with the $$$).

                    • Draco T Bastard

                      It is not about people making perfect decision all the time, but over time given that most people act rationally…

                      Except, of course, that they don’t. Over time they’ll make less and less rational decisions as each decision based upon wrong information, psychological justification (I want this so I will find justification to buy it – usually an unconscious action), and even outright lies is used to make another decision compounding the error.

                      Why do we continue with business as usual chasing growth when we know that it’s destroying the Earth’s ecology? Because some people benefit from continuing BaU and so spread misinformation. This misinformation causes doubt and so irrational decisions are made rather than the rational decision to stop growth and curb fossil fuel use.

                      The “free-market” of ideas proving the irrationality of the free-market.

                      What you are describing is a failure of US company boards for allowing such ridiculous contracts…

                      The board members had the same incentives. John Key, when he attacked the NZ$ and almost destroying the NZ economy, had the same incentives. National cutting taxes for the wealthy had them as well. The incentive to become personally wealthier. You will note that under all these rational actions the societies themselves come out worse off which is also worse for the people who caused it even though they themselves came out better off in the short term.

                      Short term rational but immoral which, over the long term, is also irrational.

                    • Colonial Viper

                      Jeremy you hve not yet picked up on the fact that being ‘rational’ in the theory of economics has a completely different meaning to being ‘rational’ as used in normal societal English.

                      In economics, a ‘rational’ decision is one which maximises financial and functional utility to oneself while minimising the financial costs to oneself.

                      Note that this definition includes no component of morals/values/community oriented perspective/environmentally oriented perspective etc.

                      Why is the economics definition of being ‘rational’ so restricted compared to what we might think about as ‘rational’ in daily life? Mainly so that Chicago school economic academics could simplify their modelling and theories.

            • A 1.2.1.2.1.3

              Austrian economics?

              Well, you destroyed any credibility you had built up right there.

              The reason Austrian economics doesn’t get a look in is because it’s an anti-scientific, crank theory, primarily supported by a vocal tribe of internet weirdoes many of whom are under the similar delusion that Ayn Rand was a philosopher.

          • Drakula 1.2.1.2.2

            Us Drakulas and Vipers should stick together!!!!

            I agree, you are on the money or should I say the principles.

        • Bored 1.2.1.3

          Mayhaps Jeremy I am a little hard on you, but as others have noted it was the “market” that caused your families pain, exascerbated no doubt by the parents desire to see their children advance through private education.

          I dont actually hold with the argument that we cant go back to how we were before 1984. That too is a highly selective argument, there was a lot more going on than economic distortion by the Muldoon government. There was the whole 30 year post war economic boom throughout the western world where the distortions caused by the market were tamed by Keynesian economics which underpinned a social contract. That contract was inclusion for all with a fair taxation system that ensured a common base level.

          There is a school of thought which has some merit that the “social contract” was actively undermined by the wealthy worldwide. Ideas like those of Freidman dont get publicity and acceptance without considerable funding and string pulling to put the right people in the right palces to make change. My contention is that the neo lib revolution was the perfect example of a Leninist vanguard party tactic i.e make things tougher and tougher till people say there is no alternative to the revolution. Part of this is to denigrate that which came before and has been progressively mangled.

          • Jeremy Harris 1.2.1.3.1

            It wasn’t the market it all, the painful correction required to some level financial sanity caused the pain…

            People like to pretend the 84 Labour government had a choice, they did – between an IMF handout and them forcibly demanding reforms, bankrupcy essentially and what they did…

            • Colonial Viper 1.2.1.3.1.1

              Of course it was the market; Rogernomics was all about letting financial market forces free, and your family was one which bore the brunt of real human pain.

              People like to pretend the 84 Labour government had a choice, they did – between an IMF handout and them forcibly demanding reforms, bankrupcy essentially and what they did…

              Really quite surprised that you are so fatalistic about the Rogernomics days as being the best path possible. I would say then, as today, TARA: There Are Real Alternatives.

              Unfortunately most of the Lange Govt had no idea about economics and Douglas et al rammed through their Chicago School plans. If a more progressive agenda had been followed we would have a far richer and more added value economy today.

            • Jeremy Harris 1.2.1.3.1.2

              You’re missing my point Douglas did let the economy return to global marketplace and it was painful, but it was the running of an unrealistic socialist system that caused our economy to get so disfunctional and cause the need for the pain…

              You don’t blame the doctor for the foul tasting medicine that cures your illness…

              • Colonial Viper

                You don’t blame the doctor for the foul tasting medicine that cures your illness…

                But you do blame the doctor for screwing your back surgery and leaving you with a limp for years, when a bit of exercise and a couple of stretches would have been much better for you!

              • lprent

                Yep. A National socialist government under Muldoon. I could not resist that one….

                Sure we needed economic restructure and got one. The problem was that Douglas was a bit of an optimistic idiot trying go do the whole thing in five years. Quite simply the economic dislocations impacted too deeply and too fast causing massive amounts of intergenerational problems. You can still see the effects today at the bottom of the cliff with the 3rd generation of unemployed still failing to get enough schooling and acting as a dead weight on the economy, and with the affluent wasting their savings in non-productive speculative bubbles rather than economic investments. Both are the consequences of idiotic rapid economic change.

                The problem with Douglas and his idiographic followers is that they appear to have a problem learning. I guess it must be the rose tinted glasses of pure optimism

                • Jeremy Harris

                  I blame Muldoon for a huge amount of the problem, the writing was on the wall in early 70s when the UK went to the EC, it was clear by 1975 when he got in but he believed his own hype, but he squandered the opportunity to reform before we had a gun to our head… I think he makes it clear that government intervention in the economy is demonstrably bad, for every problem he intervened; wage too high – wage freeze, prices too high – price freeze, currency going overseas – trading freeze…

                  Douglas and co made plenty of mistakes, I’m pro-privatisation but the manner in which they did it was very poor, accepting too low prices, not creating competetive markets, etc but people don’t realise how close we were to the IMF bankers flying in, weeks in it…

                  I guess we can agree to disagree…

                  • KJT

                    Why are you not concerned that NACT is following in Muldoons and Douglas’ footsteps. Borrowing for election bribes, opposing workers getting their fair share and cronyism or outright theft (Slowed down at the moment because Aucklanders voted against a reprise of the great asset giveaway of the 80’s).

                    • Jeremy Harris

                      I’m sorry what are you asking..?

                      I’m very concerned about deficit spending, the government’s low debt levels are keeping the country afloat when private debt is considered… We can’t really afford to blow them out…

                      I’m not sure what your asking me about in the rest of that though…

                  • Draco T Bastard

                    You obviously haven’t asked the essential question:

                    Why did the government do it in the first place and why didn’t the private sector?

                    The answers are still the same and that’s why privatisation doesn’t work.

                    • Jeremy Harris

                      Why was the government in debt in the first place..?

                      Why should a government be allowed to assume debt or “future taxes”, “bills for our children”..? The government isn’t a individual…

                      Would people be getting into debt if they weren’t taxed so highly..?

                      We can play these little semantic games all night really but your statement doesn’t prove anything…

                    • Draco T Bastard

                      Why was the government in debt in the first place..?

                      Because the private bankers like to have a guaranteed passive income. The government could have just printed the money but that’s not allowed as it removes the countries dependency upon private capitalists.

                      Why should a government be allowed to assume debt or “future taxes”, “bills for our children”..?

                      It shouldn’t be and, in fact, it doesn’t have to as it can print the money.

                      Would people be getting into debt if they weren’t taxed so highly..?

                      Probably as the private banking system needs to make a profit and it can only do that by printing money with interest.

                      BTW, the government usually built stuff like rail and telecommunications because the private sector wasn’t – there’s no short term profit in it. The private sector only became interested once the tens of billions of dollars had been spent to put it in place and they could buy it at “market value” which was cents on the dollar to the actual investment. They could make a massive short term profit, as Telecom did, and then have the state jump back in to modernise it when it was obvious that the private sector wasn’t doing the needed investment.

                    • Colonial Viper

                      Indeed. The Government should take up once more its sovereign right to become the primary issuer of currency in the economy, and to wrest it from the private banks.

                      A dollar issued which does not force with it the creation of an opposing dollar of debt, and is therefore a dollar which is owed to no one and creates no interest payable to the issuer 😀

                  • Colonial Viper

                    but people don’t realise how close we were to the IMF bankers flying in, weeks in it…

                    Where did you read this?

                    • Jeremy Harris

                      Some biography, Bassett’s maybe, can’t really remember, they were talking about how it was so close, the diplomats in the US were putting things on their credit cards… (Although after the last year, nothing suprises me about government and credit cards)…

              • mcflock

                “You don’t blame the doctor for the foul tasting medicine that cures your illness…:

                … as long as it cures the illness and doesn’t have side-effects worse than the disease. And then you discover that the doctor’s “remedies” were simply a repackaging of spurious faith-remedies from 200 years ago.

            • KJT 1.2.1.3.1.3

              Note that the countries that took the more market neo-lib path (NZ, UK, USA and most of the third world ) are markedly worse off than those who did not. I would say proof is in the pudding/cake or the lack of!

              • Jeremy Harris

                Really do you want to compare India between 1948 to 1990 and afterwards..?

                • KJT

                  Yeah when they were starved of investment as a punishment for being “too socialist”.

                  By most Western standards they were not.

                  Also ask most of India (Not the rather small upper class) if they think they are better off now.

                  • Colonial Viper

                    But what about Jeremy’s multibillionaire Indian idol?

                    http://seattletimes.nwsource.com/html/nationworld/2013265146_indiarich27.html

                    27 story mansion with a 168 car garage and multiple helipads built in.

                    The guy and his family (I think there are 4 of them, but they will have several hundred staff) are moving in soon.

                    And from whatever slum or shantytown in Mumbai you live in, you will be able to see his home. I’m quietly confident that you think that is ‘aspirational’ or something, Jeremy.

                    • Jeremy Harris

                      I think I’ll change your nickname to strawman, but if you want to know what I think, I’ll tell you…

                      I think it’s grandiose and his money to spend…

                      I think the Ambani brothers employing hundreds of thousands of Indians is a good thing, I think Ambani brothers providing goods and services to Indians cheaper than they would otherwise be able to have them raises Indian living standards…

                      I think the Ambani’s Dad starting as a gas station attendant and leaving a large corporation for his sons, growing the wealth in India is a good thing…

                    • Colonial Viper

                      Like I said, he’s your idol, and I knew he would be. Am I good, or what?

                • mcflock

                  Really – you’re countering 3 named countries and “most of the third world” with 1 named country?

                  • KJT

                    No. With the Nordic countries, Switzerland, Belgium etc Who have gone for sensible mixed economies.
                    Doing much better than the Anglo Saxon countries.

                    Even India, South Korea, Singapore are doing much better with State planning and investment.

                  • Jeremy Harris

                    Sweden the usual socialist paradise cited had a 8% contraction in GDP last year and “most of the third world” is so unspecific it is almost useless as an example…

                    • KJT

                      And after another 3 years of NACT destruction??

                    • Colonial Viper

                      Who gives a rats ass about a temporary GDP contraction if you are looking after your people and still giving them a chance to get educated at very low cost and to stay fed, stay warm with a roof over their heads?

                      This is about basics here.

                    • Jeremy Harris

                      I don’t support the National Party KJT, they believe (it seems) in corporate welfare, which I loathe…

                    • KJT

                      Read up on farmers in the third world starving, because the IMF prescription was use the land to grow crops like coffee or soy for big corporates.

                      No one is starving or even poor by NZ standards in Sweden despite the GDP contraction. GDP is a measure used to hide inequity anyway. There are much better measures.
                      The Christchurch earthquake is going to raise our GDP this year.

                    • Colonial Viper

                      KJT, in that case won’t a couple more massive earthquakes raise our GDP even more? Yes, the more I think about it, maybe this is the way ahead for economic growth in an energy constrained world?

                      Also perhaps NZ should start a war. I hear wars are good for GDP growth too. And build a lot more prisons, perhaps justified by making breaking the 0.05 alcohol limit a jailable offence. Every million dollars we spend on prisons is another million dollars added to our GDP.

                      You are an ECONOMIC GENIUS my man.

                    • Jeremy Harris

                      @KJT, I don’t subscribe to any governmental organisation, quasi or otherwise prescribing anything economic…

                      The IMF should have googled “central planning” and “Soviet Union” before advising that…

                • Colonial Viper

                  Oh yeah, lets. India has decided that its way forward in the economic world is the development of advanced nuclear energy, IT/software, heavy industries (like car making), huge tax breaks and other incentives to attract foreign corporates to base operations onshore, and extremely heavy investment in top level education and R&D.

                  So, in comparison Jeremy what are we doing with our free market to get ahead?

                  • Jeremy Harris

                    You are the king of strawman argument CV, are they following a perfect free trading example CV..? No… Are they corruption free..? Definitely no… Have they massively liberalised there trade in the last twenty years..? Yes… And who has benefitted, the couple of hundred million who joined the middle class…

                    As for tax breaks and special economic zones… Hell yeah, bring it on…

                    Economic freedom, equals greater prosperity… This lesson in history is absolutely clear…

                    • Colonial Viper

                      I think the rulership (and I use that term deliberately) in both India and China have had a very firm hand in guiding their respective economies.

                      Yes, I agree with you, in both those countries, economic freedoms have greatly increased over the years.

                      But both those countries are also taking very conscious top down driven directions on the stage of the world economy. Check out China’s next 5 year plan, due to be replaced very shortly, for evidence of what I mean.

                      Now, if you suggest that we should watch and learn from the examples of China and India in terms of economic direction and economic leadership, you will find me a very sympathetic listener.

                    • KJT

                      This history lesson is absolutely clear. Greater economic freedom means that the freedom for most of us is restricted by lack of income. Economic freedom is followed by social control (To prevent the peasants from revolting) cheats prosper and society crumbles.

                      I you want a society with economic freedom please move there and stop the continual attempts to destroy ours. Somalia is one.

                    • Pascal's bookie

                      Economic freedom, equals greater prosperity… This lesson in history is absolutely clear…

                      Well freedom is obviously a pretty loaded term.

                      But assuming you mean something like I suspect you mean, then you might be interested in the following link.

                      It looks at the data, going back as far as is able, and compares what happens to the rate of GDP growth when the size of the government, (measured as govt revenue as a share of gdp) is either increased or decreased. The initial look was surprising to many and generated a number of responses as to why the expected effect did not show up. The link here adjusts the parameters for those responses.

                      If it really is the case that shrinking the govt produces more growth, or that a growing state as a share of the economy inhibits growth, it doesn’t show up when you look for the effect.

                      http://www.presimetrics.com/blog/?p=92

                    • Colonial Viper

                      PB – I think its clear that the elites know that the fastest and easiest way to get an extra buck in their pocket is to lobby Govt for a tax cut, not build a new factory or design a new product (too old school and too much hard work for them).

                    • Jeremy Harris

                      I’d love to KJT but where to find one..? HK is pretty good… The USA would be if they returned to following their constitution…

                      Somalia doesn’t have the rule of law, an organised national armed defence, a national police and intelligence agency, a constitution, etc… Everyone from Communists to Libertarians believe these things are essential to a functioning country (and therefore economy)…

                      NZ is pretty good on economic freedom, about 3rd in the world, I’m a 6th generation Kiwi so wouldn’t want to leave…

                      @Pascal, the size of government and economic freedom are different things, it really depends on what that government does…

                      @CV, very true, most entreprenuers are free trader till competition starts biting into them, then it’s not “fair, so is more government and more governmental power, exertiong force the public and corrupting the MPs the answer to this problem..?

                      You often advocate for more money for business men as long as it’s the industries you approve of…

                    • RedLogix

                      The USA would be if they returned to following their constitution…

                      No you mean …take the USA back to that mystical pre-Industrial nirvana that libertarians believe was some kind of utopia.

                      Simple fact is that all the ‘free-market’ economies are failing. The more ‘free’ the worse they are doing.

                  • Colonial Viper

                    You often advocate for more money for business men as long as it’s the industries you approve of…

                    Actually this is quite true Jeremy, as a summation of my position. Or more accurately, I support more money and resources being directed towards specific productive industry sectors (as opposed to banks and finance companies for instance).

                    I would have had far less problem with the Hobbit getting more Government money if workers could be seen to be benefitting in terms of long term industry strucutral change (collectively agreed minimum terms and conditions). However I also thought that Jackson as a $450M+ net worth industry unto himself – is hardly one which still requires tax payers assistance.

                    Have you thought about the q I posed about what lessons you think NZ should learn from the Indian and Chinese economies?

      • Fisiani 1.2.2

        Typical left thinking. Quibbling about sharing out a meagre cake instead of growing the cake to give everyone a better share.

        • KJT 1.2.2.1

          You lot had 30 years of the policies you reckoned would grow the cake, but you took all the ingredients.

          • Colonial Viper 1.2.2.1.1

            Took all the ingredients and sold them to foreigners and privateers for the bottom dollar, more like.

            Brilliant, KJT

        • Colonial Viper 1.2.2.2

          BS. Cakes been growing Fis. Look at GDP over the last 10 years. Problem is, the wealth is not getting shared with the many in NZ, only the few:

          Out of the ten guests at the NZ dinner table, one guest takes 6 slices of the cake. The other nine guests have to fight between the remaining 4 slices. And out of those, two NZ’ers will get nothing.

          • Fisiani 1.2.2.2.1

            Look at GDP over the last 10 years. Precisely. Piss poor performance. 8 of which were Labour. We have been in recession for 5 years and only come out of recession in the last year with skilled hands at the wheel. Already the inherited decade of deficits has been cut to just 6 years and the primers of growth are in place or soon will be.

            • Colonial Viper 1.2.2.2.1.1

              OK mate lets take a look.

              http://www.rbnz.govt.nz/keygraphs/Fig2.html

              Shows we beat US GDP growth from 2001-2005.

              Not bad huh, beating the leader of the free world?

              We have been in recession for 5 years

              More frakin Fis style BS, the Reserve Bank only declared a recession in August 2008. And the above chart shows that we have had positive change in GDP every year from around 1993 through to and including 2007.

              Gawd you are full of it.

    • Draco T Bastard 1.3

      If we have a minimum universal income (which I agree with) set at say $450 per person over 18 per week,

      That’s not a universal income and would, effectively, leave children in poverty. I agree though that the minimum wage could be removed if we had a Universal Income.

      Full employment via government was a disaster pre 1984, it created a artifically high wage

      Not really, most homes were single income at that point and nothing can be supplied at less than cost. Basically, the wages needed to be higher.

      it was displayed quite clearly when the SOEs were corporatised and productivity soared,

      Nope, lots of people made redundant pushing up profit doesn’t actually show an increasing productivity. In Telecom less work was actually being done which is why we’re now looking at paying out taxpayer money for FttH. Less work done by less people would indicate that productivity stayed about the same.

      If we really want to create full employment without government as a last resort…

      The only way we can get full employment is through government intervention. The private sector wants 6% unemployment to keep wages down. Considering productivity increases we would probably have to consider just what full employment means (ie, everyone doing 20, 30 or 40 hours).

    • Bunji 1.4

      If we had a minimum income but no minimum wage, businesses would just use that to pay very little indeed. The worker could survive on a low income, topped up by the government, and the business would in effect be subsidised by the government. Apart from violating WTO and free-trade agreements, would you like the government to pay a large section of the country’s wages for private profit? We’d be bankrupt in a week.

      • mcflock 1.4.1

        …unless the businesses paid an exorbitant amount in corporate tax, which they would still scream about even if the govt was picking up the bulk of their wage tab.

      • Draco T Bastard 1.4.2

        Taxes would be adjusted so that there wouldn’t, in effect, be any subsidies.

      • Jeremy Harris 1.4.3

        I cover this point in my original post:

        (but encouraged people to negotiate as high a wage as possible by giving a bonus the closer their wage got to the minimum universal wage)

        Between MSD funds and WFF we’d have over $20,000,000,000 to cover the cost, I hazard a guess that we’d save at least 25% and that’s without Reserve Bank reform and tax cuts…

        • Pascal's bookie 1.4.3.1

          A bit intrigued as to what you mean by this, because it’s not clear. Give us an example.

          What happens if an employer pays some one $200wk. And what if they pay $400wk.

          • Jeremy Harris 1.4.3.1.1

            Just roughly:

            At $200 a week they would get a $250 top up to $450 plus $8 dollars bonus for their pay level

            At $400 a week they would get a $50 top up to $450 plus $16 dollars bonus for their pay level

            At $450 a week they would get a $20 bonus

            From a weekly salary of $450 to $470 a week the bonus is topped up so total remuneration equals $470

            Those unemployed get $450 a week

            There are no taxes till $470 of remuneration

            It’s known as a negative income tax, i.e. the government pays tax to you till you reach a certain level of income

            • Pascal's bookie 1.4.3.1.1.1

              That doesn’t really deal with the problem you claimed you had covered. Which was that without a minimum wage, the policy becomes a near total subsidy for low wage industries’ labour costs

              Also, think about the incentives.

              @At $200 a week they would get a $250 top up to $450 plus $8 dollars bonus for their pay level

              …that’s $8/wk benefit for working vs not. I don’t think that’s going to happen.

              So all this

              (but encouraged people to negotiate as high a wage as possible by giving a bonus the closer their wage got to the minimum universal wage)

              is either irrelevant because labour won’t be available below the GI, or it’s just a transfer of taxpayers money to low wage employers by virtue of slashing their labour costs through subsidisation.

              • Jeremy Harris

                You asked for an example of how it would work, not exactly what I would propose, I’d have to look at the total, MSD and WFF budgets… And have access to a modelling programme etc…

                I do take your point but the money does end up in the hands of the worker not the employer but yes the employer does get a benefit, however I do beleive we all receive a benefit, the worker by getting experience and skills, the country by increasing productivity rather, the employer… We are spending this money, do we want to subsidise work or non-work..?

                • Colonial Viper

                  As long as you recognise that not all useful and important work done in a society is paid or payable. Which from your wording, you may not accept.

                • Vicky32

                  “the worker by getting experience and skills”
                  I hear that tripe from bosses all the time! Yet workers who already have experience and skills get treated as if they haven’t.

    • Andrew 1.5

      Jeremy, you are a legend.

      Lefties think everything can be solved by throwing a ton of money at a problem. (never their own money, always someone elses). The reality is much more complicated.

      • Colonial Viper 1.5.1

        Lefties think everything can be solved by throwing a ton of money at a problem.

        Don’t know any lefties who actually think like this. Just caricatures made up by the Right.

        However, I do know that a bunch of Right wing businessmen, bankers and financiers who think that a lot of problems would be solved if society throws a tonne of money at *them*.

        Well screw it, if it comes down to it, better at us (the many) – than at them (the few).

        What do you reckon?

    • KJT 1.6

      “Somalia doesn’t have the rule of law, an organised national armed defence, a national police and intelligence agency, a constitution, etc…”. How do you recncile economic freedom with having to pay for these things.
      Somalia is the perfect country for you as you can have all the economic freedom you want. No State to pay for. Take Douglas and Key with you!

      • Jeremy Harris 1.6.1

        They are things the private sector cannot and should not do (I also forgot prisons, courts and civil defence) and I should pay for them the same reason I pay for Sky, I want them…

        Economic freedom doesn’t work without enumerated rights and protection from force…

  2. tsmithfield 2

    “We know that poverty is the root of a good deal of society’s problems from crime, to poor educational outcomes, to poor health.”

    Or is it that crime, poor educational outcomes and poor health are at the root of poverty? I think this is a much more useful way of looking at the problem. If we see poverty at the root of societies evils this implies that throwing money at the problem will make it go away. However, by looking at things from the other direction, there are some achievable, practical things that can be done to reduce poverty.

    • Bored 2.1

      Its actually very simple TS, lets just take our lead from the other end of the scale, the wealthy. Now if we just made sure that everybody had a good educational background in a private school, and mummy and daddy just coughed up for private healthcare, bought great food and lots of lovely off shore holidays for the sun tan, well how well would we all be. Now the job and money thing, we should all have family connections, the ability to pass exams and get jobs as corporate lawyers using daddys business connections…plus inherit the family fortune…et voila…poverty no more. Also no crime, except the white collar variety, but hey thats not real is it?

      • tsmithfield 2.1.1

        Did you actually read what I said before launching into your rant?

        • Bored 2.1.1.1

          Yes, I just get sick of your adherence to ridiculous specious arguments, so for once I thought lets do a 180 degree test and see what happens. And the outcome is not nearly as ridiculous as your assertions.

    • Bright Red 2.2

      – “We know that poverty is the root of a good deal of society’s problems from crime, to poor educational outcomes, to poor health.”

      Or is it that crime, poor educational outcomes and poor health are at the root of poverty? –

      No, it’s the way Marty has it. Our behaviour is largely a result of our environment, not inherent (God-given?) moral goodness or otherwise, as the Right believes.

      • mcflock 2.2.1

        nah, babies are born into poor families because they’re more likely to commit crime, not complete secondary education, and be unhealthy later in life.

        Retrospective karma?

      • tsmithfield 2.2.2

        BR “Our behaviour is largely a result of our environment…”

        Very disappointed with you BR. I expected something a bit more intelligent from you. I agree with this part of your comment entirely though. How about you start making a list of all the things that comprise an individual’s environment. Then you’ll understand my point. The environment is a lot wider than the income stream. The income stream is just a small part of a person’s environment. There are plenty of other areas to make changes.

        • mcflock 2.2.2.1

          the income stream is one of the most significant parts of a person’s environment, especially when they are you. It often determines health services, educational quality, hygiene availability, social cohesion of the family structure (e.g. one or both parents working v. long hours for years, ability to travel back home to reinforce wider family connections if economic migrants), and has an influence on many other facets of life.

  3. It’s good to see this debate being given prominence on the Standard. It’s time to make a clear break from neoliberalism and leaving the unemployed to the mercies of the free market for jobs.
    Matt McCarten is arguing that what we need now is a planned economy, to respond to the economic crisis-

    “The free market won’t reduce unemployment. Government intervention is required to do that. Mana, like every other electorate, has about 3000 official unemployed. The dignity of meaningful work is an economic good in itself. To employ 3000 on $15 an hour in fulltime work costs less than $100m a year net.

    After giving over $1.6 billion of our money to South Canterbury Finance it’s clear it’s not about have we got the money, it’s about priorities. I want a strong message sent that no-one should get the dole. The government will invest in jobs.

    In Mana we could put two teachers’ aides into every classroom creating almost 1000 jobs. We could get the Wananga to train 500 young unemployed in basic building skills and set them up to repair and upgrade run-down state houses. We can get another 500 into home help for senior citizens and the sick. It’s not science; it’s simply whether or not we have the political will.”

    After the Hobbit War and the South Canterbury Finance bailout, we should take no lectures from the Right about the evils of State intervention- Lady Gaga today on Nationl radio claiming a $15ph minimum wage is “unaffordable”, for example.

    The money spent on South Canterbury and the Hobbit would be better spent eliminating the scourge of poverty and joblessness once and for all.

    • Pat 3.1

      Yes McCarten can instantly wipe away unemployment – by having everyone employed by the government.

      And you get 3 choices – teacher aide, home help or hammer hand. Awesome!

      • mcflock 3.1.1

        Better than the dole.

        • Colonial Viper 3.1.1.1

          If you offered everyone on the dole a $14/hr job, 75% of the unemployment stats would be gone by tomorrow morning.

          But guess what. Since our political and economic ‘leaders’ deliberately hollowed out our economy and hollowed out our job market, these unemployed people – our friends, our family members, our former school mates – will have to continue going to waste.

      • The Baron 3.1.2

        I’ll take a home help slave for free in exchange for all the welfare I pay – sounds like a sweet as deal. The Govt can replace the minimum wage I pay my current cleaner.

        #rightwingprick

        • Vicky32 3.1.2.1

          You don’t pay welfare, you self-named right wing prick! You pay taxes, a fraction of which goes on what you call “welfare”. You are not *the* tax payer no matter what you hear on talkback radio, you are one tax payer out of millions. Shame.
          Deb

          • The Baron 3.1.2.1.1

            Shame – shame for what? Are you ashamed of the fact that you’re soaking in money that me and the other net tax payers pay?

            oh no, not your fault, you’re a victim, you need a bit more though… wah wah wah. Shame on you for being a parasite on society!

            • Lanthanide 3.1.2.1.1.1

              I’m ashamed of the fact that you don’t want to pay towards the society you live in.

              • The Baron

                When did I say that? I’m quite happy actually.

                I simply object to a handout parasite like deb here telling me to be ashamed for paying her fair share too.

                Who is being selfish again? When are you gonna start contributing your share too deb – or is our society all my responsibility?

                • mcflock

                  “handout parasite”?

                  As someone who used to be a welfare recipient (like our glorious leader), Baron, I take that personally.

                  You know exactly where you can stick that keyboard.

                • Vicky32

                  Well, Baron von Nutjob, are you noit aware that beneficiaries pay taxes? No? Well, we do – and then, when I work as I do whenever I can, (about 3 days a month so far is all I’ve been offered), I pay tax then… $112.09 this week. So, it’s possible I am paying part of *your* share as well, given that no self-respecting RWNJ pays all the tax he’s liable for – if he does, he fires his accountant!

                  • The Baron

                    Pay taxes on their benefits? Doesn’t really count does it – but OK, you pay a miniscule amout of tax. There you go.

                    Oh wah wah wah I’ve only been offered 3 days work a month, I’m a victim, it’s all national’s fault, wah wah wah.

                    How about you start taking responsibility for building the society that you want everyone else to pay for?

                    SHAME.

                    • mcflock

                      Careful, Baron. Your diseased little mind is showing.

                      Shame on you.

                    • Colonial Viper

                      Hey if some bright spark – apparently our set of highly paid elite business leaders are full of them – can generate 100,000 new jobs right now each paying a measly $14/hr, I bet the unemployment queues would be 100,000 shorter by Monday morning.

                      Show people how its done and how your concept of the free market is going to help out our fellow NZ’ers into the productive economy. And in one fowl swoop, disprove all the hateful BS spin that unemployed = lazy, unwilling to work, dole bludgers.

                      So all you elite Righty business types out there, get to it.

                      *checks watch and waits*

            • Colonial Viper 3.1.2.1.1.2

              .Are you ashamed of the fact that you’re soaking in money that me and the other net tax payers pay?

              Firstly, being a net tax payer does not make you a more moral or superior person. If thats your source of ego and self identity in life, get over it.

              Secondly, the frakin dole is like $216.79 pw *before tax*. Did you just redefine the concept of “soaking in money”? Because to me, soaking in money is like earning *at least* $4,000-$5,000 pw before tax. Probably more.

              In contrast, the unemployment benefit is the equivalent of getting spat on in the hot sun, its dry and gone before you really figure out what’s hit you.

              • Vicky32

                I get much less than that, CV, thanks to a “debt” created when WINZ failed to take note of the income I declared from a temporary job… I’ll be paying back that “debt” for years, because it grows every time I get earnings (about once a month so far this year) and WINZ don’t follow the proper procedure (adjusting my benefit payments – the last woman I declared to, just added my income to the debt, although she could have adjusted my payments – the next woman I spoke to complained about it – much good does that do me!
                I suppose I ought to be thankful that I realised that the debt was twice what it should be and asked for a review of decision, resulting in a guy cheerfully telling me that the correct amount had been “applied twice”! (He didn’t give a toss, although I certainly did..

                • Colonial Viper

                  Sorry to hear that Vicky. There is something seriously screwy in WINZ land.

                  • Vicky32

                    Absolutely true, CV… I suspect a lot of them are on power trips, but the main thing seems to be that they don’t have sufficient training! (At least one of them has complained to me about not having much idea about what she was supposed to do!)

      • Vicky32 3.1.3

        I’ll be a teacher aide! (It’s what I trained for originally when I was on the DPB… 🙂 )
        Deb

  4. JJ 4

    Its magical thinking to say that by lifting people above an *arbitrary* threshold societies problems will suddenly poof away.

    If you want a better life, you’ve got to work your butt off – thats that.

    • Draco T Bastard 4.1

      If you want a better life, you’ve got to work your butt off – thats that.

      No we don’t – we already produce far more than we need it’s just that it’s all going to the benefit of the very few.

      • JJ 4.1.1

        And if you want a bigger slice of it…. time to work hard.

        • Draco T Bastard 4.1.1.1

          The poor already work hard – it’s not benefiting them but the thieves at the top who take it all.

          • JJ 4.1.1.1.1

            I know plenty of poor people who don’t work hard, and don’t take responsibility for planning their own careers. Thats their problem – not mine.

            • mcflock 4.1.1.1.1.1

              Well I know plenty of poor people who will take any work coming, work long hours, don\’t buy flat screen TVs on hp, and still have difficulty making ends meet.

              And because I\’m not a self-centred dropkick, I tend to think that the problems of my neighbours also have an effect on me.

            • Colonial Viper 4.1.1.1.1.2

              I know plenty of poor people who don’t work hard, and don’t take responsibility for planning their own careers. Thats their problem – not mine.

              Look you hard hearted sociopath, don’t blame people for situations out of their control created by the poltiical and economic ‘leaders’ of this country.

              The jobs do not exist, NAT are worsening the problem, and NZ’ers are leaving at record rates because of the type of BS economic victimisation you are promoting.

              • The Baron

                Either of you reckon that in the real world rather than this masturbatorium things tend to fall somewhere between those two extreme points of view?

                Sorry to piss on your psycho little flame war though.

                • Colonial Viper

                  Oh its just a bit of harmless fun you know, shouldn’t be any long term injury from it, right?

                • mcflock

                  I hope you include JJ in that comment, b.

                  • The Baron

                    Of course I am. There is the lazy poor and the hard working poor; just like there is the dishonest rich and the honest.

                    If your argument or policy relies on pretending that either side doesn’t exist, then either you’re a myopic ideologue or a moron. Sadly a lot of that above from both sides.

        • Colonial Viper 4.1.1.2

          And if you want a bigger slice of it…. time to work hard.

          Yeah great, another AMWAY sales guy. Get out of my face.

    • mcflock 4.2

      actually, the “arbitrary” threshhold generally corresponds to a package of different measures of hardship & deprivation, hence it has become a de facto social descriptor multitool.

      Other measures of hardship include lists of things like being able to replace shoes and clothing as it wears out, diet, proportion of income spent of housing, holidays, access to computers in the home, ability to purchase required school supplies, etc etc etc.

      But don’t let the fact that you don’t know what you’re talking about get in the way.

  5. M 5

    No Marty we can’t afford it, but by jingo it looks like we’re going to get it in spades.

    We can’t expect the well-to-do to share even a little bit by paying their fair share of tax even if the system has been geared largely in their favour because, you know, they’ve hauled themselves up by their bootstraps so why can’t everyone else do it. What many of them forget is that quite often poor people may come from families where there are addiction problenms, lack of qualifications to get jobs, parental neglect – heck some people may not have any family and supportive friends may be in short supply.

    While the more fortunate recline in their golden ghettoes and slag off people doing it hard they would do well to remember that people can only be kept down for so long and if many end up being part of the sugar bag class then this will provide a groundswell of support to bring about a government like MJS did in 1935.

    NACT has everything at its fingertips to massively improve the lot of the poor but they won’t because the poor need to take their medicine for the crime of being poor

    • The Baron 5.1

      Oh cool that does sound simple. So, what’s that “fair share of tax” rate that will make all these problems magic away?

      • Colonial Viper 5.1.1

        Tax provdes a means to an end Baron. Higher taxes (or lower taxes for that matter) can solve nothing in of themselves.

        • The Baron 5.1.1.1

          Kinda dodged the question tho didn’t you. Don’t worry, I only want your opinion – you don’t need sources..

          So what’s the “fair share” of tax for these rich pricks?

          • Colonial Viper 5.1.1.1.1

            I can’t answer your question fully without a team from Treasury crunching numbers for me.

            This is also not an issue about “fair share” this is an issue of what the wealthy can afford to pay while still keeping a large proportion of their monies and continuing to have all the luxuries of life at their fingertips.

            I am thinking along the lines of:

            0% PAYE For the first $10,000 earned p.a. (all full time workers)
            0% GST on all fresh and frozen fruit, vegetable, dairy and meat
            35% PAYE on every dollar earned over $150,000 p.a.
            45% PAYE on every dollar earned over $250,000 p.a.
            49% PAYE on every dollar earned over $500,000 p.a.
            30% CGT (family home up to $1M excluded)
            30% Estate tax (on each dollar over $500,000 in assets, family home excluded)

            Other tax rate alignments etc will also be necessary.

            • The Baron 5.1.1.1.1.1

              You’re missing the rate for over $10k but under $150k. Pretty big omission given thats what the vast majority of workers will actually pay – including me. Surprised that you have only one rate in mind here, given that rich prick kicks in at $60k, doesn’t it?

              And it isn’t that hard to crunch the numbers on this – Stats has all the info for you.

              Question though – what if in 5 years time it isn’t enough for whatever problem you perceive then… you wanna reserve the right to keep hiking?

              • Colonial Viper

                5 years time…the world is going to be quite a different place in 5y time so its impossible to tell what will be required. What I do know is that we need to build a resilient economy, not one which is overleveraged in debt and where people become a wasted commodity.

                Yeah, I didn’t really bother to fill in that middle income bracket, maybe keep the same as present?

                BTW what’s the $60,000 threshold you are talking about?

                • The Baron

                  The one Cullen introduced in 1999? Now amended by the nats? The one t hat if you earn over it, you’re a rich prick, also according to Cullen?

                  Ring any bells?

                  Btw, still no “ideal” rate from you the oh what 90% of workers earning between 10 and 150k… Mindless rhetoric again huh…

                  • Pascal's bookie

                    The one t hat if you earn over it, you’re a rich prick, also according to Cullen?

                    Liar.

                  • Colonial Viper

                    Mindless rhetoric again huh…

                    Gimme a break, I’m not here to design a new tax regime for your personal satisfaction.

                    • The Baron

                      Christ on a bike CV – all I’m asking is for you to put a lil brain into your fanboyism.

                      See this shit is HARD isn’t it – trying to work out what is apparently a fair share doesn’t come from a labour pamphlet huh? Despite all your bleating, you have no clue about what to do for the 90% of wage earners that will meet your lofty standards of “fairness” “respect” and “paradise”.

                      Instead, all you can propose is incrementally higher tax rates on the 5% of the population that earn them. Brainwave!

                      Wow… viva… la… revolution… slow clap.

          • Lanthanide 5.1.1.1.2

            I’d settle for the rich pricks and companies actually paying the correct tax that they should be paying. Remember the news report that 50% of the top 100 wealthiest in NZ have structured their affairs so as to reduce the amount of tax they legally have to pay? Yeah, sort that out and then see how the books are before tweaking numbers further.

            • Descendant Of Smith 5.1.1.1.2.1

              I’m still keen on considering a taxation system that doesn’t allow any deductions but is paid on gross turnover.

              This should mean a fixed taxation rate on all businesses that is simple to administer without having to spend hours working out what can be deducted. This would reduce compliance costs for small business and sole traders. Larger and more complex businesses would have to still produce accounts for reporting to partners and shareholders but issues over what they spend their profits on belong to those who own the business.

              I was trying to work out what this percentage could be e.g. 4%, 10% to collect the same total tax we do now , and can find tax take figures but not turnover figures – I’m not sure that total GDP is what I’m after.

              This would disincentive vertical integration as a means of tax minimisation and ensure that speculative businesses pay the same level of taxation as businesses that actually produce something.

              Does anyone know where I could get total gross turnover from?

  6. OleOlebiscuitBarrell 6

    the usual measure internationally is that households with incomes below 60% of the median are in poverty

    Set in this way, is it not really a measure of inequality, rather than poverty? If you were living in a society where the poorest earned enough for food, housing, clothing, booze, fags and scratchies, the fact that they earned 60% below the median would not, by any sensible measure, mean they were in poverty, would it?

    • Bunji 6.1

      Do we live in a society where the poorest earn enough for “housing, clothing, booze, fags…”?
      Can you name a society where those who earned less than 60% of the median earned enough for “housing, clothing, booze, fags…”?
      Otherwise your point is entirely conjecture. In reality prices (particularly of housing) rise with the average (not median) wealth.

      You currently need 78% of average income to fund a mortgage on an average priced property in Auckland (having saved 11 years for a deposit) – sound affordable to someone on 60% of median income?

      • OleOlebiscuitBarrell 6.1.1

        You have (perhaps successfully) demonstrated that there is poverty in New Zealand.

        My question is directed at the assumption that poverty is a relative thing, rather than an absolute.

        • Bright Red 6.1.1.1

          of course poverty is relative. This is developed economy/society – for people to be able to contribute fully they need a standard of living that is radically different from that of an African goatherd.

          Moreover, as the Spirit Level and a whole lot of research shows, inequality, not just absolute poverty, is a driver of negative social and economic outcomes.

          • Colonial Viper 6.1.1.1.1

            You know, if you earn $65K p.a. and you live in a neighbourhood with people who all earn $40K p.a. and hang out with friends who all earn $40K p.a. you will be considered frakin rich and be the man with the mana.

            If you earn $250K p.a., and you live in a neighbourhood where everyone is on $1M p.a., and all your friends earn $1M p.a., you will feel like the poorest, sorriest loser on the face of the earth.

            • mcflock 6.1.1.1.1.1

              although if your toilet cistern takes hours to fill because your water is limited because you couldn’t pay the bill – that’s not exactly “rich” by most standards.

              If you’re living 4 people to a room to keep the rent down – that’s not exactly “rich” by most standards.

              If you have been screwed by WINZ so are on foodbank rice for weeks or months – that’s not exactly “rich” by most standards.

              If you can’t afford new shoes even though your current pair leak in the winter and the soles are worn paper thin – that’s not exactly “rich” by most standards.

              If you can’t afford to go to the doctor for a week even though you need a script for painkillers for your back – that’s not exactly “rich” by most standards.

              there is no depression in New Zealand;
              there are no sheep on our farms …

          • The Baron 6.1.1.1.2

            I’m amazed that it took this long for the spirit level to come up. Kinda like a bible for you lot aye?

            • Colonial Viper 6.1.1.1.2.1

              Nah the book is somewhat derivative as the research has been around for years; but it did provide a vehicle for that research to enter the common discussion.

    • Vicky32 6.2

      “Booze, fags and scratchies”, what a nasty attitude you have towards people who are not like you! The word pillock springs to mind…

      • OleOlebiscuitBarrell 6.2.1

        Vicky32,

        But I picked out exactly the things that make me happy. Are you suggesting that the only path to true happiness is yoga, Italian peasant food at $32 a plate and Concert FM? What a superior attitude you have to people who are not like you.

        The word “pompous” springs to mind.

        • Vicky32 6.2.1.1

          The things that make you happy? Your tone didn’t convey that at all… I thought, reasonably, that you were having a sneer at the poor.
          Concert FM? Yes, sometimes, more often just standard RNZ…
          Yoga? Not a chance.
          Italian peasant food at $32.00 a plate? Yes and no. My Italian friend sometimes cooks peasant food for me, at a cost for me of $0.00 a plate!
          Deb 🙂

  7. JD 7

    “It’s good to see this debate being given prominence on the Standard. It’s time to make a clear break from neoliberalism and leaving the unemployed to the mercies of the free market for jobs.
    Matt McCarten is arguing that what we need now is a planned economy, to respond to the economic crisis-”

    I agree, we should have a planned economy which is prosperous and disciplined – along the lines of Singapore.

  8. Joe Bloggs 8

    You’ve mistakenly used household income as your measure of poverty. This approach ignores all of the other dimensions of poverty and is far too narrow a definition.

    That definition pays no account to the benefits of universal access to New Zealand’s education system, access to potable drinking water, clean and safe foods, medical care, &c.

    The World Bank defines moderate poverty as living on US$2 a day (adjusted for purchasing power parity) and comments that a key dimension of poverty is the inability to acquire the basic goods and services necessary for survival with dignity.

    The World Summit on Social Development on Copenhagen in 1995 defined poverty as

    “a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services. It includes a lack of income and productive resources to ensure sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments and social discrimination and exclusion. It is also characterized by lack of participation in decision making and in civil, social and cultural life.

    It’s fair to observe that under these definitions the number of people living in genuine poverty in New Zealand is extremely small.

    What’s lit your fuse is the uneven distribution of wealth within NZ’s society – and unfortunately for your argument the wealthy few are also the primary source of investment capital for large-scale enterprises. Take away that source of capital or dilute it across the masses and you stifle economic growth.

    All of the ingredients for prosperity are freely available to New Zealanders – we have secure property rights for physical and intellectual property and for one’s own person (civil liberties); we have systematic ways of examining and interpreting the world; we have widely available and open sources of funding for economic development; and we have highly developed information and logistics systems.

    With all that available all it needs is to take personal responsibility for bettering one’s condition. Like JJ says if you want a better life then you’ve got to work your butt off

    • Bunji 8.1

      “Take away that source of capital or dilute it across the masses and you stifle economic growth.”
      Scandanavia would disagree. And the US, with its massive concentration of wealth, with 74 people earning more than the poorest $19million workers put together, doesn’t exactly have the hottest growth rate about now.
      In fact if you “dilute” that capital across the masses what you instead find is that more people with ideas have the money to put them into practice, and more businesses flourish, and more wealth is created. Best not that we’re all relying on the top 0.01% to be in charge of our destiny – there’s no guarantee they’re any good.

      All of the ingredients for prosperity are freely available to New Zealanders
      Not freely. Those property rights only do you any good if you can afford to buy property. Those sources for economic development are only available to those people who know people. The information and logistics systems are a lot more use to those with enough education to use them. Those in poverty won’t have the cash to take advantage of most opportunities, and are unlikely to have the education to take advantage of the rest. That’s why it’s a good to eliminate relative (as opposed to absolute) poverty, which is also “characterized by lack of participation in decision making and in civil, social and cultural life.”

      • Joe Bloggs 8.1.1

        what happens when you spend capital evenly across the mass population is that everyone is better off by a small amount, and by splitting capital this way no individual is capable of making the invcetments necessary for large-scale enterprises.

        In industrial societies there’s a long delay between capital outlay and revenue and that underwriting gap is critical when you spread capital evenly across a population. Even JP Morgan’s personal fortune wasn’t enough to underwrite the Edison Electric Light Company when it commercialised the electric light bulb.

        You have to remember that an investor doesn’t just provide capital; they also risk it, and in most cases they lose it (e.g. dotcom bubble). In this sense, the capital market is like a giant lottery. Millions buy tickets, but only a lucky few win.

        Split $5b across a million people and you give each one $5,000. Give each person $5,000 and you end up sponsoring a failure rate of 80%+ for all of their small businesses within the first 2 years.

        • Joe Bloggs 8.1.1.1

          as for access to property, these apply both to physical property which you can buy, and to intellectual property which you can create for yourself.

          It also applies to civil liberties and civil rights as well (I would prefer that we used the term civil responsibilities but that’s another debate). NZers have a pretty good run on all accounts.

          Sources of funding for economic development are pretty freely available the last time I went looking. There’s all kinds of cheap money out there – benefits, study grants, student loans, small business development loans, &c.

          And as for information and logistics, I can log onto the internet, I have a bewildering choice of daily media to pick from, I can put a parcel in the post and have it arrive on the other side of the world within days, … so can you, and everyone else in NZ

          This is just one of those guilt and self-loathing trips that Marty G indulges in from time to time. It’s a great growth industry, but you need to go post-industrial.

          • Colonial Viper 8.1.1.1.1

            I can log onto the internet,

            This is one of the places your line of reasoning falls down. Sure you can log on to the internet. But where in NZ can you get a 20Mbps 250GB internet plan? Oh you can’t. Because we’re still backward in the 2003 internet age.

            funding for economic development are pretty freely available the last time I went looking. There’s all kinds of cheap money out there – benefits, study grants, student loans, small business development loans

            Its bloody hopeless. Can’t believe you have included ‘student loans’ as funding for economic development. What lowbrow thinkers we must be. So, where exactly does a new company go to pick up $750,000 in NZ venture capital?

            Oh thats right, apart from a small handful of privateers (e.g. the crowd Neville Jordan started up) you can’t, because our capital markets are shite and NZ’ers would prefer to go into debt and put money into houses instead of into businesses.

        • Colonial Viper 8.1.1.2

          what happens when you spend capital evenly across the mass population is that everyone is better off by a small amount, and by splitting capital this way no individual is capable of making the invcetments necessary for large-scale enterprises.

          Remember the profile of the NZ economy, most businesses in this country have 10 or less employees, NZ does not need *large scale enterprises* to create an economic resurgence for itself.

          Split $5b across a million people and you give each one $5,000. Give each person $5,000 and you end up sponsoring a failure rate of 80%+ for all of their small businesses within the first 2 years.

          Have you finished your MBA yet? I hope not.

          You could split up your money differently and give 100,000 people $50,000 each. And guess what, you would still be sponsoring a failure rate of 80%+ for their small businesses over 2 years.

          No difference would be expected. So what exactly is your point?

          • Joe Bloggs 8.1.1.2.1

            the failure rate for large businesses in NZ is not 80% or anywhere near it.

            Give $5bn to a million people and lose $4bn with their failures

            Give $5bn to five companies and in the unlikely event one fails, then lose $1bn.

            Alimentary dear Watson as my stomach says

            • Colonial Viper 8.1.1.2.1.1

              the failure rate for large businesses in NZ is not 80% or anywhere near it.

              Wow you really missed the boat on this one.

              The failure rate is associated with NEW businesses. Their size is irrelevant – whether they start of with 1 staff member or 20.

              By the way, if you are insane enough to think that giving $1B each to 5 brand new companies is a good idea, you’ll probably also understand that the directors of those new companies will likely take that money and not be seen again. (i.e. your losses would be somewhat greater than 80%…)

    • KJT 8.2

      The argument in the 80’s was if you let the wealthy have a bigger share they would invest more and build the economy. In fact the reverse happened. Investment in business in NZ dropped to 1/3 of what it was before, as the wealthy asset stripped NZ to gamble in US derivatives.

      As for working your butt of. My job. Highly skilled and in demand job pays 50% less than it did in 1982 adjusted against the CPI. That is why there are no young people working with me. they all left for higher skilled wages in countries like Singapore Australia and India.
      Even the immigrants only come to do it for NZ’s perceived social benefits. That source is drying up also as they realize the social cohesion and education that they come here for is being demolished.

      • Draco T Bastard 8.2.1

        We don’t have any social cohesion any more and what we do have is directed (by the adverts and programming in the MSM) to making the rich richer at everyone else’s expense.

  9. randal 9

    the nats will never eleminate poverty.
    they are not psychologically conditioned for equality.
    how can they be winners if there are no losers?

  10. Hilary 10

    What does 60% of the median actually mean in dollar terms? Probably means most beneficiaries, and superannuitants without other sources of income?

    • Draco T Bastard 10.1

      All beneficiaries are below the poverty line under that definition.

    • Bright Red 10.2

      The median is going to vary with household size. Like I said above, pensioners are paid at just enough to keep them out of poverty – other beneficiaries aren’t so lucky. And then there’s the rest who can’t even get a benefit.

      • Joe Bloggs 10.2.1

        the median is going to vary with household size

        Choke, splutter! WTF?

        A median is described as the numeric value separating the higher half of a sample, a population, or a probability distribution, from the lower half. It’s the mid-point of the population when the population is ordered. The median doesn’t vary with household size, Einstein.

        • Colonial Viper 10.2.1.1

          I suspect BR meant that where a household is likely to fall with regards to the median is going to vary with the size of the household.

          • Joe Bloggs 10.2.1.1.1

            are you channeling BR now???

            • Lanthanide 10.2.1.1.1.1

              No, just applying some common sense to what BR wrote and assuming that he isn’t an ignoramus, as you have, so deducing what he actually meant to say.

              captcha: teeths – one of my favourite words

    • OleOlebiscuitBarrell 10.3

      About $37k (but I am shit at maths and could be wrong).

      • Colonial Viper 10.3.1

        I thought Stats NZ said on Oct 7 that median income for *all* NZ’ers from *all sources* had fallen to $529 p.w.

        That’s roughly $27,500 p.a.

        60% of that figure is $317 p.w. Which is about $100 p.w. more than the dole.

        NB talking about NZ’ers as individuals here, not as household units…

        • OleOlebiscuitBarrell 10.3.1.1

          I was doing households, because of this:

          the usual measure internationally is that households with incomes below 60% of the median are in poverty [emphasis mine].

  11. tsmithfield 11

    Financial poverty need not lead to negative social outcomes. There are plenty of rags to riches exemplars, so poverty need not doom people to a life of suffering.

    In my opinion poverty in monetary wealth is a symptom of much deeper levels of poverty that need to be solved. This includes things such as poverty in self-belief and attitude. Once these sorts of problems are solved then the monetary wealth problem will solve itself.

    Simply giving people more money won’t solve poverty. As has been observed before, if all the money in the world was distributed equally, it wouldn’t be long before it was back in the hands of those who had it in the first place. That is why we need to look much deeper at societal problems rather than focus on the financial poverty symptom.

    • mcflock 11.1

      Ts, learn the difference between a logically necessary consequence and a likely contributor.

      You might find a lot of rags to riches stories, but there are billions of rags to rags to paupers grave stories.

    • RedLogix 11.2

      Simply giving people more money won’t solve poverty.

      True, but a society that is structured to ensure that most of the wealth remains in the hands of a tiny elite won’t solve poverty either.

      As has been observed before, if all the money in the world was distributed equally, it wouldn’t be long before it was back in the hands of those who had it in the first place.

      No-one is arguing for absolute equality, there always will remain differences between people…but nothing can justify the obscenely vast disparities we see in the world today. What we’re asking for is some moderation in these extremes; way short of the strawman equality you have constructed.

      Besides, if you DID hypothetically redistribute all wealth equally, AND did nothing about the premises, structures and institutions of neo-liberal, unmoderated capitalism….then of course the old disparities would soon reassert themselves.

      That is why we need to look much deeper at societal problems rather than focus on the financial poverty symptom.

      That’s fairly close to my own view. There is a mutual interdependence between the individual and the society they live in. In that sense I understand where you are coming from. At the same time (that’s not a ‘but’) we are a mass of highly diverse individuals. Our values, ideals and moral capacity range from one extreme to another…. the efforts of one high-minded person to make the kind of positive difference you are thinking of, is so readily cancelled out by the greed, vapidity and vacousness of others less motivated. Entropy is steeply biased in the direction of Shiva, destruction can undo in moments the creativity and nuturing of decades.

      As isolated individuals our capacity to effect constructive change is limited.

      Permanent, transformative change is the result of a few capable, mature people who can harness the power of the many to act in unity towards a goal. It’s called inspired leadership… something we’ve rather forgotten about. The crucial element is of course the notion of ‘being better people’ , which I am sure is what you are have in mind ts….but manifest in some concrete cause that a critical mass of people can embrace and implement.

      Examine all the positive, reformist changes that have taken place in our history, how each one of them has been a long struggle against reactionary forces who mounted any and all conceivable arguments to avoid changes that later generations come to regard as both commonsense and inevitable. Which side of this age-old debate are you on ts?

    • AndrewK 11.3

      “Simply giving people more money won’t solve poverty. As has been observed before, if all the money in the world was distributed equally, it wouldn’t be long before it was back in the hands of those who had it in the first place. That is why we need to look much deeper at societal problems rather than focus on the financial poverty symptom.”

      This is the real problem underpinning the current global financial ‘crisis’; the wealthy have become so far removed from economic reality – largely as a consequence of multi-generational affluence- they have regurgitated an economic paradigm that, in the past, has been the catalyst for massive social upheaval.

      Financial capitalism, as a means of social organisation, only works if financial capital (money) is freely recycled through the system. Henry Ford understood this when he began offering workers $5 a day – the people who built his cars could actually afford to buy them. The contemporary wealthy, on the other hand, seem to struggle under the delusion that the preponderance of capital can be concentrated in the hands of a privileged few and, somehow, the vast majority of the population can – through alchemy or sheer power of will – conjure new capital out of thin air.

      Quite simply, humanity cannot afford to maintain the delusional arrogance of a wealthy elite minority. It’s not a matter of ideology, it is plain old reality. The planet, its population and environment are a closed system – there are not the infinite resources required to fuel the perpetual growth that modern financial capitalism demands.

      I believe I will live to witness these rich pricks paying for the crimes they have committed against the people of this country. The class war only ends when it is no longer required. And, even though I think the campaign to support the actors was a massive PR disaster for the unions, my hate remains pure.

      • Bored 11.3.1

        Just read the whole thread, and you strike a chord. I said earlier that the era between the war and 1972 (Keynesian social concensus) was destroyed by the wealthy purposely. Reading the thread nobody gives the prior era a thought: I find it disturbing that that era whilst not perfect is never used as a mirror to challenge the assertions of neo libs that “there is no alternative”. It is the most obvious challenge to the feeble minded ideology of laissez faire. Instead we dance frustrated before the edifice of rationalism and mutter in economic gobbledigook.

        I dont propose return to Keynes, and we no longer can go back to that era. Like yourself I believe our failure to challenge the rule of finance and the wealthy has taken us to a position where the score can no longer be settled amicably, the “haves” are down the same track that lead to the events of 1794.

        • Carol 11.3.1.1

          I have just looked through this thread, although not read everything. (It’s turning into a book-sized thread).

          It seems to me, the idea of “true” freemarket capitalism being advocated by some, includes an idea of “actors”. This seems to treat a big wealthy and powerful corporation as an “actor”, and a poor, relatively powerless, low-paid or unemployed individual as an “actor”. And the actions of all these actors are treated as having an equal contribution to the market mechanism that is supposed, in the freemarket theory, to deliver the best possible results for all. Or have I missed something?

          So then it seems freemarketeers want to remove any government intervention that might (if the government is relatively democratic) counter the unequal power relations? But surely that freemarket of “actors” delivers most power and control to the corporate “actors”?

  12. jbanks 12

    The base assumption here that poverty causes crime is erroneous. The factors which lead to poverty also lead to crime.

  13. Lazy Susan 13

    All this talk about “rational” markets is crazy talk. Markets run on fear and greed. We lurch from one asset price bubble to another aided and abetted by a fractional reserve banking system that lines the pockets of the private banks.

    The unregulated free market of the last 25 years has produced a highly unstable and overleveraged financial system which has benefiitted the few at the expense of the many.

    One “actor” that seems to be left out of the arguements is what I would call the collective good. That should be represented by democratically elected governements. Unfortunateley they have been hijacked by the wealthy and powerful “actors”. With the assistance of the MSM spin they continue to act in a way that benefits the wealthy and the powerful rather than the collective good.

    The fact that the notion of a $15 minimum wage is challenged while the so-called “captains of industry” continue to increase their slice of the pie, and get large tax cuts, is an obscenity. It’s a timely reminder of just how corrosive and destructive the neo-liberal agenda has been upon the fabric of our society.

    • Colonial Viper 13.1

      One “actor” that seems to be left out of the arguements is what I would call the collective good.

      That’s because the Chicago School theory of Homo Economicus deliberately uses a very narrow definition of what they call ‘rational’ economic behaviour which allows them to develop their theories.

      An economically rational actor is simply described as one who uses the freedom of choice in the marketplace to make decisions which provide maximum financial and functional utility to the individual at minimum cost.

      Consideration of values/principles/morals/collective-community-environmental-good: is all beside the point and irrelevant.

      This clearly shows that by definition, being ‘economically rational’ in economic theory is completely different from being ‘rational’ as we understand it in the real world.

      Where the neo-con freemarket types have really tripped up is that they are only realising now that what is a rational decision for an individual actor (e.g. a CEO) is not always going to be the same as what would be a rational decision for an organisation (e.g. the corporate that CEO is in charge of).

      This leads to the situation where the CEO takes ‘kamikaze’ decisions which eventually ends up with the company destroyed, but as an individual the individual gets to walk away with a maximum of bonuses and payouts.

      Richard Fuld of Lehman Bros springs to mind. US$484M in pay and bonuses in the last 10 years, he has kept every dollar of it, but destroyed one of the US’ largest investment banks, and tens of thousands of jobs and lives, in the process.

      Whoops.

  14. Vicky32 14

    @ Jeremy Harris : “isn’t a individual”
    A individual? I suppose that’s the private school education again…

    • Jeremy Harris 14.1

      Vicky if you’re expecting a spell checked post, with perfect punctuation, written in iambic pentameter on a blog I think you are going to be sorely let down…

      But if pathetic little digs make you feel better and you believe they prove some kind of point, more power to you…

      • Vicky32 14.1.1

        No, I simply think you ought to be a bit more careful, after having boasted about your pricey education! Otherwise you wind up looking a bit of a prat…
        Plus, I am the Pedant Queen, on a one woman crusade to improve grammar and spelling wherever I find errors – and last but not least, I want to show not tell, we ‘handout parasites’ are not the morons the RWNJs assume.
        Deb

        • The Baron 14.1.1.1

          Spose you have a lot of time on your hands huh – I mean, no job and all.

          And before you jump on your high horse, how is me saying that any different from you criticising him on his education?

          • Vicky32 14.1.1.1.1

            Yes, I do have too much time on my hands – I just need you to realise that’s not by choice! I feel that because he made such a big deal about his education being special and private and better than that available to we plebs ‘n’all, that he ought to be more careful in his language use. Writing in Word and copying and pasting is a pretty good idea (provided you change the default spell/grammar check from American to NZ English) and I ought to do it myself, because of frequent connection problems…

            • Jeremy Harris 14.1.1.1.1.1

              Vicky, go and read that thread, I never even claimed my education was superior to a state school’s… I went to a religious school so wasted lots of time everyday, on religious studies etc…

              What I had a problem with was my parents having to pay twice, they valued what they thought was a superior education so much, they keep sending my brother and I there before, during and after the process when they lost our house, in fact I believe it contributed to it… My father’s company barely scrapped by for 12 years, he’s successful now but I didn’t grow up with a silver spoon in my mouth, it wouldn’t enter my brain to refer to anyone else as “plebs”…

              • Descendant Of Smith

                Yeah but they didn’t have to pay twice as you put it. They only had to pay once.

                They chose to pay twice.

                So in your rational choice world were they rational to pay for a private education when it doesn’t seem it was better and it put them under financial pressure – or were they behaving like most parents do with an emotional based response to try and want the best for their children and thought that was one way of doing this.

                The reality is humans are not rational and in fact emotion is an essential part of decision making without which we cannot function.

                In the US it is well known that the marketing behind Humvees etc was carried out by a psychologist who designed a program based around primal fear. It was particularly timely after 9/11. People who walked into car yards with no intention of buying such a vehicle came out with one and still couldn’t explain why they bought it.

                In NZ we saw lots of people who had spent years paying off the mortgage, nearing retirement, mortgage their houses again to invest in high risk investments. What turned these people from hard working sensible NZ citizens to risky investors – fear and greed. Some of them ran successful businesses for years and today can’t believe that they got sucked in to investing – their business acumen vanished as their fears of old age and no income were preyed upon.

                Try reading something like Descarte’s Error to get an insight as to how the brain actually functions.

              • Jeremy Harris

                They quite clearly paid twice, once through taxes and once again privately…

                Their paying for my brother and I saved the tax payer the cost of two children’s educations that otherwise would have had to have been paid… It really is very simple and there is no good reason why they should have been rebated the tax money they paid into the government accounts that would have been spent on my and my brother’s state education…

                Free markets and rational choices rely on the market being free, quite clearly education with competing state and private schools is not a free market, so yes people aren’t going to be able to make rational decisions and more’s the pity…

                A free market isn’t about perfect decision either, that is the fallacy that seems to come up most often from socialists…

                • Descendant Of Smith

                  Education is not a market and state schools don’t and shouldn’t compete with private schools,

                  Education used to be the privilege of the wealthy and the religious ( in the sense of at least literacy and numeracy). They always paid their own way.

                  State education was used to lift the educational levels of the non-wealthy – the working class and the poor.

                  It’s what allowed people like your parents – who one assumes from your comments weren’t born into wealth to be educated.

                  State Housing almost completely removed slum landlords – Sydney is a really good example of this.

                  These things don’t happen as a result of free markets. Never have and never will.

                • Lazy Susan

                  We are a democracy and as such have decide collectively to have a state funded education system paid for by taxes, similarly we have a health system, police force, justice system etc. Your simplistic notion that because you don’t directly “use” something you shouldn’t pay rather tramples over the freedom of a society to chose how it want’s to be organised. It also ignores the fact that you benefit from living in a society that is educated, healthy and civil.

                  • Carol

                    Indeed, LS. I don’t have, nor ever will have, any children. But I am glad my taxes go towards educating children. It is an important long term investment for the country to have a well-educated population. I would prefer that I keep, paying relatively high taxes so that all children can get as good an education as possible, Cutting my taxes and putting less money into the children (and many other things that make society a better one to live in), is not OK by me.

  15. KJT 15

    All the advocates of “free markets” still want to restrict the freedoms of workers and all want us to pay for police to protect “their” property. Bit of cognitive dissonance there.

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