economy

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A real alternative

Written By: IrishBill - Date published: 5:15 pm, December 24th, 2008 - 21 comments

One of Bruce Jesson’s constant bugbears during the New Right revolution of the 80’s and 90’s was that the Left allowed itself to be positioned as conservative. That we were simply fighting for the status quo rather than providing a proper progressive alternative to the imported market ideology that was being foist upon us. He […]

The recession, graphically

Written By: Steve Pierson - Date published: 12:22 pm, December 23rd, 2008 - 42 comments

OK, one last graph for the year. The latest GDP data isn’t pretty, a 0.4% contraction of the economy in the September quarter. It’s the third quarter of contraction in a row driven by the drought, oil prices, and the credit crunch. The ongoing international financial turmoil means we are likely to continue in recession […]

Granny’s advice – spend up dearies

Written By: Steve Pierson - Date published: 3:56 pm, December 20th, 2008 - 27 comments

Economics 101: if you consume more than you produce, your standard of living is unsustainable and, unless you fix the situation, it will eventually come tumbling down. As a country we import more than we export equivalent to 8% of our annual domestic production. The current account deficit is projected to widen to 9.4% of GDP next […]

Partial credit

Written By: Steve Pierson - Date published: 11:36 am, December 19th, 2008 - 29 comments

Yay, more infrastructure spending during a recession. That’s the right thing to do – stimulate the economy and spend while the price of construction is lower. But why, oh why, cancel spending on rail and housing insulation and put the money into roads, instead? The only reason I can think of is that National/ACT doesn’t […]

Good one Bill II

Written By: IrishBill - Date published: 8:19 am, December 19th, 2008 - 35 comments

It’s good to see Bill English acknowledge the last government has left New Zealand in a good position to face the economic crisis. The only shame is that he’s using that position to throw money at people who are more likely to pay down debt and increase savings than engage in stimulatory spending.

It’s bad, what to do?

Written By: Steve Pierson - Date published: 1:27 pm, December 18th, 2008 - 48 comments

The latest Treasury economic forecasts are out and, in a continuing pattern, they not only make worse reading than the previous updates but they are already out of date. We are now looking at gross government debt rising from less to 20% to 30% or as much as 40% by 2013. Unemployment could rise above […]

Rod Oram: The global crisis is real

Written By: Dancer - Date published: 11:47 am, December 15th, 2008 - 5 comments

As usual an insightful analysis from Rod Oram on the need for our political and business sector leaders to better come to grips with what the international economic situation means domestically. He says: Every sector of this economy has its own set of structural challenges forced on it by global conditions. Yet, we’re hearing nothing […]

Cui bono?

Written By: Steve Pierson - Date published: 11:32 am, December 15th, 2008 - 16 comments

I’m no lover of the car industry but it’s interesting to see why the effort to put together a bailout for US carmakers has failed. Seems the Repubicans couldn’t face the horror of a 14 billion dollar payout, which is chump change compared to the welfare Wall St has gorged itself on, with far less […]

Guest post: those Euro bright sparks follow us

Written By: Guest post - Date published: 10:45 am, December 10th, 2008 - 10 comments

Have you heard the sad news that the EU may be next to join the international communist nanny-state conspiracy against incandescent bulbs? It seems EU bureaucrats have published a “report” which calls for a ban on the freedom-loving inefficient bulbs which have kept our planet warm for almost 130 years. Thank goodness ordinary decent New […]

Unambitious

Written By: Steve Pierson - Date published: 10:15 am, December 8th, 2008 - 89 comments

National/ACT has cancelled the Buy New Zealand Made programme. So, this is that ambitious and positive vision for New Zealand we’ve been hearing so much about?

What to do with Treasury

Written By: Tane - Date published: 2:28 pm, December 5th, 2008 - 38 comments

It’s good to see Treasury’s extreme right-wing prescription for New Zealand has not been wholly embraced by the National Party – and it’s easy to see why. While Bill English (a former Treasury wonk himself) no doubt agrees with the policy ideas and direction outlined by Treasury, he has the disadvantage of being accountable to […]

Treasury – Labour left us in good shape

Written By: Eddie - Date published: 12:23 pm, December 5th, 2008 - 17 comments

Treasury’s briefing to Bill English as the new Minister of Finance must’ve pissed him off big time. Aside from the expected ideological burp (already covered in depth by No Right Turn) it reads like a long list of Labour achievements and calls on National is reign in its irresponsible promises. Here’s a taste of some […]

Slash and pray

Written By: Steve Pierson - Date published: 10:05 am, December 4th, 2008 - 14 comments

The Reserve Bank has cut 1.5% off the official cash rate, bringing it down to 5%. The rate has now been cut 2.5% in just six weeks, an unprecendented slashing. Mortgage rates will drop as well, but perhaps not by as much because the banks (excluding Kiwibank) have to borrow most of their money from […]

A plea to National

Written By: Steve Pierson - Date published: 10:47 am, November 27th, 2008 - 92 comments

Don’t let Key go abroad representing us again until he has had some diplomacy training. I can’t believe, I literally can’t believe, the comments he has made in the UK. In addition to the comments yesterday, where he called the new carbon-offset airport departure tax “protectionism” and said it will lead to a “contagion effect”, […]

Small-target governing

Written By: IrishBill - Date published: 8:01 am, November 27th, 2008 - 28 comments

Yesterday it was a $7bn rescue package. Today it’s preparing a contingency plan to bail out big business. But do we get details? Of course not. I’ve got a bad feeling deep in the pit of my stomach that there’s no real plan here, or if there is it’s one that the public wouldn’t like […]

PPPs? No, please

Written By: Steve Pierson - Date published: 12:15 pm, November 26th, 2008 - 24 comments

I’ve never seen the sense in Public-Private Partnerships. How is it ever going to be cheaper to get a private profit-making company to come on-board and take the risk for developing a piece of public infrastructure? The Government has to give them a good deal so they can make a profit, and the Government has […]

The departed

Written By: Steve Pierson - Date published: 10:52 am, November 26th, 2008 - 56 comments

The UK has announced plans to increase departure tax from its airports for flights outside Europe to pay for offsetting their carbon emissions. This is part of the worldwide response to climate change – countries are making emitters pay and even aviation, which is excluded from Kyoto, is now being targeted (quite rightly too, it […]

Free trade no answer to credit crisis, part 2

Written By: Steve Pierson - Date published: 8:34 pm, November 25th, 2008 - 12 comments

I’m a bit concerned to see people welcoming APEC’s commitment to re-igniting the Doha Round of free trade talks as if they are a solution to the economic mess we are in now. I’ve already noted that more free trade, while desirable if done fairly, will not fix the problems that have lead to this […]

Free trade no answer to credit crisis

Written By: Steve Pierson - Date published: 10:41 am, November 24th, 2008 - 13 comments

Free trade is basically a good idea. We live on a world of limited resources, we should use those resources as efficiently and sustainability as possible. Trade barriers that distort the costs of production in different countries undermine the efficiency of resource use. Ideally, we wouldn’t have them – but we would also need consistent […]

Time for Keynes’ real ideas

Written By: Steve Pierson - Date published: 6:03 am, November 23rd, 2008 - 19 comments

The article below is well worth a read for anyone concerned about the global economic crisis. It looks at Keynes plan for managing the balance of international trade. It is imbalances in the system that we have now that leads to economic crises and fuels the speculative markets, especially the currency traders. It is the […]

Key’s first test – fail

Written By: Steve Pierson - Date published: 7:34 pm, November 22nd, 2008 - 44 comments

Well, John Key took my advice and gave a speech at APEC different from the pro forma MFAT-written speech that might have been expected. Unfortunately, it’s still all style and no substance, all bark but no bite. Key is scathing of his fellow money-men for taking on more and more risk; he accuses them of […]

Credit where it’s due

Written By: Steve Pierson - Date published: 12:04 pm, November 19th, 2008 - 30 comments

It’s exam season for high school students. So, for 10 points explain how the following statement (in the ACT-National agreement and repeated uncritically by the media) can be true, closing the income gap with Australia by 2025… will require a sustained lift in New Zealand’s productivity growth to 3 per cent a year. given: – […]

Time for a Green New Deal

Written By: Steve Pierson - Date published: 6:46 pm, November 15th, 2008 - 34 comments

With a masterful awareness of the import of his actions, President Roosevelt termed his economic program to lift the US out of the Great Depression ‘the New Deal’. Laissez-faire capitalism, whereby the ‘invisible hand of the market’ ruled, had failed to fulfil the conditions of the social contract (a fair distribution of wealth between capital […]

Stimulating

Written By: IrishBill - Date published: 2:25 pm, November 14th, 2008 - 50 comments

One of the things I like about being left wing is how often the best moral decision is also the best economic decision. Take economic stimulus for example. In a recession it’s the most vulnerable such as beneficiaries, low paid workers and youth that are hit worst because they are the ones least likely to […]

The first test

Written By: Steve Pierson - Date published: 2:55 pm, November 13th, 2008 - 192 comments

Michael Cullen has released the latest economic and fiscal update, the one Key commented on in today’s papers but which he refused to reveal the details of to the public. Basically, it’s pretty bad news. How Key is responding or, rather, not responding to this first test is even worse news. Since the Pre-election economic […]

Cuts, three of the same kind

Written By: Steve Pierson - Date published: 10:21 am, November 13th, 2008 - 36 comments

From Stuff: Mr Key said New Zealand had a significant advantage over other countries because official cash rates set by the Reserve Bank were high. “If that weaker scenario is anything like what it could be, then you will see significant rate cuts in New Zealand.” Oh Christ. It was bad enough when he was […]

How to stimulate the economy

Written By: Steve Pierson - Date published: 12:00 pm, November 11th, 2008 - 9 comments

During the debate over the economic stimulus package in the US earlier this year, Moody’s produced a model that shows which stimulus options result in the most increase in GDP per dollar of government spending/tax reduction. I’ve highlighted the three options that are relevant to NZ (the Bush tax cuts are remarkably similar to the […]

More unemployed but more employed too

Written By: Steve Pierson - Date published: 1:08 pm, November 6th, 2008 - 14 comments

Unemployment has risen to 4.2%, the first time in four years it has topped 4%. That’s lower than the experts expected, they thought the rate would blow out to 4.5% or more. But that’s the power of a full employment policy. Because we’ve had such low unemployment for so long, employers are reluctant to lay […]

Economy healthier than expected

Written By: Steve Pierson - Date published: 11:42 am, November 4th, 2008 - 34 comments

The latest government accounts show the economy is in better condition than was expected. Tax take was $500 million higher than expected due to higher-than-expected income tax revenue. That means more money was being earned from wages and salaries than Treasury had forecast; in other words, unemployment is not rising as fast as Treasury had […]

SSTimes finds more $ in the pocket

Written By: Dancer - Date published: 9:15 am, November 2nd, 2008 - 22 comments

From this mornings SSTimes: New research has revealed a dramatic reversal in financial fortunes for the average Kiwi family, which is now $60 better off each week than it was six months ago. Falling mortgage costs teamed with the government’s October 1 tax cuts and a beefed up Working for Families package are the main reasons […]

Standard scoop: Another senior Nat failed to disclose conflicts

Written By: Steve Pierson - Date published: 10:39 am, October 28th, 2008 - 34 comments

Last month, Key lied when he was asked whether he had more Tranzrail shares, over which he had failed to declare his conflict of interest. On Sunday, it was revealed on The Standard that Key had also held shares in Fletcher Challenge Forests, which was campaigning for the Government to buy the rails off Tranzrail, […]