- Date published:
3:33 pm, April 25th, 2020 - 60 comments
Categories: covid-19, Economy, internet, Media, Politics, treasury - Tags: businessdesk, dear sysop, guest post, nzier, stuff, The Spinoff
We put in guest posts and reposts here periodically. The reposts are from where we have generic arrangements with other sites, and we can just put them up. Usually they are on areas that none of our authors have covered or where an alternate view is worth (in the view of a person with editor rights) to discuss.
Guest posts are unsolicited and are either sent directly to authors with editor privilege or go tho the email. That latter’s chance of being published here depend on the person with access to the e-mail (currently just me) having time to process them. Sometimes they get overtaken by events. Sometimes they simply don’t pass a very criteria.
I’ve often thought that I should start doing some training on why I’d reject something. So I’ve started with this one that arrived today. Hopefully this will educate this author and other prospective authors how to lift their work up to The Standard.
I’ve left the identifier of the author off. But this is otherwise the full text. And I’ll discuss why this isn’t worth being a guest post under the specific Contribute following guidelines (my italics):
Labour’s response to Covid 19 has been exceptional. That the great majority of New Zealanders should take upon themselves such hardships because asked, extraordinary. But also not extraordinary. We were asked to do what we agreed was the reasonable thing to do.
Labour’s response to the financial situation caused by Covid 19 is poor in comparison. This is not a criticism of the measures taken. But rather of the opacity that surrounds the financial situation compared with the transparency indicative of the Covid 19 response.
We do not know for example what it means for the government to borrow billions. Is this debt printed by the reserve bank and able to be forgiven? Is it debt borrowed from Australian banks, borrowed from American banks, printed by their Fed? Certainly moneys put into an economy need to be taken out of it to control inflation. But we are not taught this. Nor therefore a role of tax, or a role of paying down public debt.
How can the people be expected to behave in a financially cogent manner, similar to the manner they have behaved towards lock-down, when we can’t agree with what the government are doing because we don’t understand the reasons for it. And how can we trust the government when we suspect financial obscurity is retained for the purposes of controlling the population sans their reasoned consent?
Ok at the face of it, this is a fair enough argument and clearly written.
I personally don’t know the answers to the points raised myself. And I’m kind of over-educated in that I have two degrees particularly relevant. Nor are a pile of completed and uncompleted graduate and undergraduate papers in diverse topics. But this is a question of public and economic policy that isn’t something that I have more than a vague theoretical knowledge acquired from 35 years ago.
It was covered briefly in the MBA back in 1985. But I mostly remember that part of the courses as being horrified at the morass of debt we’d got sunk into as a nation by the National government under Muldoon. And the focus of a MBA is about business rather than public or economic policy. I’m reminded of this whenever I see any businessman trying to do public policy. They are invariably appalling at the basic job because the skills, timescales and attitudes required are so different.
However I’m pretty much a generalist. So when I take the time from my other tasks to put up guest posts, I will do some basic checks to see if the author took time to understand their topic and have their facts correct. This reduces the amount of time moderators have to expend to staunch with the blood flow as commenters deal with bad arguments by authors.
I started by typing “nz govt borrowing for covid-19 response” into google search without any other parameters. The 3rd link in the resulting list was a Spinoff article from last week: “How do we pay for the Covid-19 stimulus package?“.
This is by the NZIER who are accurate on facts. Rough reading time: 2 – 8 minutes depending on how often you start yawning.
How do we pay for it?
Obviously, the government doesn’t just have a spare $12 billion sitting around – but like the rest of us, it can borrow when it wants to spend more than it has. It does this by selling government bonds, called Kiwi Bonds. These are basically little packages of debt which promise to pay a fixed amount of interest, and to repay the borrowed amount after an agreed length of time (with Kiwi Bonds, time frames range from six months to four years). These bonds are considered low risk, because people trust that the government will be able to pay them back in the future. They’re a staple for investors, and you’re likely to have invested in them yourself if you’ve got a KiwiSaver.
Then as they should, they have moved on to the contingencies. After they talked about the downstream effects of the interest rates and the Reserve Bank OCR.
When you’re all out of OCR options and interest rates still threaten to rise, there’s another tool the Reserve Bank can use, and this is the first time we’ve used it here in New Zealand. This time it’s all about stopping the bonds from getting cheaper in the first place, by guaranteeing to buy the bonds wherever they are being held.
Hold up… where does the Reserve Bank get money to buy the bonds?
That’s the clever bit. Conveniently, the Reserve Bank can produce NZ dollars, so it can actually buy the bonds by effectively creating money. As an extra bonus, buying up government bonds held by retail banks puts more money into circulation, so banks are able to lend more. Using new money to buy government bonds is called quantitative easing (QE), and it was a popular tool for the countries worst affected by the 2008 financial crisis.
And they then go on to how this accumulated debt gets projected into the future, why we don’t want to use QE all of the time, and why it needs to be reserved as a capability for real emergencies like great depressions, world wars, and pandemics rather than (as I’d put it) every time we can’t get a societal consensus on how we fix a social issue.
Good article. Clear, factual, and a bit of reminder about why I need to give The Spinoff a donation; next month. I just subscribed to BusinessDesk to get some local business news as the generally decent business news is locked down behind the other trash like Mike the Moron at the NZ Herald.
But a single source talking about a topic isn’t enough.
So I did a cursory scan on the next link from april fools day at Stuff: “Coronavirus: Government doubles borrowing forecast as economy worsens” which said much the same things in the simpler journalist cant. Reading time 1-4 minutes depending on how distracted you get by the damn ads. My italics indicate the only new bit of information that I was really interested in.
The Treasury’s Debt Management Office will now be releasing a plan of how much it plans to borrow an when each month.
It plans to borrow $800 million each week in April.
Despite its plans to borrow more, borrowing costs remain low.
This is in part thanks to the Reserve Bank which has announced that it will purchase Government debt, although it has said it will not be purchasing debt directly from the Government.
The Bank has said it will buy up to $30 billion over the next 12 months.
Ok, so in two links from a general query on google search, I’d found out who was responsible for the managing debt at the government.
A quick search for “treasury debt management office” yields their home page. I did a little read around to look at the different kinds of financial instruments, a couple of upcoming tender announcements, and the results.
Now if I look back at the potential guest post…
… But rather of the opacity that surrounds the financial situation compared with the transparency indicative of the Covid 19 response. We do not know for example what it means for the government to borrow billions.
That is clearly a false fact. The information is easily available on the net if someone looked for it.
That NZIER article at Spinoff was damn near perfect and fully visible in the public sphere. The general news article at Stuff provided the information about the direct organisation was responsible for managing the debt. That had fully transparent information about the mechanics.
There was no opacity in the public domain about either what the level of debt was, how it was being financed, how it was being managed, and ultimately how it was going to be paid back. I found all of this out in less than 10 minutes sitting at my desk. It took me far far longer to write this post.
I was forced to conclude that the author of this potential post was just someone who didn’t look for the information or possibly had a reason that they didn’t want to look for it. If it was the latter, then I’m not going to speculate on the reasons for that. I’d suggest commenters don’t inside my post either.
I really did find the inherent assumption in the post rather offensive when it said in the final lines..
And how can we trust the government when we suspect financial obscurity is retained for the purposes of controlling the population sans their reasoned consent?
I’d suggest that author can take me and most commenters on this site out of the ‘we’ in his final words. The author wrote their own opinion. The presumption of trying to make out that I was also being a lazy willfully ignorant conspiracy addled fool like the author quite offensive. A point to note when you’re writing a post is to always make it blindingly clear what is your own opinion and to not presume to speak for others unless you are in fact a spokesperson for a group.
Similarly where the author says “But we are not taught this” then that is also just weird. It implies that we should be educated on things that are possible to look up. Sure there probably should be more emphasis on what could be described as ‘civics’ in schools. But I hardly think that is likely to drop down to the layer of talking about the process of debt formation by government.
In the days of yore we had the libraries which we got taught about. And these days the internet which, while it allows false fact trash to propagate, also allows valid information to be dug out with minimal effort. You mostly need to know how to search and read.
Education is mostly about being taught to allow people on how to dig out information to make their own assessments and opinions. Mindlessly expecting someone else to do the work for them is just the epitome of of a gullible fool just waiting to be skimmed by a con artist – like Trump.
Expecting to be spoon fed current information is something that, in my opinion, can sometimes accept from children. But personally I’m usually more interested in getting even them to hop on their devices and looking it up than telling them how to think.
There are always gaps in everyone’s knowledge. I tend to feel them rather acutely myself every time I sit down to write code or blog posts. But the basic information about our government these days is largely published in public. Where it isn’t, there are tools like the Official Information Act available to dig them out.
I’d tend to agree that often some the open media are pretty dire at explaining even mildly complicated things very well. But when you want to write something for The Standard then it pays to use one of the open forums like our OpenMike to test your idea first. Otherwise the hordes of commenter tend to be pretty cruel to authors at exposing just how much they don’t understand. But this post would have been an excellent comment. The author would have been ‘educated’ while also raising an interesting topic for discussion.
And almost anyone else would be kinder than my nature allows me to be when forced to use up my valuable time. I know that I’m a harsh teacher. But I prefer working that way when educating because it reduces my time in that role. Most people, while learning fast, will also find my process of training people to think rather than leaning on me to be rather exhausting and probably somewhat demeaning. I really don’t care that much if that is their impression.
I was trained by the army and by private business in how to teach rapidly and clearly. That has been heavily honed by moderating trolls on this site and its predecessors on the net. I like facts to be accurate and at least supportable with a quick search on the net, opinions to be clearly stated as opinions, and that anyone putting up a proposition to be in a position to defend it (even if they modify it in the face of robust debate).
I don’t require that I like the argument or the opinion. But if I take the responsibility to put a guest post, then I require that I can defend the decision to do so. This post didn’t rise anywhere close to those requirements apart from having a topic worth looking at.
Now moving on.. While I have rather eviscerated this author, is there any substantive commentary on the technique of pre-processing guest posts?
And while, in my opinion, this guest post wasn’t worth putting up, the topic raised was. Has anyone else got some other points links or links about the debt, its sources, process, and eventual repayment?
There are other specific sources of information that are behind paywalls. Like a paywalled article “Finance Minister quashes idea of RBNZ buying bonds directly from government” that refers to Robertson’s answer at a presser yesterday. If I dug around inside paywalls, then I’d expect to find more information. However for the purposes of this post, we’ll follow the usual practice of requiring linked sources and authorities to be open public sources.
Updated post with the comment about NZIER removed. I was confused them with NZ Initiative.