Economic Management

Written By: - Date published: 11:30 am, July 13th, 2011 - 34 comments
Categories: Economy, labour, national, unemployment - Tags:

We can expect a lot of economic rhetoric in the lead up to November from our political leaders. What does history suggest with respect to two key economic indicators: production and employment?

If past performance is anything to go by we can expect either a National or Labour lead government to be associated with gradual increases in the actual amount of goods and services produced (green line) in the years to come.

At the same we can expect increasing unemployment (black line) under National and decreasing unemployment under Labour. The recent facts speak for themselves.

Sources: Reserve Bank

34 comments on “Economic Management”

  1. randal 1

    well National is supposed to be the party of business so where is the new business?

    • Colonial Viper 1.1

      yeah its the party of Big Corporate Business. Big difference there. Pity is, a lot of small contractors and small business people haven’t cottoned on to that fact.

      Small business always do better under Labour because people have spending money in their pockets.

      • Georgecom 1.1.1

        Have a look at the document below, pages 48 & 49. The charts show 2 things, since the neo-liberal experiment was initiated in NZ (1) wages have failed to keep up with productivity growth and (2) the share of gdp for labour has shrunk from 55% to 45% and for capital increased from 35% to 45%.
        http://union.org.nz/sites/union.org.nz/files/NZCTU%20Alternative%20Economic20Strategy_1.pdf

        So, next time you hear a neo-liberal moaning about productivity needing to increase before wages can rise or complaining about business needing a tax cut in order to create more jobs, ask them where that large wealth transfer has been spent. You shouldn’t have to wait very long for the opportunity.

        Maybe a question for Don Brash? If things are so dire for business and productivity Don, where WAS all the wealth transfer spent?

  2. I found out a couple of days ago why English was borrowing more than was required. Apparently there is a over 6 billion payment required on 9 November 2011. Is this unprecedented that so much money has been borrowed to pay back a due loan?

    We live in times where other people’s money makes the world go round and without being able to borrow a country’s economy collapses. The problem is how to repay the loan for the loan back. Italy and Spain are about to collapse just as Greece and Ireland have. Another global recession to follow looks to be evident.

  3. At the same we can expect increasing unemployment (black line) under National and decreasing unemployment under Labour. The recent facts speak for themselves.

    Are you referring to the (limited) data shown on the graph. I presume it shows the effects of things like the dot com boom and bust, the recession that began towards the end of Labour’s reign and also possibly the Christchurch earthquake. It doesn’t show the recent improvement in unemployment figures?

    Or do you mean some other facts?

    • vanakast 3.1

      Don’t let facts and reality get in the way of their fantasies and ignorance. Oh yes there was a little recession starting at the end of Labour’s term which was exacerbated by Labour’s poor handling of the economy, let’s just forget that shall we?

      The lefties know about as much about economics as creationists know about evolution.

      • Colonial Viper 3.1.1

        lol still speaking up for your Money Masters mate? You know, working for the top 5% of wealth in this country while you work against your family members, children, and neighbours?

        Be proud of yourself buddy.

      • Peter 3.1.2

        With massive debt reduction, minimal unemployment and economic growth how was the economy handled badly?

    • Vicky32 3.2

      It doesn’t show the recent improvement in unemployment figures?

      What recent improvement would that be then?

  4. Herodotus 4

    To apply reponsibilty as the graph does from the moment of an election is superficial. As any new govts budget is not announced for 6+ months post the election and the impact on the economy would be at the earliest 1 yr after. The causation = effects is delayed.

    • Lanthanide 4.1

      Offset the vertical lines 6-9 months to the right, then. Doesn’t really help National look any better because the trend under them is for hugely increased unemployment. Small fiddling around the edges doesn’t change that.

      • Herodotus 4.1.1

        Lan agreed with the sentiments of the post and your comment, just hate how cause/effect are simply aligned, still think 6-9mths is to short time delay. IMO there is 12-18mths before any new govt can be held attributable to what is happening.

  5. higherstandard 5

    What drivel – if you actually believe the Nats of Labour have much of an impact on employment or the economy I suggest you ask your GP to Rx you some antipsychotics.

    • Colonial Viper 5.1

      Just ask yourself what impact the governments of South Korea, Japan, China, Iceland and Germany have had on their economies. And on their unemployment stats. Its pretty massive.

      In NZ we still tack along with hands off neoliberalism and free markets, so no wonder we are going sideways and have been for decades.

  6. Afewknowthetruth 6

    GDP measures the rate at which society converts finite resources into waste, and measures the rate at which humans are rendering the Earth uninhabitable via CO2 emissions.

    Higher GDP =faster conversion of finite resources into waste and an uninhabitable planet a bit earlier.

    Anyone who advocates growth of GDP has a very sick mind or is completely insane.

    That is especially true if they have chilkdren or grandchildren, since they are the ones who are going to pay the horrendous price for the lunacy that has chanracterised western societies for many decades.

    Fortunately we won’t have to put up with the lunacy promoted by economists and politicians for much longer: the oil supply peaked around 5 years ago and the global economic system is rapidly approaching the full implosion stage.

    • Draco T Bastard 6.1

      The default of the PIIGS in the next two to three years should do it.

      hmmm…

      Might have to start agreeing with you about cataclysmic failure of the system around 2015.

      • mik e 6.1.1

        that what indeopendent non bank economists reckon

      • Colonial Viper 6.1.2

        The default of the PIIGS in the next two to three years should do it.

        Damned optimistic aren’t ya? First default might occur in the next 3-4 months.

        Overall though I think the system might struggle on until 2018, 2019, 2020. But a shock like an asteroid hit, disease, major terrorist incident etc. will change all that.

        By the end of 2012 the global system will be extraordinarily sensitive to even minor shocks.

  7. johnm 7

    Hi AFKTT
    As the global economy contracts we will all become poorer, except of course in human resource and sharing and cooperation. The sacrifice has to be shared as a family, that means the rich must accept much less so that poorer people in Aotearoa may cope with difficult times. Giving the people’s wealth away by selling their income and social wage producing assets is criminal. The private enterprise system is a failure. We need a socialist economy(Not communist!!!!!) without serious wealth and income inequality. Those who are able and work hardest will continue to be rewarded the most. All wealth obtained through speculation and asset monopoly must be stopped.Wealth worship must become heresy replaced by citizenship and responsibility to others and your Homeland.That means Surgeons don’t disappear because they’re bribed with more money elsewhere.We should develop a healthy suspicion of very nice persons in fancy suits who have a lot of money but haven’t apparently made any real contribution to human welfare.

    • Colonial Viper 7.1

      We should develop a healthy suspicion of very nice persons in fancy suits who have a lot of money but haven’t apparently made any real contribution to human welfare.

      I tend to agree, but usually it’s the ones who also wear ties who are generally the most dangerous + incompetent faux experts.

  8. Georgy 8

    The National Govt 2011 Budget presented by Bill English, will lead to 170000 jobs – according to John Key.

    • Georgecom 8.1

      Where do we place the decimal point in the figure?

    • mik e 8.2

      John Key knows very well we are heading to a housing construction bubble created by the leaky homes and the Canterbury quake that will make who ever is in power for the next three years look like they.ve pulled of an economic miracle. So borrow and hope Bill is trying to keep inflation down by keeping the dollar high as well stimulating the economy till the election then he will sell down high earning assets to pay cheap loans back and not worry for now where he will find the lost income from those energy companies 17.6% as opposed to the 5.5% the loans are costing
      only about a $300million a year loss to the tax payer.or subsidy to the new owners.

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