Fox to guard the henhouse

Written By: - Date published: 6:46 pm, January 15th, 2009 - 61 comments
Categories: economy - Tags:

The National/Act government has announced its chair for the “job summit” and it’s stock exchange boss Mark Weldon.

I may be missing something but I seem to remember this mess was started by the markets so it seems a bit strange to put someone who runs one in charge of cleaning it up. But after watching/reading/listening to the coverage of the decision I’m getting the feeling I’m the only person who thinks so.

Mind you, we did elect a currency speculator as a Prime Minister knowing the speculation-led recession was coming. Is there some punchline I’m just not privy to?

61 comments on “Fox to guard the henhouse”

  1. Probably something like after crapping in your own nest, try the same thing again elsewhere?

    Public service golden parachutes?

    Whatever?

    I suspect what we will see is a lot of smoke and mirrors and bugger all else. Perhaps it needs a better slogan than Jobs summit?

  2. vto 2

    I agree lprent, lots of smoke and bluster. Re Weldon and Key after their respective careers imo at least they have a deep understanding of the business world and that can only help. Do you think Weldon is about to make suggestions that would line his own pockets or those of the NZX or something? If so I think that is a litle naive. Anyway, better than ex-school teachers and unionists etc for such a role, as always happenned before (get them to chair summits on education and the like where their expertise is).

    But yes it will all be about politics and good headlines etc and little concrete substance. As always…

  3. Johnty Rhodes 3

    Actually I have faith in what they will do. I base this on the premise that Key is not a real politician in the way others before were, Clark, Bolger, Lange etc. He is a businessman so is Weldon.

    These 2 guys will walk the walk more as they will not be after consensus and IMHO they will sack useless SOE chiefs, not threaten them.

    Also, more prople will feel more secure with Key leading the ship, rather than a Labour/Green Govt.

  4. IrishBill 4

    vto, Key’s “business” experience has nothing to do with production or with jobs. It has had a lot to do with the absurd game of liar’s poker that got us to recession in the first place. Weldon is the boss of a medium sized company dealing in abstract financial products that frequently have no bearing on reality.

    In fact all I’ve ever heard from Weldon are claims the market is doing better than it is and an expressed desire (pre-crash) to see our public assets floated. That would’ve been a good idea, eh?

  5. Felix 5

    The guy is a tool.

    At the press conference today he said he wanted to hear from the people “at the sharp end of the NZ economy, the employers and businesses”.

    Apparently workers and families aren’t at the “sharp end” of the economy.

    He went on to describe, without a trace of irony, “the banks, the CEOs” as “the coal face of the NZ economy”. Nuff said.

  6. we know what this fool thinks we need to do. He and that plonker David Skilling released their formula for enriching the wealth by taking more wealth of the rest during the recession – they called it a recovery plan, tax cuts for the rich etc

  7. Peter Burns 7

    Red fox cyberpunk maximum alert; anybody spotted that “plonker” d4j?
    The rooster crows, as the hens go madder. Wonder if the sisterhood can land a bomber on the henhouse roof? Over and out.

  8. vto 8

    irishbill, nobody gets to make tens of millions without understanding the worlds of money, business and people. And as for liars poker that has led to recession – get real. This recession has come about due to the very nature of some human habits – those such as greed, fear and speculation. They are inherent in people. It merely manifested itself in the ‘markets’. If those markets hadn’t existed then those human traits would have turned to sores elsewhere.

    In fact, you should turn some of that vitriol that gets extended to types like Key and Weldon towards all those folk who greedily chased an extra 2% per annum from finance companies and then panicked in fear when they finally understood the risk and caused the vast majority of NZ’s own economic attitude meltdown.

    And you describe the structure that enables investment in NZ businesses as ‘abstract financial products’? It is no wonder the left gets labelled daft sometimes.

  9. vto 9

    Having said that, if what Felix said Weldon said is right then he is perhaps a less than smart choice as that appears to be poor politictalk. And what does he mean by ‘sharp end’?

    The big boys of the economy cannot do anything to make the punters get economically active, although this is a common misconception of some in business imo. The sharp end could just as easily be the massive bulk of the economy i.e. me and my neighbour as we go about our daily biz and buy some milk and a paper in the a.m. and then tootle off to work (or not!).

    I’m sure Weldon has some skills but he does come across as a plonker sometimes.

  10. Carlos 10

    vto claims “This recession has come about due to the very nature of some human habits – those such as greed, fear and speculation.” If this is so, that’s why we need controls, checks and balances by public services that are neither greedy, fearful nor speculative. It was because oversite had become lax or non-existent in the neocon US, that the toxic assets were able to infect the market.
    But as “control” is a dirty word to Kiwi free marketeers too, “Fox to guard the henhouse” fits the situation perfectly.

  11. Pascal's bookie 11

    vto, real cheap and short book you might find interesting:

    “The Economics of Innocent Fraud” by J.K. Galbraith.

    It’s nice and quick, (my pocket penguin edition clocks in at 53 pages) and he debunks a slew of the many myths that we all cherish about our current system. Essentially he argues that the modern capitalist system has been captured by managers in the private bureaucracies of our corporations (which share all the faults of our public bureaucracies, with none of the oversight from those to whom they are supposed to be responsible). Share markets that we tell ourselves are about raising funds for industry, do not actually behave that way anymore. It’s b’crats all the way up. Shareholders, the supposed owners, hardly get a look in.

    Witness any AGM where the institutional investors side with the board over the small investors every time. Those institutions? Who decides how they vote ? The teachers and cops putting their 20 bucks a week into a unit trust? Nope, more bureaucrats.

  12. Quoth the Raven 12

    Quite right Pascal. vto you might be interested in this discussion at Cato Unbound:When Corporations Hate Markets. And it’s absolutley free to read.

  13. killinginthenameof 13

    Cut the crap, so far they have had a meeting in which they decided to have a bigger meeting. Can you imagine the shit that would be flying (led by DPF no doubt) if this had been labour? isnt all this carry on all just red tape and beuracracy??

    And does anyone really expect the answer to be anything other than corprate welfare?

  14. Quoth the Raven 14

    And does anyone really expect the answer to be anything other than corprate welfare?

    That’s exactly what I’m expecting John Key is the man with the gun and Weldon is the bag man.

  15. Felix 15

    vto,

    It was Key who made those comments, not Weldon.

    Sorry, I didn’t make that very clear.

  16. Whero 16

    I know what Jesus did when he found the money changers in the temple.

    I hope New Zealand voters do the same when they realise what they have done.

  17. Whero 17

    Johnty Roads said:

    “Also, more prople will feel more secure with Key leading the ship, rather than a Labour/Green Govt.”

    Are you fucking crazy?

  18. faded tigger 18

    greenwilliam said “Is there some punchline I’m just not privy to?”

    Yes. And we are all laughing at you.

  19. cocamc 19

    so what would Labour’s response be? Lets face the facts that it is business, big and small, that drives the economy. It is business we need to help to manage through the recession so why not focus on making sure those entities survive

  20. IrishBill 20

    cocamc, Labour have already indicated they would have increased the retrofitting of NZ homes which would have meant work for small businesses in the building sector, an increase in jobs for semi-skilled labour and health benefits that would have generally increased the productive capacity of the workforce that live in these houses. I’m sure they have other plans too. My advice to Labour would be to go ahead with their mini-budget (and include the greens in the process), offer it to the government as a paper and release it to the public.

    A lot of people in Labour were quite keen to govern during the recession as many of them, Cullen included, would have relished the chance to prove their skills and ideas in a tough economic climate. They can still show they have the nous to do so.

  21. cocamc 21

    IrishBill – other than that Labour stated they would have had a mini budget but no details were provided – so how could we have judged them on that during the election. Unless there were mini budget items that would have killed them (tax cuts cancelled).
    Its a bit late to release now as hindsight is such a wonderful way to manage – and they will be criticised since the horse has bolted.
    National have indicated that they are going to bring forward infrastructure projects and that will help. But lets also think about rushing things and the issues that causes. If we look to the rest of the developed nations such as Europe and the US i would say some of the plans they have put in place are not necessarily working – yet. The markets are still down and finance/banking sector shaky at best.
    It needs a collective approach from the worlds economies and not all countries running of doing there own things with disregard to the impacts of our neighbours.

  22. John Dalley 22

    When John Key tells us he has a plan, then we know he has non. The National Governments incompetence and inaction is forcing the NZ$ in to an unprecedented slide.
    National has no plan and in a months’ time they will still have none and then he appoints Weldon to a “Talk-fest” which will come up with no major plan.
    Mark Weldon pontificated yesterday that under-performing CEO’s should be sacked, well i suggest they start with him as an under-performing CEO of the Stock Exchange.

  23. randal 23

    the essential point about this government is that for all their protestations they are not focussed on growth but merely getting a jobbers turn on every transaction.
    doubts were being cast about the debt instruments that caused this crash way back in 2002 but no government agency was willing to do anything about it in the USA and ourvery own breed of asset stripping went unchecked also as everybody in the ‘know’ took a large profit
    this government will do nothing except kick the underdog till the the US economy moves into gear again and then pretend that everything was always ok in the first place
    ho hum

  24. SPC 24

    Well I guess the guest list for the jobs summit might give it away – National sees the economy as being run by some arrangment between government and capital.

    The other thing is the preference for transferring control to larger and larger entities capitalist (state assets to private blocks of capital) or otherwise to minimise local control and democratic accountability (area health boards, the work of local councils being privatised) – the latest sign being one council to rule them all in Auckland. Applied at a national level – this is the direct election of a President to rule the country.

    It speaks to the ultimate trend of capitalism to ally to a ruling oligarchy.

  25. DeeDub 25

    I have to admit I inadvertently spat out a mouthful of my early evening beer when I saw Weldon’s smug bastard face fronting for this ‘job summit’… what a joke. The trouble is that most Kiwis won’t get the punchline until it’s too late.

  26. Felix 26

    cocamc,

    Irish has already given you one concrete, costed example which would provide a lot of work and a lot of ongoing economic and social benefit for many, many years to come.

    National have rejected it outright of course.

    I too would like to see Cullen release his mini budget, not only to give people a comparison but also because I think National really need some help.

    Remember before the election they insisted that they had all these plans in place to get us through the recession? But they couldn’t tell us what they were? Remember that? Well guess what – it’s 2 months since they won the election now and they still can’t tell us!

    The truth is they have no ideas, and Key said as much yesterday when he was asked about the jobs summit.

    Key:
    “We don’t have a whole list of, a smorgasboard of things we’re currently proposing”

    Press:
    “So the govt. won’t be taking any policy suggestions, proposals along to that event?”

    Key:
    “We won’t, but it’s a forum where we’re going to be inviting those at the sharp end of the NZ economy, the employers and businesses, and what they might discuss and what proposals they might put up, we’re going to listen to”

    There you have it. No ideas, just let business interests run the country and fuck off back to Hawaii as soon as possible.

  27. TightyRighty 27

    Cactus kate points out that according to Weldon’s “underperforming CEO’s must go”, he’d be one of the first to get spanish archered. NZX took a beating last year.

    Oh and John Delley, a falling dollar is good for the economy as it reduces the price of our exports enabling NZ exporters to sell more overseas. and if the OCR goes down next week as everyone predicts then the dollar is likely to go down further.

  28. Strathen 28

    Weldon to chair the summit? I don’t think there could be a better person really. While most people here seem to think that Weldon came in to the job just as the recession hit, some will remember back to the days when the NZX was to be integrated in to the Aussie stock exchange, it was that poor. Now we have a competitive stock exchange that stands alone. Weldon was the leader of this. I think his credentials fit perfectly as someone that has taken a failing stock exchange to be integrated, through to an independent stock exchange. Oh, and he was a NZ rep at swimming, but that’s probably irrelevant.

    NZ is lucky to be in the position that we are in. After talking to friends in the UK and US, we are massively sheltered from what the rest of the world is going through. To this, we need to thank Labour for the last 9 years. It could’ve been a lot worse (or the worst is yet to come – hope not). An even bigger thanks needs to go to our agriculture industry that is a major factor (bigger than the government) in sheltering us from the worst of it.

    However, Labours plan of retrofitting houses is false economy. Using tax payers money to pay tax payers to upgrade housing will provide a temporary relief for those concerned, but it doesn’t lead to sustainable productivity. Productivity is what the economy needs, not work for work’s sake. Yeah, it feels good to let the poor feel warm in the winter, but it doesn’t make sense to increase the number of poor.

    National’s plan to invest in to infrastructure is targeted at increasing productivity, and therefore stimulating the economy. Once the economy is stimulated, we can upgrade housing.

    Some people say that National is doing nothing. Has anyone asked if in fact doing nothing is the best course? I personally don’t think it is, but maybe the Government should be doing less?

    quote from an article I read but I can’t find it:
    ‘observe that all of the most prominent problems today–problems with housing, financial markets, health care, oil–involve some of the least-free sectors of our economy, those with the most government intervention.’

  29. vto 29

    P’s bookie I will check that out. Have some sympathy for those sentiments re corporate bureacracy and the control by funds etc. It has seemed to me for a while that the interests of directors and managers and the interests of shareholders often do not line up. QtR will check that too. Ta.

    It seems for many (those in biz especially) these are fearful times. I am seriously contemplating simply opting out altogether until some sense of normalty returns to economic activity.

    It is easy to dismiss the recent economic rise as ‘not real’, but quite frankly these low times are similarly ‘not real’. Fluff at the top and fluff at the bottom.

    It is the volatility that kills things. I could do without the booms if it meant no busts as well. My biz operates best under steady conditions. Lordy knows though how the human beast remains steady over longer periods such is our propensity for excitement and adventure…

  30. Felix 30

    Strathen,
    Using tax payers money to pay tax payers to upgrade housing…

    You forgot tax-payers’ housing. Another way of saying it is “Kiwis being paid Kiwi $ to fix up Kiwi homes”.

    Work for work’s sake? How so?

    If the work needs doing and there are people who need the work, why not? It’s not like paying people to dig holes and fill them in.

    Would it be better if everyone just insulated their own properties properly? Yep, probably, but it didn’t happen so lets deal with reality.

    Apart from comparisons to an ideal fantasy world, what is the problem with spending tax dollars on taxpayers needs to stimulate the economy?

    vto,
    Fluff at the top and fluff at the bottom

    Couldn’t agree more. Funny how the abstract nature of the whole thing comes into focus when you step back a bit from it.

  31. Pascal's bookie 31

    vto, fair enough.

    Strathen:

    quote from an article I read but I can’t find it:

    that would be here .

    google is your friend 🙂

    Personally I think this is better, certainly on a friday.

  32. Clarke 32

    This “summit” looks like the opening bid in what JK Galbraith has called “Predator Capitalism” in the US: http://www.motherjones.com/commentary/columns/2006/05/predator_state.html

    Let’s take the example of infrastructure spending. If we spend (say) $50 million on upgrading the insulation in local houses, it makes work for a huge number of tradespeople who are probably finding things a bit slow right now – and the added benefit is that power bills will be lower, people will be warmer, and there’ll be less load on the health system this winter.

    If we take the same $50 million and spend it on roads, then large companies such as Fulton Hogan will be the beneficiaries. Their staffing will only increase marginally as most of the money will go to fund machinery and raw materials. The local tradespeople won’t get any additional work at all, power bills will stay the same, people will still freeze in winter, and the health system will be under its usual pressure.

    Importantly, however, the Fulton Hogans of this country will be able to bank improved profits. Who knows, maybe they can then leverage those improved fiscal results into a stock exchange listing ….

  33. Strathen 33

    Cheers Pascal, yeap that’s the one and I apologise for my laziness. Also, I’m not quite literate enough to put the links in this yet. Maybe if I spend more time here I’ll force myself to learn XHTML so as not to detract from everyone’s experience. Good 2nd link too, a nice smile for a Friday. 🙂

    Felix
    Work for works sake. Well, it’s not going to stimulate the economy. As the link that Pascal found of mine states: ‘Though this might bring the appearance of prosperity, in the same way that an unemployed man appears prosperous if he goes on a shopping spree with his credit cards, the reality will be the opposite.’

    The economy needs to be stimulated and that means we need to produce. Spending money on the housing will not produce. It’s like spending money on a want, not a need. The economy needs stimulation, not temporarily massaging a knot out, only for it to return bigger in the future.

    It IS a bit like digging holes and then filling them. What does it achieve for the economy? Sure, the people get warm, just like the people digging holes get warm. But what value does it add to the economy? I thought we needed to stimulate the economy so as we all survive without massive losses, and unemployment only blows out to 7% rather than 15%. If this is not your goal, then I concede that insulation for housing is probably the best solution.

    ‘Apart from comparisons to an ideal fantasy world, what is the problem with spending tax dollars on taxpayers needs to stimulate the economy?’ I agree with this statement, however I believe we should spend money on taxpayers needs that increase productivity rather than social benefit at the moment. The last 9 years (maybe only 3-6 actually) we have been in a position to spend on social benefit and that is what has (should’ve??) happened. Now is the time to spend on Economic stimulation (Productivity).

  34. IrishBill 34

    “What does it achieve for the economy?”

    Strathen, it greatly improves the health of the workforce and thus it’s productivity. The key to decent Keynesian stimulus is to make sure that the money you spend to flatten a recession helps build capacity for the next upswing. In this case insulating houses would mean that in the next boom there is less lost time and greater labour capacity. Other projects should include expanding public transport and the rail network so that industry is buffered from volatile fuel prices and investing in and promoting training. One of the biggest capacity issues during the last boom was a shortage of skilled labour and it makes sense to stimulate by fixing that problem for the next boom.

  35. Strathen 35

    Valid points IB. I agree with your other projects, however I think they should get precedence.

    Having a healthy workforce for the next boom is all good, but perhaps we should ensure the next boom gets here sooner rather than later. Being healthy with nothing to do is not productive.

    The housing project appeals to the altruist in most people, and I accept that. But what happens when we have this great healthy lifestyle for all of us when there is nothing and no one left to pay for it because the economy wasn’t stimulated?

  36. randal 36

    the funny thing is that none of these dudes have ever done a real days work in their life!

  37. SPC 37

    Strathen

    Spending on healthy housing – reduces consequent health care costs (improves labour productivity) and also reduces need for more energy. Thus it is both cost effective in budgetary terms and has the added bonus in that it also lowers the cost of energy to business (reducing peak load). It also reduces any Kyoto liability.

    Is thus a good short term and longer term economic investment.

    Whereas much of the road spending is just to reduce the time of the middle class in getting to and from work in Auckland or in facilitating the quicker movement of imported goods ino retail outlets. I would argue that National’s decision is not economic one, but a class one. Their voters are not the ones living in unhealthy homes, but they are commuters who would want other taxpayers/goverment to reduce their commuting time.

    The irony there is also a better economic return from the other policy* they have abandoned, than their preference for roading projects (few of which assist in getting exports to market). The convenience of our vast import business (many of retail businesses have foreign ownership) is hardly of any boost to our economic growth.

    *R and D tax incentives and Fast Forward.

  38. Felix 38

    Investing in housing is non-productive?

    Maybe in a very short term sense it’s non-productive as it isn’t obviously producing a good for market.

    A longer term view yields a different conclusion, one of increasing the wealth of the nation.

    Dig a hole and fill it in and you’ve produced nothing. Fix up houses and you’ve produced a real, tangible, valuable improvement to the country.

    If you can’t make that distinction you need to get away from the textbooks and do some work on a building site. You’ll figure out the difference pretty quickly.

  39. ieuan 39

    I have always thought that Mark Weldon was well out of his depth running NZX. It is not really his fault that the NZ share market took a beating last year, as world wide share markets have all taken a beating but it is his fault that he has failed to grow our share market with significant new listings.

    Sorry but I don’t have much hope that this employment summit will come up with anything significant but (fingers crossed) I am wrong.

    Anything I can do to help? I’m “at the sharp end of the NZ economy, the employers and businesses’.

  40. Ari 40

    TR- a falling dollar is good for the export sector, but it also indicates a fall in confidence in our economy overseas.

    Ideally we want a dollar strong, but not so strong it strangles our exports.

  41. vto 41

    randal said “the funny thing is that none of these dudes have ever done a real days work in their life!”

    which is ?

  42. Johnty Rhodes 42

    All this govt. investing in insulatuion for houses is all shit. After 9 years of Labour too many people think it is the govt that needs to keep them warm, fuck self preservation. How about people pay for it themselves and make a saving for themselves in the long run with lower power bills. If you are a tenant sure, get the landlord to do it, but don’t expect it for free, you will need to pay some more rent for the benefit, but your lower power bill should cover it. Same for State Housing. I want a return on my compulsory investment, PAYE.

    The Greens, hence Labour by default do not know the meaning of investment, they only know the meaning of spending.

    The Greens who would have had a big say in the economy once said that some natural disaster was a good thing for the economy as it will create stimulus for building opportunities. (May have been in response to Hurricane Katrina), real homer simpson logic that.

    We need infrastructure spending so we can create a first world road/internet system that will be more efficient in 5 years time when things right themselves. Key can see this and this is why I reckon things will get done from the talk fest. Socially NZ will not collapse but you could argue society was getting worse since 2000 despite having a Labour Govt in.

  43. Johnty – Are you a tweaker?

  44. SPC 44

    Fairs fair, if people should be required to wait until they can afford to invest in home insulation and any higher user pays costs involved – the same should apply to roads and broadband. When the market can deliver the roads and better broadband without government help and users can afford to pay for their service so be it.

    Meantime, we will pay in higher health care costs and in higher power bills and in Kyoto liabilities because of that choice – because people who live in healthy homes want money for their easier commuter journeys and their extra spare time on the net.

  45. Felix 45

    I want a return on my compulsory investment, PAYE

    I know you’re just trolling, but I’ll try to put it in simple terms you can understand. I’ll type slowly and put a *$* every time I save you some money.

    One return in this case is a healthier society (or if you don’t believe in the existence of “society”, say “healthy workforce”). More healthy means more productive hours at work and more mental and physical fitness applied in those hours, therefore more efficient and profitable businesses = *$$*. Can you see how having good food available at reasonable prices benefits a society? It’s a bit like that. The next saving is energy. Lower energy use nationwide means less pressure on our energy network and therefore less spending on infrastructure so *$$* savings on that. Also less energy generation means less Kyoto costs so *$$*. Jobs for people who need work means they’re less likely to break into your house to steal your plasma screen so *$$* you save on your insurance and possibly *$* on dogfood. And the money we pay them isn’t locked up in a new power station, it’s circulated in the economy so *$$* you can have some of that too if you’re in the business of selling things or providing services.

    Those are really simple examples that even a simpleton should grasp. If you get as far as looking between the $ signs you’ll find a host of other benefits too.

    you could argue society was getting worse since 2000 despite having a Labour Govt in

    Not coherently. Or someone would’ve.

  46. outofbed 46

    I just love it when Labour supporters bang on about “their” insulating of existing housing initiative, . how naughty National has dropped it and what a great infrastructure investment idea it is.
    On the campaign trail it was amusingly labour candidates trumpeting this very good idea from the rooftops
    But as we all know, during the negations with the Greens (ETS) the Labour party had to dragged kicking and screaming to have this put into the agreement and therefore get support the ETS.
    Yes there are studies that show that 1$ spent on insulating home returns $4.00 on saved health costs. It means that your power generation needs lesson with the very real savings on electricity bills. It was about investing in the future and helping NZ meeting its sustainability goals and aspirations.
    I fell i should remind you labourites That is was A GREEN initiative that Labour resisted and fought against extremely vigorously

  47. Felix 47

    What Labourites?

    And power generation needs don’t lesson, they lessen. Although under National they probably fewen. Here endeth the lessen.

  48. Peter Burns 48

    Labourites or Nationalites? Who cares, man this country is in the shit. Oh well at least milk will be cheaper and the eggs can argue all the crap they want. Poor property developers and so on.Down goes the circus. Hen pecked pollies are a joke.

    Captcha; Cock a-doodle do.

  49. the sprout 49

    lprent: “a lot of smoke and mirrors and bugger all else”

    yep that pretty much sums it up. and as Gordon Campbell writes, it’s really just an excercise in PR damage control after people started to get a bit pissed that so far the National “Government” has been mostly on holiday.

    http://gordoncampbell.scoop.co.nz/obama-and-key%e2%80%99s-responses-to-the-financial-crisis/

    you don’t get to make tens of millions of dollars like Key has without being able to put a shine on a turd and shaft a lot of people with little or no regret.

  50. rave 50

    Key’s shares in BOA kept alive by another $20 billion bailout. Plus$180 billion to buy the bad debts of Merrill Lynch, ho ho Johno. Let’s get that man to run the economy.
    Weldon wants the Cullen fund to invest in the producer cooperatives like Fonterra, and he wants SOEs to offer non-voting shares on his NZX. Can’t raise the money otherwise. Wonder why? Wow. Get that man to raid the piggy bank. Economic recovery for whom? The robbers running all the way to the banks. Jobs summit? Jobs for the boys.

  51. Whero 51

    An egg said:

    ” . . . Some people say that National is doing nothing. Has anyone asked if in fact doing nothing is the best course? I personally don’t think it is, but maybe the Government should be doing less? . . . ”

    Ummm . . . let me think about that.

    I might lose my job in the next three months and the Government is doing “less than nothing” about it?

    Ooops. That wasn’t such a wise voote.

  52. Whero 52

    SPC said: “and the added benefit is that power bills will be lower, people will be warmer, and there’ll be less load on the health system this winter.”

    But then the foreign investor who owns the energy companies Don McKinnon sold would lose money. Eeeeeeeeek.

  53. Strathen 53

    Whero – ‘An egg said…’ That egg was me, and from one egg to another let me elaborate on my point for you.

    I wasn’t referring to the current perceived level of inaction by the government, but referring to the government removing legislation around the economy when I said they should be doing less. It’s all well and good to claim the ‘free market’ is failing, except we are not in a free market. The quote that followed was a statement saying the markets that are struggling the most, are the ones that have the most legislation attached to them. Perhaps the government should reduce the amount of legislation and let a free market be just that. Or we can continue to introduce more legislation and most probably see the economy get worse and worse all the while appropriating blame on the free market that doesn’t exist.

  54. Felix [ He is a tool.. ]

    Agreed.

    How independent a tool..?

    Could the answer lie with knowing to whom his business is most likely indebted or reliant.?

    Interesting, however, is the lack of initiative and/or imagination involved.. here.

  55. rave 55

    Strathen the banks got into trouble and needed more regulation to stay alive.
    What does that do to your argument?
    I would say the market if farket even on a public drip. Brain dead turn off the life support.

  56. Strathen 56

    Rave – That’s not true. There was legislation and government promises to financial institutions (e.g. too big to fail) that lead them down the garden path by enticing them to lend where normally they wouldn’t, especially in a free market, and if sustainable profit were their primary motive. Also the FED fixed the interest rates to accommodate the American Dream that everyone should be able to own their own home. Then once the FED found this to be unsustainable, the interest rates went up to their normal level, and the loans started foreclosing causing the collapse.

    The Commodity Futures Modernisation Act prevented regulators from checking on credit default swaps. Without this normal function, it allowed lending institutions to lend without fear of reprisal.

    I’m not abolishing the financial sector from all blame, obviously there is some (a lot of) companies that recklessly took advantage of a legislation(s) that allowed for Finance companies to ignore risk and lend unashamedly. Once again, this can be seen primarily as a result of legislation. It is illegal for a company not to exploit these things to gain a profit for their stakeholders, shareholders, and board. Therefore organisations are meant to take advantage of stupid legislation.

    IMHO, your comment does lend weight to the argument that most people don’t understand the situation and unrealistically blame a ‘free market’ where it doesn’t exist.

    Catchpa: excited Directors

  57. strathen – you’re talking about moral hazard but the market provides moral hazard by selling insurance (amongst other things) so you can’t blame government for that. I think the biggest “moral hazard” is leaving the market to it’s own amoral devices. We had one of the most unregulated markets in the world in the 80’s and all it produced was thieves and liars… Ditto Russia in the 90’s…

    Oh and the market fucked it’s reputation back then, just as it has done this time. That’s one of the reasons we’ve got so much money invested in property and such a small SX and why the vast majority of people blame the money men…

  58. Felix 58

    Strathen,

    “Fed” is an abbreviation of “Federal”, no? Meaning “Federal Reserve Bank”, no?

    Why do you capitalise it so? It’s not an acronym.

  59. Whero 59

    Strathen said:

    “Perhaps the government should reduce the amount of legislation and let a free market be just that.”

    Ummm – let me think about that.

    My impending redundancy is due to the deregulation of the US economy and the resulting credit default swaps. And now you’re telling me more deregulation is what I need?

    No thanks. You see, I still can’t get past the idea that there is such a thing as a “free market”, let alone the possibility that it shares my concerns.

    But, going back to your original post, maybe you’re right: The Goober’s perceived dithering and hand-wringing is the best option for me. Not for him, though; it is now apparent to all (except the NZ Fox-News Herald) that he has no actual policy except to repeat the mantra: ” we are exploring plans to discuss options for implementation going forward in the short term”.

    In the meantime, the Fox is in the Henhouse . . .

  60. Strathen,

    thank ye for your latest comment above. It seems from the readings that you ask/demand of legislation what it canna produce.. the distinction between law-abiding and non-law abiding or evading behaviors for example.. oh yes, one can express the words toward wholesale expectation/s but compliance lies with users and abusers of duly authorised legal terminology.. yes?

    interesting I aver is your use of the term ‘free market’. I should like to understand your own meaning (significance) for this term. Is it, for instance, similar to Friedman’s take..?

  61. Draco T Bastard 61

    interesting I aver is your use of the term ‘free market’. I should like to understand your own meaning (significance) for this term. Is it, for instance, similar to Friedman’s take..?

    Good question because, from what I’ve observed, most people don’t understand what a free-market is. They certainly don’t understand that capitalism is a market distortion.

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