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Gulp

Written By: - Date published: 11:39 am, March 26th, 2009 - 35 comments
Categories: economy, employment, workers' rights - Tags:

The Key/English odd couple continue to give us a sweet and sour mix of messages – one with rosy promises that the recession will be over any day and the other issuing dark threats that we can’t have a stimulus package only public service cuts.

In the real world there is a real economic disaster going on.

We don’t know how bad it is in New Zealand yet because our unemployment statistics take months to be published, although the number of people on the dole has doubled since National came to power.

In the US they publish their unemployment figures every month and we can see this isn’t an ordinary recession.

us-job-losses

This graph was produced in December. I’ve updated it for the last two months. I had to add more graph.

35 comments on “Gulp ”

  1. ieuan 1

    To be fair we are not the US. I’m not trying to pretend that there isn’t a recession going on, there is, but there are a number of factors that isolate us from the worst effects of the US meltdown.

    We need a NZ solution to help us climb out of recession and not a UK, US or even Australian solution.

  2. Liz 2

    Its silly articles like this that make the world go round so we can all laugh. “the number of people on the dole has doubled since National came to power”. Because Of course (here the sarcasm here) those are both related …. NOT! If labour had got in it wouldnt be any different 🙂
    Secondly, I dont recall ever hearing anyone of any importance saying that it will be over soon, only various media outlets and nobodies 🙂

  3. vto 3

    Its going to be the double-bottomed bottoming, as said a while ago. First, the first slump, followed by govt intervention to stabilise leading to a wobble period (current), which wont work, followed directly behind by the second slumpy bottom. It will all get rather yucky imo.

  4. gomango 4

    I’m not going to attempt to deny the scale of the US’s problems – which will be compounded in future years by the fiscal hole they are plunging down – but you’re not really showing the right series here. BTW your scale should be in millions of jobs not 1000’s. The two graphs which make better sense to readers are the month on month change in jobs (looks like a hockey stick) or the actual household survey unemployment rate (still climbing, up at 8.1%). Whats going to cause real pain to the people in the street is the inflation about to be unleashed. Country not to be? UK. Plunging down a path that will stymie growth there for a decade.

    You cant spend your way out of debt. Debt created the global crisis – not solving the debt problem only delays recovery.

    • ieuan 4.1

      ‘You cant spend your way out of debt. Debt created the global crisis – not solving the debt problem only delays recovery’

      No probably not, but most of the large cash injections in the US and UK economies have been to stabilise banks & insurance companies that are on the brink of failing.

      Only time will tell if this is the right course of action, but letting them fail and this causing a world wide domino effect is too horrible to contemplate.

      • Draco T Bastard 4.1.1

        It isn’t – they should have been allowed to fail.

        • TightyRighty 4.1.1.1

          hear hear

          • vto 4.1.1.1.1

            and here too.

            mind you – it would have been a bloodbath. Imagine the lines of people outside banks trying to withdraw their money. worldwide. Not to mention the insurance and fund companies and the like. It would have been the biggest panic in history. That panic was averted. Now it is just a slow sink to the same position that would have been had they been allowed to fail. Which leads to the question – was it the best option? Perhaps it was. Or rather, perhaps it was not done perfectly, as those who should have paid / lost have not paid / lost enough.

          • Travellerev 4.1.1.1.2

            Given that the current global financial system is based on Fiat money printed into existence out of thin air by a privately owned banking cartel and we are the suckers borrowing it against usurious interest in order to bail those selfsame banksters out perhaps it would be prudent to take back the right to print our own money and ditch the parasites then perhaps it wouldn’t have to come to long lines.

            Al that would be needed is to pay those small savers their money in a government issued interest free currency and dump the gambling (parasites) (strike through tag doesn’t work) junkies.

            And while were at it just think of that nice man John Key with his $50 million habit. No wonder he has that medicated happy look all the time. He’s on a permanent junkies high and in charge of the (hen house) dealers stash.

    • Snail 4.2

      talk of inflation now as some future strategy admits one very important thing..

      think about it – lest you (innocently) cast the first stone.. and know as you do that ignorance is no defence in the eyes of the law..

  5. all_your_base 5

    Liz, I don’t take Eddie to be blaming National – I certainly don’t hold them responsible for the recession. The date they came to power just seems like a good reference point.

    What I *will* hold them responsible for is an inadequate response to the crisis and their apparent desire to ram through right wing policies that strip from workers and families those protections they already have.

    From TVNZ on Monday:

    ‘Prime Minister John Key believes New Zealand will be heading out of recession quite strongly by the end of the year…

    “My view is by the end of 2009 we won’t be having negative quarters, 2010 will be an ‘up’ year, and 2011 will be a strong growth year,” he says.’

    http://tvnz.co.nz/business-news/nz-climbing-recession-end-2009-key-2576956

  6. DS 6

    The thing NZ often forgets is that its current recession is not actually part of the world-wide depression (yes, I used the ‘D’ word). It’s a home-grown one, driven entirely by high interest rates. This is the reason NZ has been looking good in comparison, with a thus-far relatively tame recession – the monster that has been causing chaos overseas is only just starting to hit us now.

    That said, that (in)famous graph of US unemployment is arguably a bit misleading – the US labour force is much larger today than it was in 1948 – losing a thousand jobs in 2009 is relatively less severe than losing 1000 jobs in 1948.

    • gingercrush 6.1

      Wrong. Yes we began a recession before others which was home-grown. But we would have been out of that recession by now. The reason we’re in recession longer is very much because of the international financial crisis. Labour changed their election campaign and likely dropped a number of policies because of the financial crisis.

    • gingercrush 6.2

      Wrong. New Zealand was in a home-grown recession. That is true. But the recession we have now is caused by the international financial crisis.If it was still home-grown we’d be out of it by now. Labour themselves undoubtedly had more policies planned but they removed them simply because the financial crisis had affected New Zealand so much

      We are however, in a very good position compared to other countries.

      I actually replied to this like 10-15 minutes ago but either there are cache problems or it didn’t send..

  7. The number of job losses isn’t the number you should be looking at – you need to weight it with respect to population growth. When you put it in that context the recession is still bad – but it doesn’t look nearly as dire as this graph indicates.

    I discussed it a while back here:

    http://www.tvhe.co.nz/2009/02/09/why-the-us-recession-may-be-the-worst-in-recent-history/

    and the Big Picture has it in per captia terms here (this is what I used in my post):

    http://www.ritholtz.com/blog/2009/02/post-wwii-recession-job-recoveries-months/

  8. Alex 8

    Be careful Liz. Disagreeing with anybody on here will get you labelled a troll and banned. They’re communists so they don’t like free speech.

    • Tane 8.1

      And yet your comment’s still here, and so is Liz’s. And all of Redbaiter’s. Strange given how much we Standardistas hate free speech, eh?

    • ghostwhowalks 8.2

      Alex, you may remember DPFs dictum.
      You can say what you like but not on my blog.
      Radio talkback follows a similar line.- I choose whether you come on air and if I dont like what you say then you get cut off.

    • Draco T Bastard 8.3

      The only thing you comment shows is the level of your ignorance. I suggest learning about something before you try to denigrate it.

  9. BLiP 9

    Is it just me or is anyone else getting sick of the use of the word “recession”? Its a misnomer; the correct term is ‘depression”.

    The international financial system is a myocardial infarction victim flopping about in the back of a decrepit ambulance hijacked by fleeing criminals yet inching its way through 5pm traffic on State Highway 1 at Ellerslie while being persued by a battalion of lawyers – and not a doctor in sight.

    I am aware of Bentley’s Second Law of Economics and the number of economists required to reach a conclusion yet, IMHO, those who insist on using “recession” to describe the current economic situation are deliberately obscuring truth and preventing us from adequately preparing for what is to come.

  10. RedLogix 10

    For those interested, there is a whole lot of great material on this topic here.

  11. r0b 11

    Cheers Matt – useful.

  12. infused 12

    The banks should have been allowed to fail. It’s the natural correction that needed to occur.

    Obamas plan of pumping shit loads of cash in to the economy is going to fail. Wait and see.

  13. Santi 13

    Message fo Dutch Einstein: We could be much worse off.
    Imagine if socialist Labour had won the election. We would be pretty stuffed by now.

    • Felix 13.1

      How so? Do you mean not only would we be in a global recession but you’d also be having a wee cry?

      Or do you think we would have lost more jobs? Earned less from exports? Please explain why.

      I imagine you must have some scientific, logical basis for your claim, but I do have an incredible imagination.

      p.s. when you call someone “Einstein” ironically, it’s not a good idea to reply to the wrong thread twice with spelling mistakes.

    • Felix 13.2

      yeah he’s a smart one – and I’ve just done it myself in a display of meta-irony.

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