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Is it a recession Mr Key?

Written By: - Date published: 4:03 pm, March 19th, 2008 - 26 comments
Categories: economy - Tags:

recession-special.jpgI am intrigued by the recent coverage of the state of the economy. We have reports that things will get bumpy from some economists, with others saying dire predictions are “premature grandstanding”.

Cullen doesn’t appear too worried, saying the economy’s in better shape than most to weather the storm. It was nice to hear this comment from visiting economist Joseph Stiglitz (former Chief Economist of the World Bank, and one of the ten most cited economists in history) when asked by John Campbell how to “make the pain less”?

Stiglitz: ‘One of the things that your government has done, very wise, very much in contrast to the US is that you’ve run some surpluses, fiscal surpluses. You use the resources that you have, to have a public works programme, to do some of the investment in infrastructure that will lay the foundations for strong future economic growth. [It is a] particularly good time to do it as the awareness of the importance of global warming has become so great. That means that there is a real need for new public infrastructure, new public transportation systems, changing the way some of our cities are designed. A really good opportunity to do some of the investments that will prepare New Zealand for facing the challenges of global warming, so in a sense the timing of this couldn’t be better.’
Campbell Live, 18 Mar 2008

But we can’t seem to get a clear steer of what Mr Key thinks. Mr Key today refused to characterise the situation as a recession.

“I think what we do know is we are in a very fragile economic environment,” he told Radio New Zealand.

No-one seems to have noticed that Mr Key has admitted to being part of the problem, with an overly negative focus:

Key: “Um, I was, I was out there actually being a bit negative, or saying, saying, you know, look, I was a bit concerned about the, the economy, but I mean one of the things, and I often say this to business audiences particularly when I get up is that, look, I, it’s very easy when you’re the leader of the opposition to, sort of, see shadows because, you know, quite honestly in weaker economic conditions, Governments often get booted out, and, um, so you’ve got to be careful you don’t get too negative on things when you’re an opposition politician, because you can, you can see bad things in, in a lot of things, and that may not always, you know, always be right, so, um …
Presenter: Nobody likes a stirrer.
Key: Yeah, I have been a bit negative on the economy, and I think with … (BFM, 13 Mar 2008)

So I guess that means we can expect to see him looking on the sunny side of life for awhile?

26 comments on “Is it a recession Mr Key?”

  1. Pablo 1

    I love when you quote Key verbatim like that. it makes George Bush sound like JFK.

  2. mike 2

    “So I guess that means we can expect to see him looking on the sunny side of life for awhile”
    What do expect? he’s the leader of the opposition.
    Clark and Cullen are at odds with each other – HC saying the economy is in good shape and MC saying a recession can’t be ruled out.
    One things for sure – this downturn is very bad timing for the Labour Govt – everyday more headlines of doom and gloom. I guess every cloud has a silver lining…

  3. Steve Pierson 3

    mike. why is is all about appearences for you? why aren’t you more concerned with substance, you know, who has the better policies, the actual plans. with you it’s always ‘ah but it looks bad’ etc – it’s a pretty shallow, populist level of debate really.

  4. Dancer 4

    i do find listening to Mr Key on the radio quite tricky – let alone trying to write it down! And what do i expect from him? Consistency regardless of which group he’s talking to would be a good start. If he’s got things to be critical of that’s fine – that’s the policy debate to be had. But don’t suddenly go quiet if you still have the point to be made.

  5. mike 5

    Come on Steve, you know politics is all about appearances and perception. I don’t like the way labour Govern, Helen is out of touch and Cullen is overtaxing me, there is no personal responsibilty and the health system is stuffed. If it takes a little short term pain to help remove this lot then I think its worth it.

  6. Ruth 6

    Governments often get booted out, and, um, so you’ve got to be careful you don’t get too negative on things when you’re an opposition politician, because you can, you can see bad things in, in a lot of things, and that may not always, you know, always be right,

    That’s true, you know. I’m pleased he has held his fire on this. He could have just been a drooling partisan – like some bloggers and commenters – and said we were heading for economic Armageddon…

  7. Steve Pierson 7

    mike. politics should be a debate about how best we organise ourselves as a society, anything else is cheap and tacky.

  8. Too true. Mike, that level of debate belongs at kiwiblog. On your bike son.

  9. r0b 9

    I don’t like the way labour Govern, Helen is out of touch and Cullen is overtaxing me, there is no personal responsibilty and the health system is stuffed.

    Only your first claim is correct there mike.

    Re taxes, personal tax is the third lowest in the OECD, see the graph on this page: http://en.wikipedia.org/wiki/Income_tax

    Re health, New Zealand has one of the world’s best health systems. See for example a 2004 report issued by the New York-based Commonwealth Fund. Their survey ranked New Zealand’s health system second among the six developed countries it covered. Germany is ranked first. We came in ahead of Australia, the United States, the United Kingdom and Canada. See the report here:

    http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=364436

    I do get sick of people bagging the health system, and the excellent professionals who work in it, to try and beat up a crisis where none exists.

  10. Matthew Pilott 10

    Yep, second best health system in the OECD – we’re all stuffed mike.

    What’s funny is that you’ve taken your apparent worship of appearances and perception that you apply to politics, and applied it to a ‘real-word’ system – in this case the health system. It makes you look thoroughly ignorant.

    Same with being ‘overtaxed’ and ‘no accountability’ – funny that the best you can come up with is appearances and perceptions, and not a lot else. A common hope among people interested in politics, such as political bloggers, is that such media can break through the ignorance of appearances and perception – idealistic perhaps, when presented with cases such as yourself, but hey, it’s probably a good challenge!

  11. Higherstandard 11

    rOb

    Thankyou I am one of the excellent professionals that work in our health system.

    I can confirm it is not in a healthy state and is getting worse.

  12. r0b 12

    I can confirm it is not in a healthy state and is getting worse

    Begging your pardon HS, but when it comes to personal opinions I will weigh yours along with others that I hear.

  13. “I can confirm it is not in a healthy state and is getting worse.”

    Compared to where? Healthtopia? Or probably one of those dastardly Scandinavian countries you despise so much.

  14. Dean 14

    “mike. why is is all about appearences for you? why aren’t you more concerned with substance, you know, who has the better policies, the actual plans.”

    Pot. This is Kettle. Black. Over.

  15. Higherstandard 15

    rOb

    That’s fine and a sensible position to take.

  16. Higherstandard 16

    Roger

    I was referring to the staffing issues in my DHB and similar issues that have been raised at other DHBs around NZ.

    Not sure what you’re alluding to regarding the Scandanavians.

  17. Hillary 17

    Back to Steve’s post, I suppose its pretty typical of the Opposition to talk about doom and gloom and the better future they offer. Just so long as Labour can effectively get their message out that the economy is in good shape, and we have more people in work than for a very long time, etc.

    Think of the US after the gains Clinton made that Gore did not capitalise on. Labour has to be really effective about showing up Key and his non-policies for what they are – scaremongering attempts to get power.

  18. randal 18

    a sJP Morgan said, markets go up and markets go down but the nats are continually poormouthing everything so I wouldn’t take notice of anything they say and dont forget Key wont say anything about the markets because that would be giving away his trade secrets!

  19. Dean 19

    “Too true. Mike, that level of debate belongs at kiwiblog. On your bike son.”

    Roger, do you understand the difference between before tax and after tax income yet? This is important when taking into consideration your assertions on economic matters. You have so far refused to reassess your previous mistakes in this regard, so what say you?

  20. Ari 20

    “Clark and Cullen are at odds with each other – HC saying the economy is in good shape and MC saying a recession can’t be ruled out.
    One things for sure – this downturn is very bad timing for the Labour Govt – everyday more headlines of doom and gloom. I guess every cloud has a silver lining ”

    Mike, you really need to learn to listen. “I can’t rule out a recession” and “the economy is in good shape” are consistent statements. The economy can be in good shape while we’re still not sure we won’t have a recession. There’s really no more to be said on that subject, so I’d suggest you leave it alone unless you like being laughed at.

    HS: And this is causing our woefully inefficient health system to stay at the perilous depth of #2 among OECD countries. I’m literally quivering in my boots. 😉

    Seriously though, I agree that there’s big issues to be sorted out here, but we’re not in Gloom Country yet, and the fact that Labour’s actually willing to admit that there are problems is a breath of fresh air that I wouldn’t trust National to give us.

    Dean- you have any good data on after-tax income? If so, by all means show us a trend. I’d be rather surprised if it made Labour look bad giving the slash-and-burn approach National tends to take to infrastructure and wage-building.

  21. higherstandard 21

    Ari NZ ranked at Number 2 among OECD countries for our health system.

    I would like to see that can you give me the link to the report please.

    Many thanks

  22. I haven’t see results by age but I would assume that there are pressures coming on to every OECD health system due to the boomers entering the age when health needs tend to increase considerably. Perhaps we’re dealing with this issue better than other nations.

  23. r0b 23

    HS, as I’m sure you know Ari is probably referring to the same report that I did above. It is not of all OECD countries, just six of them – six pretty relevant ones, NZ, Australia, Germany, UK, USA, Canada.

    This 2004 report was issued by the New York-based Commonwealth Fund, and ranked NZ’s Health System second overall. Germany is ranked first. We came in ahead of Australia, the United States, the United Kingdom and Canada. See the report here:

    http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=364436

  24. higherstandard 24

    Undoudtedly RS

    Diseases of older age and lifestyle are increasing throughout most of the western world.

    Have you got the link to the OECD report where we’re number two – I was having an arguement with some of my colleagues and need some additional ammunition.

  25. higherstandard 25

    Many Thanks rOb

    I have seen that report being smallish and based on msall numbers of self reporting by patients it’s unfortunately not very useful apart from being an interesting read.

    What is does allude to is that the USA health system doesn’t tend to get very good value from their spend. What it does not show is that NZ is the number two healthcare system in the OECD nor does it show that NZ is the number two healthcare system among those countries surveyed.

    I not sure that any report is available anywhere that conclusively rates one healthcare system against another and if there was it would be fraught with methodological inaccuracies.

  26. HS – I agree, the report is problematic. The problem for you however is that you can’t produce any other information (apart from opinion) that contradicts it. NZ looks like being one of the best health system in the world as far as bang for buck goes. What more could you ask for? Some more statistics perhaps?

    Well, we’re in the top third of the OECD with regard to life expectancy.

    http://www.oecd.org/document/16/0,3343,en_2825_495642_2085200_1_1_1_1,00.html

    The more you look at the health system, the more its supposed problems look like a right-wing beat up. A chance to fabricate for political gain. Well done for joining in HS!

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