The economy shrank by 0.2% in the September Quarter. None of the forecasters had dared to predict it would be this bad, except yours truly 🙂 because I looked at the facts, rather than being taken in by Key’s rosy spin. The money trader’s economic record is looking pretty disgraceful now, isn’t it? GDP per capita is now lower than when the first recession ended. No ‘aggressive recovery’ in New Zealand. Hope smile and wave is enjoying the Hawaii sun.
The decline was widespread: agriculture, fishing, mining, forestry, manufacturing, and construction. The value of exports fell while imports rose.
The dollar has plunged on the news. That’s good for exporters but it’s happened for a bad reason – our debtors are beginning to lose faith in our ability to meet our massive debts.
The Manufacturers and Exporters Association has added to the bad news by releasing its Survey of Business Conditions for November, which strongly suggests this current December Quarter will be recessionary too. But you don’t the stats to tell you that – go to a shopping centre and tell me if it feels like normal Christmas trade.
Looking ahead, there’s more bad news still to come: higher oil and food prices next year, a credit rating downgrade now almost certain, and government cuts to pay for tax cuts that will further strangle the economy and put more workers out of a job. The Rugby World Cup will be a blip against these larger trends.
It’s time to accept that GDP per capita peaked along with oil some time in the past couple of years. Now, the central question of politics becomes how we divide a shrinking pie. The elite are already aware that this the fight we’re fighting, and they’re taking all they can for themselves with tax cuts, removal of work rights, lower wages, and privatisation.
It’s time to fight back.
Meanwhile, some music: