Key missing the big picture

Written By: - Date published: 8:09 am, September 22nd, 2011 - 58 comments
Categories: bill english, capitalism, Economy, john key - Tags: , ,

It’s a bit of a worry that the PM seems to be clueless about the complexity and interdependence of the world economy.  Only from a state of blissful ignorance could Key be claiming that she’ll be right:

PM not too worried by IMF’s alarm bells

Prime Minister John Key is apparently not too alarmed by the IMF’s declaration that the global economy has entered a dangerous new phase. …

“We have a vastly different position to Greece. I mean our Government debt is about 20% of GDP, their’s is well over a hundred percent,” he said.  “We’re much more conservative. We’ll be back in surplus in three years, they’ve got no chance of being back in surplus probably for 20 years.”

Yes indeed, we can all thank the last Labour government that we went in to the global recession with zero net debt.  That gave National plenty of room to run debt up again without reaching dangerous levels.  But to brush off the IMF’s warning (coming just days after the World Bank warning) displays a fundamental lack of understanding.  Perhaps Bill English could take John aside and explain it to him:

Bill English predicts hard times for the economy

Driving the government’s austerity is the fundamental goal of getting back into surplus by 2014/15 after running some of the biggest deficits in the country’s history following the global recession.

“At the moment we’re on track for that,” English says. “But there are any number of circumstances that would put pressure on that goal – potential disruption in European financial markets, a slowdown in developed economies, and maybe China.

English is plodding along with unimaginative and destructive policies, the wrong solution to the wrong problem, but at least he understands that the New Zealand economy is a tiny insignificant cork tossed on a turbulent global sea. He should take John Key aside and explain to him that we will not be immune to the rapidly approaching Recession II.

58 comments on “Key missing the big picture ”

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  1. Carol 1
    22 September 2011 at 8:20 am

    Jon Key is a Used Economic/Financial Systems Salesman. He knows the economy is in a dodgey and dangerous state, but he’ll keep putting positive spin on it for the punters.

    • Craig Glen Eden 1.1
      22 September 2011 at 8:33 am

      Yup Key should have said thank God for Michael Cullen when all us idiots wanted tax cuts he paid back Government debt. The big picture for Key is selling what is left of our state assets so he dosnt want to scare the punters if he can get three more years he rape NZ for all its worth.

      • Enough is Enough 1.1.1
        22 September 2011 at 2:25 pm

        Yup Key should have said thank God for Michael Cullen who paid back Government debt from increased revenue that was the earned from us all going on a spending binge with borrowed money.

        Yup, the good old debt switch which is and will continue to hold back consumer spending while those loans and credit cards are paid off.

        Thank you Dr Cullen.

        • Puddleglum 1.1.1.1
          22 September 2011 at 7:34 pm

          “Michael Cullen who paid back Government debt from increased revenue that was the earned from us all going on a spending binge with borrowed money.”

          Can’t recall that law Labour passed that made it compulsory for everyone to take out bank loans on the house to (a) buy more houses; (b) renovate houses; (c) go on holidays; (d) buy the boat. Whatever happened to that old-fashioned right wing notion of ‘personal responsibility’ when you really need it???

          About all the then government could have done further to stop that credit binge on the back of property would have been to introduce a CGT – now, there’s a thought. 

  2. kriswgtn 2
    22 September 2011 at 8:39 am

    Key will be fin,e hes got his millions 🙂 and doesnt give a fuck about anyone else @ the end of the day

  3. mickysavage 3
    22 September 2011 at 8:40 am

    The scary thing is that Key’s “I’m relaxed about that” strikes a chord with the sector of voters that tend to decide elections.  They see a leader that makes them relax.  They do not realise that he is driving them in a bus at full speed towards the edge of a cliff but he allows them to not worry about the future.
     
    Blind ignorance is much more fun than looking to the future and realising that things are not going to be the same.
     

    • tc 3.1
      22 September 2011 at 9:54 am

      Yup MS talking to a long term umemployed person the other day who’s going to vote for them because ‘he’s a self made man’ …..turkeys, here comes christmas.

  4. Afewknowthetruth 4
    22 September 2011 at 9:32 am

    The Nazis worked out that Jews going to their deaths were a lot happier about it and put up less resistance if the station of their destination was nicely painted and had tubs of flowers etc., and had signs saying ‘hot showers this way’.

    Key and English are not ‘clueless’. They are working to a plan which has proven successful over and over again, a plan which includes them being richly rewarded for bringing feudal-style debt slavery and a much, much bigger gap between the rich and poor to NZ.

  5. AAMC 5
    22 September 2011 at 9:58 am

    Interesting his acknowledgment of our relayively low Government Debt

    “We have a vastly different position to Greece. I mean our Government debt is about 20% of GDP, their’s is well over a hundred percent,”

    when they’re Austerity meme has relied on emphasizing our debt problem.

    On another economic note…

    “Are economists ignoring Australia’s property bubble?”
    http://theconversation.edu.au/are-economists-ignoring-australias-property-bubble-3268

  6. dave brown 6
    22 September 2011 at 10:09 am

    Why would Key admit to global problems affecting NZ 8 weeks out from an election?
    Get real and tell us how Labour is going to rescue the NZ ‘cork’ in this maelstrom.
    I would say follow the course of action for Greece which is repudiate the debt as the bosses’ debt, nationalise all the key sectors of the economy including the Aussie banks and plan our way out of this mess.

  7. queenstfarmer 7
    22 September 2011 at 10:16 am

    we can all thank the last Labour government that we went in to the global recession with zero net debt

    That’s nothing to thank, because it’s no acheivement. Any big-spending Govt can immediately have zero debt via fiscal policy. The question is how much damage (or lost opportunity) is done to the economy in the meantime. And in Labour’s case, the cost was very bad.

    • r0b 7.1
      22 September 2011 at 10:23 am

      Any big-spending Govt can immediately have zero debt via fiscal policy.

      Can they indeed? Please send a memo to Greece, they will be very pleased to hear the news.

      Whereas Labour actually paid off debt and left things in good shape, as Bill English, the IMF,  Treasury, and the Governor of the Reserve Bank all agreed.

      And in Labour’s case, the cost was very bad.

      Not according to the actual facts, or to Reserve bank Governor Dr Allan Bollard in 2008:

      We have enjoyed a decade of growth, the longest period of economic growth since the post-World War 2 era. Inflation has been low, averaging 2.2 per cent since 1998.

    • Craig Glen Eden 7.2
      22 September 2011 at 11:08 am

      So a Government that increases Government debt has high inflation and is seeing real wages go backwards and has the economy performing poorly is good… because you voted for them one can only rationalize using the same logic you use for your dislike of Keith Lock.
      But a Government that reduces poverty grows the economy and pays back debt is no good because you didnt vote for them.I think the following slogan sums you up “good on ya maaate”

    • Colonial Viper 7.3
      22 September 2011 at 11:33 am

      Any big-spending Govt can immediately have zero debt via fiscal policy.

      Every man woman and child in Greece owes the equivalent of US$50K to foreign governments and foreign bankers.

      Tell me, what fiscal policy is going to pay that off?

      I can think of one policy, and its not a fiscal one.

      Strategic debt default. Greece has done it many times before, and it will do it again.

      • vto 7.3.1
        22 September 2011 at 11:40 am

        “Every man woman and child in Greece owes the equivalent of US$50K to foreign governments and foreign bankers.”

        You see though, that is not the case. Just like it is not us who owes the debt here in NZ. It is owed by the government. It aint nowt to do with me, except through the jackboots of the state forcing it from my wallet through threat of physical sanction, which goes by another name in some circles…

        Let the stupid lenders suffer. There is no rule which says that the world will end if a loan is not repaid. Every loan comes with a risk of non-repayment. Dumb-arse lenders for lending to a bad credit-risk.

        Default!

    • Lanthanide 7.4
      22 September 2011 at 12:18 pm

      Here you come again with your sophistry about how easy it is to run a surplus. No one’s really interested in your boring word games, qsf.

    • Draco T Bastard 7.5
      22 September 2011 at 12:25 pm

      Well, it looks like QSF has joined burt and big bruv in the Ministry of Truth.

    • bbfloyd 7.6
      22 September 2011 at 2:07 pm

      queeny….. forgive me… i had no idea that your surname was canutte….

      • kriswgtn 7.6.1
        22 September 2011 at 3:13 pm

        lol

      • Ianupnorth 7.6.2
        22 September 2011 at 3:24 pm

        Here’s a defence of QSF, at least he has the balls to front – where are the always absent Chris73, HS and Big Bruv on these threads
        Answer Missing in action; he (QSF) at least has an opinion, even if we all realise he is quite wrong; it is a shame the other Key fanatics cannot comment on here for fear of ridicule.

        • higherstandard 7.6.2.1
          22 September 2011 at 4:10 pm

          There’s two possibilities Ian

          1 – The rest of us from the VRWC had an RDO off from baiting on the left blogs.
          2 – We actually have a life outside of this blog.

        • Bazar 7.6.2.2
          22 September 2011 at 7:41 pm

          “it is a shame the other Key fanatics cannot comment on here for fear of ridicule.”

          I used to post more, but got tired of the shear stupidity and total lack of respect on this forum, there’s only so much stupidity and insults i can deal with before i burn out and leave people to play in their ignorant filth.

          This isn’t a site which is happy to hear opposing points of view either, with rebuffs generally comprising of insults, because apparently if you can’t articulate your point of view, or read up on what the actual debate is about, responding with name calling and ridicule is equally acceptable.

          Case and point, the replies to this.

          I’ll add, there are a few good commentators on this site i can respect, even if i disagree with them. Genreally i feel i’m just wasting my time replying here.

        • KJT 7.6.2.3
          22 September 2011 at 8:18 pm

          Happy to have the other RWNJ Key fanatics stay in their alternative universe at the sewer.

          Their minds are too closed for anything based on evidence to have an effect. The endless repetition, of the same memes, gets tedious.

  8. vto 8
    22 September 2011 at 10:18 am

    Yes well Key’s deception in not admitting to the true state of things is yet another example of why the politicians should apply the rules they make for the rest of us to themselves….namely, the Fair Trading Act.

    Call it The Fair Trading in Politics Act whereby it is illegal and subject to incarceration to engage in misleading and deceptive conduct in politics.

    If it is good enough for the goose it is good enough for the gander. No?

  10. Brett 10
    22 September 2011 at 11:38 am

    Who would think a guy who teaches introductory java would know more about economics and finance than the PM who spent most of his career immersed within the money markets and who know mingles with the world leaders on a regular basis.
    Crazy stuff.

    • vto 10.1
      22 September 2011 at 11:45 am

      Who would think, in this day of financial meltdown, that some people would still trust a guy who has spent his career immersed in selling dodgy financial gimmicks and who mingles with the world’s politicians.
      Crazy stuff.

    • McFlock 10.2
      22 September 2011 at 11:54 am

      Who would have thought a fuck-knuckle tory would take that long to google a non-tory commentator, just for the purposes of badmouthing them?
        
      Keep it up, Anthony – logic might be pearls before tory swine, but without it they pretend that white is black, black is grey and grey “is not a good look, so I’ll pay some of the money back”.

      • Brett 10.2.1
        22 September 2011 at 12:25 pm

        Who would have thought a fuck-knuckle tory would take that long to google a non-tory commentator, just for the purposes of badmouthing them?

        I am not badmouthing the guy, just making an observation.
        Out of curiosity, what is the definition of a tory, is it just someone who supports the National party or does it have some other meaning?

        • McFlock 10.2.1.1
          22 September 2011 at 5:06 pm

          Slightly wider than that – anyone who defends the rule of a few folk who are in power by “virtue” of luck, criminality (or what should be criminal) or heredity.
           
          OED has many different uses, but in this case I prefer the Urban Dictionary.
          Also look up the terms “tory lies” and “tory ball-licker”, which the OED don’t seem to have encountered…

          • joe90 10.2.1.1.1
            22 September 2011 at 5:20 pm

            I prefer the National Archive definition: Tory

            Originally an Irish term suggesting a papist outlaw. It was applied to those who supported the hereditary right of James despite his Roman Catholic faith. By the 18th century it denoted politicians who favoured royal authority, the established church and who sought to preserve the traditional political structure and opposed parliamentary reform.

    • Colonial Viper 10.3
      22 September 2011 at 12:48 pm

      Who would have thought that people are still ignorant enough to believe that ‘the markets’ and ‘Wall St’ have anything to do with the real economy that 95% of people have to live and work in.

      Wall St is relevant to wealthy high net worth individuals with plenty of capital, full stop.

      • Brett 10.3.1
        22 September 2011 at 12:50 pm

        What about 401k’s

        • Vicky32 10.3.1.1
          22 September 2011 at 5:22 pm

          What about 401k’s

          What about them? How are they relevant to New Zealand? (Plus – again, plurals don’t take apostrophes. Please note that fact!)

          • Brett 10.3.1.1.1
            22 September 2011 at 5:56 pm

            What about them? How are they relevant to New Zealand? (Plus – again, plurals don’t take apostrophes. Please note that fact!)

            What a shame all those smarts are wasted on a bene.

            • Vicky32 10.3.1.1.1.1
              22 September 2011 at 6:16 pm

              What a shame all those smarts are wasted on a bene.

              What a pity that so much stupidity belongs to someone who has a job! Don’t you get that people are not “benes” for life? Or by choice? By choice, I am an English teacher – but it doesn’t take ‘smarts’ (sic) to avoid the grocer’s apostrophe…

    • lprent 10.4
      22 September 2011 at 4:55 pm

      I note that you carefully didn’t mention his research interests or other courses.

      But he probably does know more than Key does and more importantly spends time thinking about it. Running around chasing money after doing a basic commercial degree doesn’t exactly induce a high degree of understanding. Having seen Key in action over the last few years what has been noticeable is that he clearly does not understand very much outside of his confined wee box of currency trading and investment strategies.

      Compared to Helen who I had the good fortune to spend quite a lot of time with over the last 20years, I’d rate Key as inept noob.

      • Brett 10.4.1
        22 September 2011 at 5:40 pm

        I note that you carefully didn’t mention his research interests or other courses.

        Had another read of his credentials, pretty impressive stuff, probably selling the man a bit short by only mentioning the intro to java aspect of his cv.

        As for Key and currency trading, very few have had a successful career in it and in all honesty the man deserves respect for that.
        I gave it a go a few years back, I certainly didn’t have what it took and a doubt very few would.

        • Draco T Bastard 10.4.1.1
          22 September 2011 at 6:18 pm

          As for Key and currency trading, very few have had a successful career in it and in all honesty the man deserves respect for that.

          Respect for thieving? Not bloody likely.

  11. Bored 11
    22 September 2011 at 12:57 pm

    Key is missing nothing here: he is fully aware of the state of the worlds economy. What we are not addressing is where Keys allegiances are, what is in his interest?

    You will note that first and foremost Key is a bankster. These are the worlds most powerful gang of neo feudalists. The outcome they want is our subservience and permanent indentured labour and servitude. To achieve this they commit larceny against the citizenry on a massive scale.

    Its not at the fore front of Keys mind, it is just part of his world view towards which he and his cronies drive us. There is no conspiracy or conspiracy theory here, it is as organic a kleptocracy as emerged in the former USSR, or prior in Fascist Italy. We need to wake up, our sleep walking enables these criminals to operate.

  12. Georgecom 12
    22 September 2011 at 1:20 pm

    John Key absolutely is a used economic systems salesman. When you have spent your life engaged in what amounts to little more than financial gambling why would we expect anything more. NZ however needs a little bit better than that.

    Interesting to see all the Nat party “Choose a brighter future” billboards going up.

    A ‘brighter future’ when exactly?

    Certainly not in the last 3 years of smiling and waving and doing nothing. There is little indication that 3 more years of smiling and waving and doing nothing is going to deliver a different result.

    Be interesting in voting punters start to put the ‘brighter future’ rhetoric alongside their reality and wise up.

    • Puddleglum 12.1
      22 September 2011 at 7:51 pm

      I think it’s a bit odd (maybe even a strategic error) for National to re-use the campaign slogan from last time (Brighter Future).

      It immediately raises the question of why we have to vote for it again? Presumably, the only answer is that we haven’t got one – a failure to deliver first time round. Certainly, the stats can be pushed back at National to confirm that failure – as Guyon Espiner did in that pre-conference interview with the constant refrain to Key of “That’s a failure, isn’t it?”

      I suppose you could subscribe to the plainly stupid argument that we now have a ‘brighter future’ and this time we’re voting for an absolutely ‘dazzling’ one – but then why not have ‘Vote for a dazzling future’ this time? Or, how about ‘Vote for a new, improved, whiter than white future!!’

      It reminds me of that Persil (?) ad years ago that featured ‘unmarked Pakuranga housewives’, or something like that …

  13. Herodotus 13
    22 September 2011 at 6:43 pm

    that we went in to the global recession with zero net debt- r0b perhaps that is because we “value” items like student debt $10b as an asset, funds such as EQCD as an asset that we have unfortunately only recently leart is there fior a reason and cannot be banked upon as general govt funds, the same can be said for Nat Super Fund or ACC
    Yet under Labour our govts foreign debt increased, and pity NZ inc debt has increased from 97 to 130% of GDP- and take into consideration such contigent issues as leaky buildings $10-$20b and NZ was not left in as strong a position as manythink- pity we have weakened further !!! One day this debt will start to kill us as NZ$ depreciates and then we will see the influence of tradables into our inflation data and the subsequent reduction in our standard of living more so than present.
    http://www.rbnz.govt.nz/statistics/extfin/e3/download.html

    • Colonial Viper 13.1
      22 September 2011 at 6:50 pm

      Fuck it if it comes to that you just default. And by the way are you ignorant? A depreciating NZ dollar is GOOD for NZ industry.

      Yet under Labour our govts foreign debt increased

      This is a lie.

      Cullen paid back a huge % of our public debt. What the fuck are you on.

      • Herodotus 13.1.1
        22 September 2011 at 7:09 pm

        refer to my link Foreign debt Mar 1999 = $17.384b, or Mar 2000 = 16.368b,Dec 2008 = $18.86b. Funny how the figures/facts do not follow your emotional outburst !!! So how is it a lie or is there some issue you have with RBNZ stats???
        Inflation has been relatively low due to NZ high eexchange rate allowing the tradable portion that inflation is calculated (e.g. plasma TV) to come down in price offsetting a high non-tradeable portion of inflation. When NZ$ falls the tradeable portion of our inflation calc will increase dramatically e.g. price of petrol, imported goods. Low NZ$ does little for inflation it could for exports, but as we have seen the likes of dairy/milk we pay based on international prices.

        • Colonial Viper 13.1.1.1
          22 September 2011 at 7:25 pm

          Cheap TV’s meh. Herodotus we have been importing deflation from China and exporting manufacturing jobs out of KiwiLand. That’s what you are describing.

          Its a bad fucking deal.

          As for NZ’s govt debt. I admit I’m surprised by the figures. However as a proportion of NZs economy GDP declined significantly.

          • Herodotus 13.1.1.1.1
            22 September 2011 at 7:39 pm

            CV – we all have less good days, and the reduction of govt debt is just follows on – if you tell a lie enough times it is accepted as the truth !!!!
            I know importing deflation is crap, but with trade deals with China, India etc it will not improve. We have been sold a dog, and Lab/Nat following the same economic blueprint will not change our direction – We need a substantial shift in our thinking, and not become servants or international bankers/IMF/World Bank. Always thought we had 2 competive advantages – cheep renewable power and we grow grass. Pity the power stations and the farms we (could be) selling off = tennants in our own country and exporting the competive advantage offshore as profits

          • mik e 13.1.1.1.2
            23 September 2011 at 5:56 pm

            herodotus Labour got the economy to grow by 28% by volume something national can only dream of, in five years National have had less than 1% growth but debt
            is going to be $76 billion.

    • Puddleglum 13.2
      22 September 2011 at 8:09 pm

      “So how is it a lie or is there some issue you have with RBNZ stats???”

      Herodotus, I don’t know about CV, but I think the problem with your initial comment was that, presumably, you were talking about raw dollar amounts (ignoring both inflation and the proportion of the govts foreign debt as a percentage of GDP).

      From the table you linked to: 

      March 2000 Govt Foreign Debt = $16,368m or 14.7% of GDP 
      December 2008 Govt Foreign Debt = $18,860m or 10.2% of GDP

      As a percentage of GDP it reduced by almost a third during Labour’s three terms. In raw dollar terms it increased by $2.5b, or about one eighth.

      For comparison, the raw dollar amount of debt, from the same table, for Dec 1995 was $22,419m and 24.1% of GDP at the time.

      I just don’t get these complaints about Cullen’s stewardship. I have some, but they’re not those. 

      • Herodotus 13.2.1
        22 September 2011 at 8:42 pm

        There is this idea of debt being paid off (most people IMO think of debt reduction as the $ amount decreases), people associate all those massive operating surpluses as extra cash. The surpluses in most were not in the form of cash, But I get the strong impression that you know all this and the mirrors and widow accounting treatment that goes on.
        But I do have an issue in isolating the indexing the debt to GDP. Much of our GDP arose from the unique economic conditions of the time, with little of this growth going towards ongoing productivity
        But after the misconception of debt reduction is that lack of comment or understanding in general terms of Balance of Payments & Terms of trade and it is the build up of many of these indicators that tell me NZ is a sick patient, and one day we will experience the consequences of this. And having ivy league post-grads/Bankers running govt will not change anything.

      • mik e 13.2.2
        23 September 2011 at 6:03 pm

        Labour didn’t take the treasury benches till November 99.And the debt under National was higher at times through out the ninetees they only managed 8.7% volume of growth during that time . -.8% under the final 2years when borrowing bill english was in charge.

  14. Barry 14
    22 September 2011 at 6:59 pm

    We have the best terms of trade in a generation and should be bouncing back after a disaster and still we have practically zero growth.

    • marsman 14.1
      22 September 2011 at 8:12 pm

      That’s because we have an inept Minister of Finance and an ‘inept noob’* as Prime Minister. (* thanks lprent)

      • Georgecom 14.1.1
        22 September 2011 at 9:08 pm

        Marsman, agreed that the ineptitude and noobieness of the FM & PM is being exposed by the current economic malaise. However if this was a normal downturn the no nothing approach by this government would eventually be hidden by normal resumption of economic growth. Post 2008 the world has changed in a number of ways however and the FM and PM are simply not equipped to understand it, never mind plan our way through it. They still appear to believe that ‘business as usual’ will soon return and all they have to offer is ‘she’ll be right’.

        The past 3 years of failure to deliver a ‘brighter future’ should be enough time for capable leaders to wake up to that. All we are offered though is more ‘choose a brighter future’ rhetoric and a continued do nothing attitude. If we do actually want a ‘brighter future’ we need a brighter FM and PM, transport minister etc etc.

  15. randal 15
    23 September 2011 at 11:36 am

    He just wants three more years of power to re-distribute the states assets into his own and his cronies pockets. meanwhile appeal to the ‘crackers’ and rednecks that he is doing something. Key and his ruinous gang of inepts and pelferers must go.