More to worry about

Written By: - Date published: 5:54 am, December 2nd, 2008 - 41 comments
Categories: john key - Tags:

John Key said yesterday that he expects growth in “the next financial year to be pretty close to zero”. That means he’s anticipating a serious recession. That’s our national wealth shrinking for two years, even as the population continues to grow – a smaller pie for more people to share.

Here’s hoping we will see an ambitious program from National/ACT to protect Kiwis by creating jobs, boosting wages, looking after those who lose their jobs, and ensuring the social wage (the goods and services Kiwis receive free of direct charge from the State) is not eroded.

[also, John, you’re in power now – drop the anti-Labour bullshit, you are responsible for your government, there’s no use saying Labour was crap too. And governing is about more than catchy lines so stop repeating the vacuous campaign lines like ‘balance our environmental responsiblities with our economic opportunities’, which you said three times in ten minutes during your press conference]

41 comments on “More to worry about”

  1. TBA 1

    “also, John, you’re in power now – drop the anti-Labour bullshit,”

    Thats a bit rich Steve. For 9 Years Labour stood in the house and said that no matter what ever the crisis of the day was that it was the fault of National and its policies of the 90’s.

    Also to date you have seen John Key not only openly praise Helen Clarke for her previous leadership but also sort advice from her when he felt it might aid him. Both these things I don’t recall ever happening before from a NZ Prime Minister.

    [lprent: At least spell her name correctly. It is so common in trolls that I threw it into auto-moderation as a signature. I always thought that was petty and small-minded]

  2. Ray 2

    “John, you’re in power now – drop the anti-Labour bullshit”

    Oh I don’t know about that, I seem to remember Labour wheeling that out after 9 years. And I don’t think you or your supporters were the ones pointing out the sillyness of that
    But yes we are in for difficult times and some of the reasons for that can be sheeted home to Labour.
    And before you say they left us in grear condition.
    What did they do when theall those Finance Companies went tits up years before the real shit hit the fan?………..nothing

  3. rjs131 3

    That’s Recession SP – let’s not get too emotive now.

    Nice to see your bigotry is still strong against Key and the Nats>

  4. Nick 4

    I’m sure Key reads this blog every day and will heed such advice SP.

  5. naughtybynature 5

    I have often wondered whether Steve is the by-product of an irascible goat and flowergirl who took nature love one step too far…

    [Tane: And that’s you banned for life. Have some bloody respect.]

  6. r0b 6

    Nice to see your bigotry is still strong against Key and the Nats

    It’s going to take you righties a while to get used to it isn’t it.  National are leading the government now.  They must make decisions and act.  We the people get to analyse these decisions and discuss.  To do so isn’t “bigotry”, it is free speech, and an essential part of democracy.  So – ahh – grow up and stop whining.

  7. Pascal's bookie 7

    nbn thinks she’s Steve’s mum.

    You need to let it go naughty, it all happened a long time ago and you need to accept that that nasty old goat was just using you. You were never going to have a family with him, and these bizzare fantasies about ‘what might have been’ are just holding you back. You need to move on.

  8. Steve – you’re just getting petty now with your “[also, John, you’re in power now – drop the anti-Labour bullshit, you are responsible for your government, there’s no use saying Labour was crap too.”

    As others have observed, Labour was still blaming National right up to the election for things that they may have inherited, but hadn’t got around to fixing. We all know that you are totally partisan, but it’s a bit rich taking the moral high ground when Key has been PM for less than two weeks, when he has had one full Cabinet meeting, and when Parliament hasn’t yet convened, so National hasn’t had an opportunity to even introduce, let alone enact any legislation. Nothing that Labour did has yet been dismantled, so everything is still effectively as Labour left it.

  9. vto 9

    Well yes there is plenty to worry about for people so predisposed, such as myself. The big question is – will this all come right and smoothly bottom and curve up again, or will it be a double-bottomed bottom with the second in fact a catastrophe. My 2c says that govt bailouts etc are bandaids as govts are not big enough to make the required difference (whatever that may be). I mean, how can the taxpayer bail out the taxpayer? So the double-bottomed bottom it is.

  10. Graeme 10

    John Key said yesterday that he expects growth in “the next financial year to be pretty close to zero’. That means he’s anticipating a depression.

    Unlike recession there is no general definition of “depression”, but I doubt that would make it if we were to dream one up.

  11. r0b 11

    I mean, how can the taxpayer bail out the taxpayer?

    Excellent question.  Of course they can’t.  But they aren’t expected to.  Taxpayers are only expected to bail out rich business / bank owners and speculators.   Welfare for capitalists – privatise the profits and socialsie the losses.  Clever huh?

  12. Tane 12

    Fellas, I think Steve was advising John, and National, to drop the oppositional politics and start acting like a government. It’s a transition every party needs to make as it enters government, but John doesn’t seem to get it yet.

  13. lukas 13

    [lprent: At least spell her name correctly. It is so common in trolls that I threw it into auto-moderation as a signature. I always thought that was petty and small-minded]
    I take it you will be applying the same standard to Randal et al how add an ‘s’ to Key?

    [lprent: It is a lot harder to get a machine to discriminate on such a common word. I’d get false positives all of the time. I’d advise Key to change his name but I don’t think that he’d consider it to be for a good cause]

  14. vto 14

    Yes I know r0b, it is all a bit smelly imo. And won’t work. Reactive reactionaries running around like headless chooks in The Great Panic of 2008.

    But giving them (govts, particular the US) the benefit of the doubt – what other alternatives did they have other than letting those organisations fail? Curious..

  15. Westminster 15

    Not trying to threadjack this in a new direction…and it’s kind of apropos, but I am killing myself with laughter looking at Farrar’s desperate attempts to peddle Key’s bumbles at his post-Cabinet press conference and comments on the OCR. Apparently, it’s all a question of style and newness. Perhaps we should have a ninety day probationary period, like the Nats want for workers, for inexperienced boobs paying their way into the PM’s job. Gone by February! I guess we’re going to have to get accept all the consequences arising from the media’s dull-headed meme that it was “time for change”.

  16. Pascal's bookie 16

    “…what other alternatives did they have other than letting those organisations fail?”

    Beats me, but ummm, going forward, I should hope that regulators take the position that ‘too big to fail’ means ‘too big to exist’ and widen the focus of the monopoly busting machinery.

  17. Phil 17

    Graeme/Steve,

    Saul Eslake, ANZ Australia chief economist, recently circulated a piece that provided an explanation of the measurement of a depression, based on generally accepted economic/statistical conventions:

    a ‘depression’ is either a decline in real GDP of more than 10%, or a contraction in real GDP which lasts more than three, or four, years

    In NZ’s case, we aren’t even remotely close to either of these conditions.

  18. Phil 18

    ‘too big to fail’ means ‘too big to exist’

    … and we’ll include governments in that definition
    🙂

  19. lukas 19

    [lprent: It is a lot harder to get a machine to discriminate on such a common word. I’d get false positives all of the time. I’d advise Key to change his name but I don’t think that he’d consider it to be for a good cause]

    heh fair enough

  20. Tim Ellis 20

    SP wrote:

    John Key said yesterday that he expects growth in “the next financial year to be pretty close to zero’. That means he’s anticipating a depression.

    A bit of context here would be useful SP. Key indicated that was the advice coming from the Treasury.

    also, John, you’re in power now – drop the anti-Labour bullshit, you are responsible for your government, there’s no use saying Labour was crap too.

    I listened to the half hour press conference and John Key only mentioned Labour once, with respect to climate change issues, saying that Labour “talked a big game” but was all rhetoric. That isn’t blaming Labour. In thirty minutes, one reference to Labour isn’t “anti-Labour bullshit”.

    There is no small irony, SP, in a person who has spent the last year attacking John Key for every conceivable thing under the sun, criticising John Key for being “negative”. I hardly need to point out that you have consistently argued that Labour was responsible for the economic success of New Zealand’s growth during the 2000s, despite New Zealand merely riding a wave of world growth; you then said Labour was not to blame for the poor economic forecasts emerging as a result of the financial crisis, but now you are hinting that National will be to blame for a possible economic depression.

    You are right on one point, though. National is responsible for coming up with a range of response measures given the depressed economic outlook. Those measures are likely to be detailed in the next couple of weeks. Let’s wait and see what they involve. Given your spirit of positivity SP, will you analyse the measures coming from the National government impartially and reasonably, or will you see it as an opportunity to trash National no matter what measures are announced?

    I’d like to see some reasoned, fair, non-partisan and unhysterical analysis from you on that SP. It would make a fresh change on previous form.

  21. rjs131. No, a depression is usually technicaly defined as four or more constructive quarters of negative growth. Not emotive, knowledgable.

    Nick. Well, Key has attacked this site by name a few times, so either he’s reading or someone is teling him what is written.

  22. why is the edit function not working now? I can’t edit my comment above

    Phil, Graeme, seen your comments now. I’ve heard a depression defined as four consecutive quarters but there are other definitions too. I’ll change the post.

  23. Chris G 23

    TE,

    Why do we all have to be so non-partisan all of a sudden? Particularly, a labour movement blog?

    Speaking of partisan and all its associated words (bipartisan etc.) Never have I heard that word thrown around as much as it has been since the ‘economic crisis’ Or was it since McCain/Palin started throwing it round? TE your a culprit too.

    Tut tut.

  24. those who have responded that Labour blamed National for problems for nine years need to read more closely. Key is not blaming Labour, which could be valid depending on the circumstances, he is saying ‘well, yeah, we might be crap but Labour was worse’… that’s a useless response.

  25. ianmac 25

    Given the Election rhetoric I was sure that Key could give quite firm decisions about the economy, social needs, and so on. Surely it does not require a whole new bunch of thinking as though the policies were to be newly developed? I thought you knew John what you were going to do! Didn’t you? Really?

  26. Rocket Boy 26

    From Wikipedia:

    ‘A severe or prolonged recession is referred to as an economic depression. Although the distinction between a recession and a depression is not clearly defined, it is often said that a decline in GDP of more than 10% constitutes a depression.’

    Sure the next couple of years are going to be hard on a great many people but there is little to be gained by exaggerating the situation by calling a recession a depression.

    And SP if you think we are headed for a depression please give an example of one other respected economist or journalist who agrees with you.

  27. Rocket Boy 27

    OK, you have changed your article to read ‘serious recession’ rather than ‘depression’.

    Fair enough that you say ‘National is in charge now it is your responsibility’.

    The response will probably be an economic stimulus package with more government spending on things like infrastructure and some easing of tax levels. With a fall in interest rates and the fall in petrol prices those of us who hang on to our jobs should be OK.

    I see a recession as not necessarily a bad thing. It is like a ‘reboot’ of the economy, interest rates are pushed to more realistic levels, the exchange rate is more favourable to exporters (which is the real engine of the economy) and consumption is reduced as people start to live within their mains and not spend money they don’t have because they have seen the value of their house rise.

  28. Tim Ellis 28

    SP, it’s generally considered poor form to go and edit your posts after people have already started commenting on them. At least make a note of the fact you changed “depression”, which was the statement you’ve since justified, to “serious recession”.

    Ianmac, getting official advice and fleshing out of detail on National’s policy for a couple of weeks doesn’t seem like a problem to me. These are complex issues, where a lot of detail needs to be defined. Labour went into the election promising a “mini budget” at around the same time as National’s policy package, and yet Labour had the officials at their disposal to work on the detail before the election.

    Or could it be that you are holding National to a much more rigorous standard than you held Labour?

  29. deemac 29

    Rod Oram on Radio NZ today described the Nat govt’s responses to the economic crisis as “clearly inadequate”. Perhaps the trolls would like to denounce him as “petty” too?
    Interestingly, also on radio NZ, Laile Harre alerted us yesterday morning that the Business NZ briefing paper to the new govt ascribed the economic crisis to TOO MUCH govt intervention, despite every reputable commentator in the world accepting the opposite. So the pre-election friendly face of John Key (we won’t change much) is now in danger of by being replaced by what big business actually want, ie a bonfire of all the regs that protect Joe Public.

  30. deemac 30

    PS Tim Ellis should note that SP announced he was going to respond to comments by amending his post, so far from being “poor form” it was an acceptance that he could have worded it better. Unlike the trolls here who never give an inch – mainly because they aren’t actually engaged in debate or listening to anyone else.

  31. Tim Ellis 31

    deemac, I have not seen Rod Oram praise National ever. Not once.

    I do remember him praising the Knowledge Wave, though. And Closing the Gap. And Sustainability. And getting into the top half of the OECD. And throwing huge amounts of money at Industry New Zealand as the “economic powerhouse”, and throwing large amounts at Trade New Zealand.

    Oram seems to have gone silent on all those points, though. Seems he was very happy to sign up to Labour’s rhetoric whenever it suited him. I’m not very disappointed that Oram’s unhappy with the government’s response so far, particularly since the government’s response hasn’t been announced yet.

  32. vto 32

    deemac Rod Oram is one of the most overrated commentators around.

    He’s always saying “business needs to do this, business needs to do that”. Talk about naive – business does what business needs to do already. If they don’t need to do something then generally they won’t. If they do need to then they do. Oram often appears to have some flaws in his understanding of what guides business and what its purpose is.

  33. Tim. I accept the criticisms others have made – I as going off a definition of a depression as 4 consective quarters of contraction equals a depression, others have put up good points against that. The mature thing to do is change the wording to something more accurate and less needlessly contraversial.

  34. Tim Ellis 34

    Fair enough SP, I don’t think there was anything dishonest about changing the wording as you did, but if people have already commented on the wording, if you go and change it then the comments lose their context. A better idea might be to put as a an edit at the bottom of your post something like:

    “UPDATE: As others have pointed out, John Key has not said he’s anticipating a depression, since the technical definition of a depression is X. I should make it clear that Key is anticipating a serious recession.”

  35. rave 35

    vto:

    National’s response to the crisis is “clearly inadequate” in Oram’s opinion.

    He obviously agrees that your ‘non-response’ is an inadequate response, compared with an adequate response.

    Oram’s advice to NZ business is to “add value”. That has been the basis of his support for Labour’s policies in that direction such as the ‘knowledge wave’.

    As to those in business needing such advice all we have to do is look at the woeful Fonterra which takes the easy road with a JV in China and does not take responsibility for testing the milk. Such lack of quality control would not be acceptable in a NZ cowshed. Adding value does not mean adding poison. Yet this is the standard in NZ.

    Business decisions are made by boards for the benefit of one company only. Take FC and Formica. They are inherently risky and usually the losses are carried by the workers and small shareholders while the owners survive. There is no concept of social responsibility or sustainability other than greenwashing or windowdressing informing these decisions.

    What we now have is a government whose allegiance is to the banks and financiers rather than producers of value. It wants to cut taxes and social spending to attract big bucks speculating in existing values by mergers and acquisitions, and big infrastructure products not held back by the ETS or RMA. Social responsibility and sustainability are out the window.

    Oram to his credit is an advocate for an intelligent, socially and environmentally responsible brand of capitalism that does least damage to society and nature as it winds down its historic mission to prepare the way for socialism.

  36. vto 36

    rave, I agree with your last paragraph that that is what Oram is. My point was that he seems to think that business should be doing non-business things to lead towards his version of ‘the way’, which is a way which encompasses not just business but other facets such as community, government, foreign policy etc. As such he thinks business should be taking on non-business attributes or activites to achieve his version of utopia.

    So when he says business should do this or that, he is saying they should do things outside of their business and that is naive to expect that. He tends to berate them for not doing these things – again, naive. And a bit “I know best … da da da”.

    Your example of “Oram’s advice to NZ business is to “add value’. ” is a good example. It doesn’t seem to occur to him that perhaps the reason some businesses don’t “add value” or say “develop export markets” is because they don’t need to or want to. Perhaps they are quite happy as they are. But he thinks they are doing the wrong thing.

    Perhaps he just needs to rephrase how he presents his theories so it doesn’t sound so arrogant and frankly a little ignorant.

  37. Billy 37

    “That means he’s anticipating a serious recession. That’s our national wealth shrinking for two years, even as the population continues to grow – a smaller pie for more people to share.”

    I blame the failed policies of the past.

  38. Billy 38

    Lyn,

    What gives? On my front page the comments down the right hand side stop with Tane’s of 9.21 am?

  39. Tim Ellis,

    I have not seen Rod Oram praise National ever

    In fairness to RO wouldn’t there be a need for him to do so..?

    So how does your added:-

    I’m not very disappointed that Oram’s unhappy with the government’s response so far, particularly since the government’s response hasn’t been announced yet.

    add up..

    Or am I looking at an author of storybook wisdom.?

  40. Tim Ellis 40

    northpaw,

    Rod Oram consistently was the a loud cheerleader for the Labour government’s rhetoric. He championed the Knowledge Wave, Closing the Gaps, the rise of Industry New Zealand, the jobs machine “powerhouse” that was supposed to be Jim Anderton’s Ministry of Economic Development, and the Labour Government’s announcements to raise New Zealand to the top half of the OECD by 2012.

    All of those initiatives fell flat and the rhetoric died out a few years after they were announced. Likewise the flagship “sustainability” policies would have–nice grand plans, but the rhetoric wasn’t matched by action.

    I agree, there wouldn’t be an expectation that Rod Oram should, as a business commentator, champion government rhetoric. Except he made a virtue out of doing exactly that for the Labour Government.

    What did the Labour Government announce, before the election, as its response to the economic crisis? Ah, yes, a “mini-budget” timed for sometime later this month. In other words, Labour’s response was an announcement of future announcements.

    Rod Oram holds National to quite different standards than he held Labour. That’s fair enough. But let’s not pretend he’s an impartial business guru.

  41. Tim Ellis,

    thank you for your response.. yet to the point — all of RO’s government-related commentary for the past nine years could be construed as the “Labour government’s” (as you put it). That would not constitute an “exception” let alone a “virtue”..

    I’d ask you to recall the merit of your own earlier summation and balance it with truism: beauty lies in the eye of the beholder. To wit: it would add up per your singular pov from your position.

    Making for valid criticism though hardly fairness.

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