Neoliberalism bringing US to its knees
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- Date published:
10:10 am, September 22nd, 2010 - 145 comments
Categories: class war, public services, tax -
Tags: plutocracy
EXiled Online put me on to an article from Canada’s MacLean’s magazine titled ‘Third World America’ which begins:
In February, the board of commissioners of Ohio’s Ashtabula County faced a scene familiar to local governments across America: a budget shortfall. They began to cut spending and reduced the sheriff’s budget by 20 per cent. A law enforcement agency staff that only a few years ago numbered 112, and had subsequently been pared down to 70, was cut again to 49 people and just one squad car for a county of 1,900 sq. km along the shore of Lake Erie. The sheriff’s department adapted. “We have no patrol units. There is no one on the streets. We respond to only crimes in progress. We don’t respond to property crimes,” deputy sheriff Ron Fenton told Maclean’s. The county once had a “very proactive” detective division in narcotics. Now, there is no detective division. “We are down to one evidence officer and he just runs the evidence room in case someone wants to claim property,” said Fenton. “People are getting property stolen, their houses broken into, and there is no one investigating. We are basically just writing up a report for the insurance company.”
How have things got this bad? How has the world’s superpower suddenly become so poor that its police forces are crumbling?
Well, it hasn’t. US GDP per capita was $45,600 in 2009, down from a peak of $46,900 in 2008. That 2.8% drop is breathtakingly sharp but it still leaves a country with enormous wealth (NZ’s comparable GDP per capita was $29,200 in 2008).
The real issue is where all that wealth is going to. Since the neo-liberal revolution, governments have cut tax on the wealthy again and again. In good times, surpluses are taken as a reason to cut taxes on the rich. In recession, the solution to economic woe is tax cuts for, you guessed it, the rich. The result is that more and more wealth is piling into fewer and fewer hands, and governments at all levels on a knife edge with chronic underfunding and ballooning debt.
The typical American worker’s wages are still where they were in the 1970s. To fund higher consumption they increased their debt, borrowing against the value of their houses, which was only a viable strategy until housing prices inevitably collapsed. Now, it is the American middleclass and the enourmous underclass who are suffering the job and wage cuts, and getting it in the back as governments slash the social wage (public services).
Meanwhile, the rich are sitting pretty, taking an ever larger slice of a shrinking cake.
New Zealand was fortunate enough to have nine years of a Labour-led government that arrested, and partially reversed, the neo-liberal agenda. But now the neo-libs are back in charge and implementing their same old failed agenda. The rich are getting huge tax cuts while public services are being cut. Government debt is rising and the Nats are making it worse by borrowing a billion dollars over the coming four years to fund tax cuts for the rich. In the end, that debt has to be repaid somehow. While the neolibs are in charge the solution will never be higher taxes, it’ll be service cuts, which are just the same as a tax hike for families who are forced to pay out of pocket for services that were publicly provided (or go without).
Some of the passages in the McLean’s article are so familiar you can just take out America and put in New Zealand in its place:
“We have been involved for three decades now in paring back public commitments and public spending, and that started with the Reagan revolution. We are living with the outcomes and consequences,”
“As we watch the middle class crumbling, for me this is a major indication that we are turning into a Third World country,”… “The distinguishing characteristic of the Third World country is you have the people at the top and the rest—you don’t have a thriving middle class”
“The American dream was already based on the idea you could work hard and do well and your children will do better. Now we are confronted with downward mobility across the board. You have the phenomenon of unprecedented numbers of college grads who can’t get jobs.” The current public sector cutbacks in education and infrastructure will only make things worse, Huffington says. “You are both hurting people in the present, and basically undercutting your economic growth and prosperity in the future.”
“the Chinese are building world-record trains and we’re taxing kids who go to school!” [ECE cuts anyone?]
“Class sizes are being increased and teachers are being laid off. School districts around the country are cutting the school day or the school week or the school year—effectively furloughing students.”
and if we insist on continuing down the neo-liberal path – the aim of which is to underfund government and cut spending to the point where the State can be ‘drowned in a bathtub’ – then we’ll have no-one to blame but ourselves when we face the same consequences as America:
“The city of Dallas is not picking up litter in public parks. Flint, Mich., laid off 23 of 88 firefighters and closed two fire stations. In some places it’s almost literally the dark ages: the city of Shelton in Washington state decided to follow the example of numerous other localities and last week turned off 114 of its 860 street lights. Others have axed bus service and cut back on library hours.”
“When we come out of this recession we’re going to see government functioning very differently,” says Byers. “We are seeing more public-private partnership than we ever had for things like recreation and parks. We are seeing some of them privatize libraries. They lease the library to a private corporation that employs the workers who don’t carry retirement or health benefits.” Or they could wind up like Hood River County, Ore., which in August closed its three libraries altogether.Some governments are looking for creative ways to replace plummeting property and sales tax revenues. Facing a US$1-billion budget shortfall, Montgomery County in Maryland appealed for corporate sponsors to step up and adopt porta-potties in its public parks. In the end, the privies were saved by a combination of park employees taking early retirement, a few private sponsorships, and a negotiated discount from the supplier, Don’s Johns. Meanwhile, Montgomery County’s school system, banking on its reputation for high standards and test scores, took the unusual step of selling its curriculum to a private textbook publisher, Pearson, for US$2.3 million and royalties of up to three per cent on sales. As part of the deal, county classrooms can be used as “showrooms”—which critics said effectively turns students and teachers into salesmen for a corporation. But the superintendent, Jerry Weast, told the Washington Post, “I tend to look at this from the perspective that we are broke.”
“Back to the Stone Age” is the name of a seminar organized in March by civil engineers at Indiana’s Purdue University for local county supervisors interested in saving money by breaking up paved roads and turning them back to gravel. … The state of Michigan had similar conversations. It has converted at least 50 miles of paved road to gravel in the last few years.
Despite its position as the world’s unrivalled superpower, international comparisons show the U.S. slipping on a number of fronts. On education, the United States has been falling behind, in everything from science and engineering to basic literacy. The U.S. once had the world’s highest proportion of young adults with post-secondary degrees; now it ranks 12th, according to the College Board, an association of education institutions. (Canada is now number one.) In 2001, the U.S. ranked fourth in the world in per capita broadband Internet use; it now ranks 15th out of 30 nations”
America has become a plutocracy again, where a tiny elite control the vast bulk of the wealth and the rest have to compete over less and less. Plutocracies are socially unstable (note the rise of reactionaries in the US) and they culminate in economic melt-down. Not to mention they’re just plain unjust.
Yesterday on Breakfast, some airhead neoliberal academic was on claiming a ‘tall-poppy’ syndrome was holding New Zealand back and we should be more like the US. The US where councils can’t afford to run street lights and education is being cut to the bone and the wealthy elite fiddle while the country burns around them? Yeah, excuse me if I don’t think we should follow that path any further than we have.
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National has only been in power for a year, but everywhere you look, its choices are taking New Zealand a long way backwards. In no particular order, here are the National Government's Top 50 Greatest Misses of its first year in power. ...2 days ago - Release: Minister’s plan for tertiary sector a backwards step
Returning to the model that was failing for most polytechnics and Institutes of Technology is not the answer. ...3 days ago
- Release: National buries 1019 planned homes
It’s been revealed that National has cancelled 60 percent of its housing projects planned before mid-2025 amidst housing woes. ...3 days ago
- Release: Rule-Czar bill a right-wing power grab
The Government is quietly undertaking consultation on the dangerous Regulatory Standards Bill over the Christmas period to avoid too much attention. ...3 days ago
- Release: Why not both? Luxon shuns Waitangi celebrations
Prime Minister Christopher Luxon is running away from problems of his own creation, with his decision not to go to Waitangi. ...4 days ago
- Govt’s ‘free speech’ legislation stokes fear, not freedom
The Government’s planned changes to the freedom of speech obligations of universities is little more than a front for stoking the political fires of disinformation and fear, placing teachers and students in the crosshairs. ...4 days ago - Release: Nicola Willis spirals country deeper into recession
The economy shrank 1% this quarter and New Zealand has tumbled into the depths of a recession of Nicola Willis’ making. ...4 days ago
- Release: Hikes for company directors but not ordinary Kiwis
Working people are going backwards while company directors are being given huge pay hikes. ...5 days ago
- ECE no place to cut corners
The Ministry of Regulation’s report into Early Childhood Education (ECE) in Aotearoa raises serious concerns about the possibility of lowering qualification requirements, undermining quality and risking worse outcomes for tamariki, whānau, and kaiako. ...5 days ago
- Release: Strengthening Justice Services for New Zealanders
A Bill to modernise the role of Justices of the Peace (JP), ensuring they remain active in their communities and connected with other JPs, has been put into the ballot. ...5 days ago
- Release: Labour will continue fight against destructive projects
Labour will continue to fight unsustainable and destructive projects that are able to leap-frog environment protection under National’s Fast-track Approvals Bill. ...5 days ago
- Green Government will revoke dodgy fast-track projects
The Green Party has warned that a Green Government will revoke the consents of companies who override environmental protections as part of Fast-Track legislation being passed today. ...5 days ago
- Government for the wealthy keeps pushing austerity
The Green Party says the Half Year Economic and Fiscal Update shows how the Government is failing to address the massive social and infrastructure deficits our country faces. ...6 days ago
- Release: Visa changes let migrant workers be paid less
The Government’s latest move to reduce the earnings of migrant workers will not only hurt migrants but it will drive down the wages of Kiwi workers. ...6 days ago
- Release: Nightmare before Christmas for Nicola Willis
With more debt and a larger deficit, Nicola Willis’ reputation is in tatters after her failure to return the Government’s books to surplus. ...6 days ago
- Warning to Fast-Track Applicants – ‘Exploit the Whenua, Face the Consequences’
Te Pāti Māori has this morning issued a stern warning to Fast-Track applicants with interests in mining, pledging to hold them accountable through retrospective liability and to immediately revoke Fast-Track consents under a future Te Pāti Māori government. This warning comes ahead of today’s third reading of the Fast-Track Approvals ...6 days ago
- Release: Govt cuts wages for lowest paid NZers… again
For the second year running, the government has effectively cut wages for the lowest paid workers in New Zealand. ...6 days ago
- Govt’s miserly 1.5% minimum wage will take workers backwards
The Government’s announcement today of a 1.5 per cent increase to minimum wage is another blow for workers, with inflation projected to exceed the increase, meaning it’s a real terms pay reduction for many. ...6 days ago
- Release: Govt shirking responsibility for rate hikes
All the Government has achieved from its announcement today is to continue to push responsibility back on councils for its own lack of action to help bring down skyrocketing rates. ...6 days ago
- Luxon’s ‘localism’ strikes again
The Government has used its final post-Cabinet press conference of the year to punch down on local government without offering any credible solutions to the issues our councils are facing. ...6 days ago
- Release: Govt breaks promise on EV chargers
The Government has failed to keep its promise to ‘super charge’ the EV network, delivering just 292 chargers - less than half of the 670 chargers needed to meet its target. ...7 days ago
- Greens call for end to subsidies for Methanex
The Green Party is calling for the Government to stop subsidising the largest user of the country’s gas supplies, Methanex, following a report highlighting the multi-national’s disproportionate influence on energy prices in Aotearoa. ...7 days ago
- Govt child poverty targets allow for increase in poverty
The Green Party is appalled with the Government’s new child poverty targets that are based on a new ‘persistent poverty’ measure that could be met even with an increase in child poverty. ...1 week ago
- Release: Four weeks annual leave under threat
The Government’s attack on workers continues with news it is scrapping work on the Holidays Act. ...1 week ago
- Govt’s emissions plan for measly 1% reduction
New independent analysis has revealed that the Government’s Emissions Reduction Plan (ERP) will reduce emissions by a measly 1 per cent by 2030, failing to set us up for the future and meeting upcoming targets. ...1 week ago
- Greens stand in solidarity with Whakaata Māori on sad day
The loss of 27 kaimahi at Whakaata Māori and the end of its daily news bulletin is a sad day for Māori media and another step backwards for Te Tiriti o Waitangi justice. ...1 week ago
- Sanctions regime to create more hardship for families
Yesterday the Government passed cruel legislation through first reading to establish a new beneficiary sanction regime that will ultimately mean more households cannot afford the basic essentials. ...1 week ago
- Govt gifts renters housing anxiety for Christmas
Today's passing of the Government's Residential Tenancies Amendment Bill–which allows landlords to end tenancies with no reason–ignores the voice of the people and leaves renters in limbo ahead of the festive season. ...1 week ago
- Release: National Party urged to support modern slavery legislation
Labour is urging the Prime Minister to walk the talk and support legislation combating modern slavery. ...2 weeks ago
- Release: Labour has lost confidence in the Speaker
The Speaker of the New Zealand Parliament made an unprecedented decision on the government amendment to the Fast Track Approvals Bill last night. ...2 weeks ago
- One year on, still no progress on new ferries
Today’s announcement from the Government on its plan for new ferries throws more uncertainty on the future of the country’s rail network. ...2 weeks ago
- Release: Nicola Willis’ smaller ferries will cost more
After wasting a year, Nicola Willis has delivered a worse deal for the Cook Strait ferries that will end up being more expensive and take longer to arrive. ...2 weeks ago
- Bill to sanction unlawful occupation of Palestine
Green Party co-leader Chlöe Swarbrick has today launched a Member’s Bill to sanction Israel for its unlawful presence in the Occupied Palestinian Territory, as the All Out For Gaza rally reaches Parliament. ...2 weeks ago
- Release: Labour fully supports greyhound racing ban
The Government has done the right thing in moving to ban greyhound racing. ...2 weeks ago
- Greyhound racing industry ban marks new era for animal welfare
After years of advocacy, the Green Party is very happy to hear the Government has listened to our collective voices and announced the closure of the greyhound racing industry, by 1 August 2026. ...2 weeks ago
- Rangatahi voices must be centred in Government’s Relationship and Sexuality Education refresh
In response to a new report from ERO, the Government has acknowledged the urgent need for consistency across the curriculum for Relationship and Sexuality Education (RSE) in schools. ...2 weeks ago
- Govt introduces archaic anti-worker legislation
The Green Party is appalled at the Government introducing legislation that will make it easier to penalise workers fighting for better pay and conditions. ...2 weeks ago
- Winston Peters – Kinleith Mill Speech
Thank you for the invitation to speak with you tonight on behalf of the political party I belong to - which is New Zealand First. As we have heard before this evening the Kinleith Mill is proposing to reduce operations by focusing on pulp and discontinuing “lossmaking paper production”. They say that they are currently consulting on the plan to permanently shut ...2 weeks ago - Swarbrick calls on Auckland Mayor to end delay of revival of St James Theatre
Auckland Central MP, Chlöe Swarbrick, has written to Mayor Wayne Brown requesting he stop the unnecessary delays on St James Theatre’s restoration. ...2 weeks ago
- He Ara Anamata: Greens launch Emissions Reduction Plan
Today, the Green Party of Aotearoa proudly unveils its new Emissions Reduction Plan–He Ara Anamata–a blueprint reimagining our collective future. ...2 weeks ago
- Internationally-trained doctors jump at chance to boost health workforce
Health Minister Dr Shane Reti says Health New Zealand will move swiftly to support dozens of internationally-trained doctors already in New Zealand on their journey to employment here, after a tripling of sought-after examination places. “The Medical Council has delivered great news for hardworking overseas doctors who want to contribute ...18 hours ago - PM appoints business leader to APEC Business Advisory Council
Prime Minister Christopher Luxon has appointed Sarah Ottrey to the APEC Business Advisory Council (ABAC). “At my first APEC Summit in Lima, I experienced firsthand the role that ABAC plays in guaranteeing political leaders hear the voice of business,” Mr Luxon says. “New Zealand’s ABAC representatives are very well respected and ...3 days ago
- New intelligence oversight appointments
Prime Minister Christopher Luxon has announced four appointments to New Zealand’s intelligence oversight functions. The Honourable Robert Dobson KC has been appointed Chief Commissioner of Intelligence Warrants, and the Honourable Brendan Brown KC has been appointed as a Commissioner of Intelligence Warrants. The appointments of Hon Robert Dobson and Hon ...3 days ago
- New housing developments able to progress more quickly
Improvements in the average time it takes to process survey and title applications means housing developments can progress more quickly, Minister for Land Information Chris Penk says. “The government is resolutely focused on improving the building and construction pipeline,” Mr Penk says. “Applications to issue titles and subdivide land are ...3 days ago
- Actions to speed up air travel delivering results
The Government’s measures to reduce airport wait times, and better transparency around flight disruptions is delivering encouraging early results for passengers ahead of the busy summer period, Transport Minister Simeon Brown says. “Improving the efficiency of air travel is a priority for the Government to give passengers a smoother, more reliable ...3 days ago
- Ending contracted emergency housing in Rotorua
The Government today announced the intended closure of the Apollo Hotel as Contracted Emergency Housing (CEH) in Rotorua, Associate Housing Minister Tama Potaka says. This follows a 30 per cent reduction in the number of households in CEH in Rotorua since National came into Government. “Our focus is on ending CEH in the Whakarewarewa area starting ...3 days ago
- Vocational education and training decisions support return to regions
The Government will reshape vocational education and training to return decision making to regions and enable greater industry input into work-based learning Tertiary Education and Skills Minister, Penny Simmonds says. “The redesigned system will better meet the needs of learners, industry, and the economy. It includes re-establishing regional polytechnics that ...3 days ago
- Reducing the environmental impact of synthetic refrigerants
The Government is taking action to better manage synthetic refrigerants and reduce emissions caused by greenhouse gases found in heating and cooling products, Environment Minister Penny Simmonds says. “Regulations will be drafted to support a product stewardship scheme for synthetic refrigerants, Ms. Simmonds says. “Synthetic refrigerants are found in a ...3 days ago
- Ngāruawāhia section of Waikato Expressway back to 4 lanes for Christmas
People travelling on State Highway 1 north of Hamilton will be relieved that remedial works and safety improvements on the Ngāruawāhia section of the Waikato Expressway were finished today, with all lanes now open to traffic, Transport Minister Simeon Brown says.“I would like to acknowledge the patience of road users ...3 days ago
- Appointments to the ENZ board
Tertiary Education and Skills Minister, Penny Simmonds, has announced a new appointment to the board of Education New Zealand (ENZ). Dr Erik Lithander has been appointed as a new member of the ENZ board for a three-year term until 30 January 2028. “I would like to welcome Dr Erik Lithander to the ...4 days ago
- Government to celebrate Waitangi Day around NZ
The Government will have senior representatives at Waitangi Day events around the country, including at the Waitangi Treaty Grounds, but next year Prime Minister Christopher Luxon has chosen to take part in celebrations elsewhere. “It has always been my intention to celebrate Waitangi Day around the country with different ...4 days ago
- More gangs added to Gangs Act list
Two more criminal gangs will be subject to the raft of laws passed by the Coalition Government that give Police more powers to disrupt gang activity, and the intimidation they impose in our communities, Police Minister Mark Mitchell says. Following an Order passed by Cabinet, from 3 February 2025 the ...4 days ago
- Judicial appointment announced
Attorney-General Judith Collins today announced the appointment of Justice Christian Whata as a Judge of the Court of Appeal. Justice Whata’s appointment as a Judge of the Court of Appeal will take effect on 1 August 2025 and fill a vacancy created by the retirement of Hon Justice David Goddard on ...4 days ago
- GDP data highlights importance of growth
The latest economic figures highlight the importance of the steps the Government has taken to restore respect for taxpayers’ money and drive economic growth, Finance Minister Nicola Willis says. Data released today by Stats NZ shows Gross Domestic Product fell 1 per cent in the September quarter. “Treasury and most ...4 days ago
- Strengthening Free Speech in Universities
Tertiary Education and Skills Minister Penny Simmonds and Associate Minister of Education David Seymour today announced legislation changes to strengthen freedom of speech obligations on universities. “Freedom of speech is fundamental to the concept of academic freedom and there is concern that universities seem to be taking a more risk-averse ...4 days ago
- Launch of Emergency Cellular Priority Service
Police Minister, Mark Mitchell, and Internal Affairs Minister, Brooke van Velden, today launched a further Public Safety Network cellular service that alongside last year’s Cellular Roaming roll-out, puts globally-leading cellular communications capability into the hands of our emergency responders. The Public Safety Network’s new Cellular Priority service means Police, Wellington ...4 days ago
- Minister reopens Mangamuka Gorge
State Highway 1 through the Mangamuka Gorge has officially reopened today, providing a critical link for Northlanders and offering much-needed relief ahead of the busy summer period, Transport Minister Simeon Brown says.“The Mangamuka Gorge is a vital route for Northland, carrying around 1,300 vehicles per day and connecting the Far ...4 days ago
- Funding confirmed for second Ashburton Bridge
The Government has welcomed decisions by the NZ Transport Agency (NZTA) and Ashburton District Council confirming funding to boost resilience in the Canterbury region, with construction on a second Ashburton Bridge expected to begin in 2026, Transport Minister Simeon Brown says. “Delivering a second Ashburton Bridge to improve resilience and ...4 days ago
- Government boosts support for avian influenza response
The Government is backing the response into high pathogenic avian influenza (HPAI) in Otago, Biosecurity Minister Andrew Hoggard says. “Cabinet has approved new funding of $20 million to enable MPI to meet unbudgeted ongoing expenses associated with the H7N6 response including rigorous scientific testing of samples at the enhanced PC3 ...4 days ago
- Levelling the playing field for media advertising
Legislation that will repeal all advertising restrictions for broadcasters on Sundays and public holidays has passed through first reading in Parliament today, Media Minister Paul Goldsmith says. “As a growing share of audiences get their news and entertainment from streaming services, these restrictions have become increasingly redundant. New Zealand on ...5 days ago
- Inspector-General of Defence appointed
Today the House agreed to Brendan Horsley being appointed Inspector-General of Defence, Justice Minister Paul Goldsmith says. “Mr Horsley’s experience will be invaluable in overseeing the establishment of the new office and its support networks. “He is currently Inspector-General of Intelligence and Security, having held that role since June 2020. ...5 days ago
- Fire and Emergency New Zealand final levy rates confirmed
Minister of Internal Affairs Brooke van Velden says the Government has agreed to the final regulations for the levy on insurance contracts that will fund Fire and Emergency New Zealand from July 2026. “Earlier this year the Government agreed to a 2.2 percent increase to the rate of levy. Fire ...5 days ago
- More AML relief on the way for Kiwi businesses
The Government is delivering regulatory relief for New Zealand businesses through changes to the Anti-Money Laundering and Countering Financing of Terrorism Act. “The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill, which was introduced today, is the second Bill – the other being the Statutes Amendment Bill - that ...5 days ago
- Hawke’s Bay Expressway moving at pace
Transport Minister Simeon Brown has welcomed further progress on the Hawke’s Bay Expressway Road of National Significance (RoNS), with the NZ Transport Agency (NZTA) Board approving funding for the detailed design of Stage 1, paving the way for main works construction to begin in late 2025.“The Government is moving at ...5 days ago
- Government seeks partnerships to plant trees on Crown-owned-land
The Government today released a request for information (RFI) to seeking interest in partnerships to plant trees on Crown-owned land with low farming and conservation value (excluding National Parks) Forestry Minister Todd McClay announced. “Planting trees on Crown-owned land will drive economic growth by creating more forestry jobs in our regions, providing more wood ...5 days ago
- Wide ranging legislation to make justice system more efficient
Court timeliness, access to justice, and improving the quality of existing regulation are the focus of a series of law changes introduced to Parliament today by Associate Minister of Justice Nicole McKee. The three Bills in the Regulatory Systems (Justice) Amendment Bill package each improve a different part of the ...5 days ago
- Diverse skills in community trust appointments
A total of 41 appointments and reappointments have been made to the 12 community trusts around New Zealand that serve their regions, Associate Finance Minister Shane Jones says. “These trusts, and the communities they serve from the Far North to the deep south, will benefit from the rich experience, knowledge, ...5 days ago
- Torture redress for survivors of the Lake Alice Unit
The Government has confirmed how it will provide redress to survivors who were tortured at the Lake Alice Psychiatric Hospital Child and Adolescent Unit (the Lake Alice Unit). “The Royal Commission of Inquiry into Abuse in Care found that many of the 362 children who went through the Lake Alice Unit between 1972 and ...5 days ago
- A busy year in the House
It has been a busy, productive year in the House as the coalition Government works hard to get New Zealand back on track, Leader of the House Chris Bishop says. “This Government promised to rebuild the economy, restore law and order and reduce the cost of living. Our record this ...5 days ago
- Consultation opens on working with engineered stone
“Accelerated silicosis is an emerging occupational disease caused by unsafe work such as engineered stone benchtops. I am running a standalone consultation on engineered stone to understand what the industry is currently doing to manage the risks, and whether further regulatory intervention is needed,” says Workplace Relations and Safety Minister ...5 days ago
- Greater reporting on Treaty settlement commitments
Mehemea he pai mō te tangata, mahia – if it’s good for the people, get on with it. Enhanced reporting on the public sector’s delivery of Treaty settlement commitments will help improve outcomes for Māori and all New Zealanders, Māori Crown Relations Minister Tama Potaka says. Compiled together for the ...5 days ago
- New appointments to the Charities Registration Board
Mr Roger Holmes Miller and Ms Tarita Hutchinson have been appointed to the Charities Registration Board, Community and Voluntary Sector Minister Louise Upston says. “I would like to welcome the new members joining the Charities Registration Board. “The appointment of Ms Hutchinson and Mr Miller will strengthen the Board’s capacity ...5 days ago
- Building consent processing times improve
More building consent and code compliance applications are being processed within the statutory timeframe since the Government required councils to submit quarterly data, Building and Construction Minister Chris Penk says. “In the midst of a housing shortage we need to look at every step of the build process for efficiencies ...5 days ago
- Faster access to support through Innovation Fund
Mental Health Minister Matt Doocey is proud to announce the first three recipients of the Government’s $10 million Mental Health and Addiction Community Sector Innovation Fund which will enable more Kiwis faster access to mental health and addiction support. “This fund is part of the Government’s commitment to investing in ...5 days ago
- New Zealand to assist Vanuatu on earthquake response
New Zealand is providing Vanuatu assistance following yesterday's devastating earthquake, Foreign Minister Winston Peters says. "Vanuatu is a member of our Pacific family and we are supporting it in this time of acute need," Mr Peters says. "Our thoughts are with the people of Vanuatu, and we will be ...5 days ago
- Government takes steps to reduce card fees for Kiwis
The Government welcomes the Commerce Commission’s plan to reduce card fees for Kiwis by an estimated $260 million a year, Commerce and Consumer Affairs Minister Andrew Bayly says.“The Government is relentlessly focused on reducing the cost of living, so Kiwis can keep more of their hard-earned income and live a ...5 days ago
- Review recommends ECE regulation shakeup
Regulation Minister David Seymour has welcomed the Early Childhood Education (ECE) regulatory review report, the first major report from the Ministry for Regulation. The report makes 15 recommendations to modernise and simplify regulations across ECE so services can get on with what they do best – providing safe, high-quality care ...5 days ago
- Offshore Renewable Energy Bill passes first reading
The Government‘s Offshore Renewable Energy Bill to create a new regulatory regime that will enable firms to construct offshore wind generation has passed its first reading in Parliament, Energy Minister Simeon Brown says.“New Zealand currently does not have a regulatory regime for offshore renewable energy as the previous government failed ...5 days ago
- Local Government (Water Services) Bill passes first reading
Legislation to enable new water service delivery models that will drive critical investment in infrastructure has passed its first reading in Parliament, marking a significant step towards the delivery of Local Water Done Well, Local Government Minister Simeon Brown and Commerce and Consumer Affairs Minister Andrew Bayly say.“Councils and voters ...5 days ago
- Gene Technology Bill passes first reading
New Zealand is one step closer to reaping the benefits of gene technology with the passing of the first reading of the Gene Technology Bill, Science, Innovation and Technology Minister Judith Collins says. "This legislation will end New Zealand's near 30-year ban on gene technology outside the lab and is ...5 days ago
- Vanuatu quake: Warnings as bad weather threat looms for Port Vila
By , New Zealand’s Urban Search and Rescue (USAR) says impending bad weather for Port Vila is now the most significant post-quake hazard. A tropical low in the Coral Sea is expected to move into Vanuatu waters, bringing heavy rainfall. Authorities have issued warnings to people ...5 hours ago - Signs of the hīkoi: More than just ‘words on cardboard’
The placards seen at the Hīkoi mō Te Tiriti conveyed "huge kōrero with immediacy", expert says: "People know the power of the word." ...14 hours ago - A final Ode to .. King Luxon
Cosmic CatastropheThe year draws to a close.King Luxon has grown tired of the long eveningsListening to the dreary squabbling of his Triumvirate.He strolls up to the top floor of the PalaceTo consult with his Astronomer Royal.The Royal Telescope scans the skies,And King Luxon stares up into the heavensFrom the terrestrial ...22 hours ago - A hater and an enthusiast review The Royal Free by Carl Shuker
Spinoff editor Mad Chapman and books editor Claire Mabey debate Carl Shuker’s new novel about… an editor. Claire: Hello Mad, you just finished The Royal Free – overall impressions? Mad: Hi Claire, I literally just put the book down and I would have to say my immediate impression is ...23 hours ago - Survive to 25 (December, that is)
Christmas and its buildup are often lonely, hard and full of unreasonable expectations. Here’s how to make it to Jesus’s birthday and find the little bit of joy we all deserve. Have you found this year relentless? Has the latest Apple update “fucked up your life”? Have you lost two ...23 hours ago
- All I want for Christmas is modern day slavery legislation
Despite overwhelming public and corporate support, the government has stalled progress on a modern day slavery law. That puts us behind other countries – and makes Christmas a time of tragedy rather than joy, argues Shanti Mathias. Picture the scene on Christmas Day. Everyone replete with nice things to eat, ...23 hours ago
- Israeli-American historian describes attacks on Gaza as ‘war of annihilation’
Asia Pacific Report “It looks like Hiroshima. It looks like Germany at the end of World War Two,” says an Israeli-American historian and professor of holocaust and genocide studies at Brown University about the horrifying reality of Gaza. Professor Omer Bartov, has described Israel’s ongoing war on Gaza as an ...1 day ago
- NZ govt plans to make ‘heavy handed’ change to free speech rules for universities
The New Zealand government coalition is tweaking university regulations to curb what it says is an increasingly “risk-averse approach” to free speech. The proposed changes will set clear expectations on how universities should approach freedom of speech issues. Each university will then have to adopt a “freedom of speech statement” ...1 day ago
- Caitlin Johnstone: Where does the aggression really begin?
Report by Dr David Robie – Café Pacific. – COMMENTARY: By Caitlin Johnstone New York prosecutors have charged Luigi Mangione with “murder as an act of terrorism” in his alleged shooting of health insurance CEO Brian Thompson earlier this month. This news comes out at the same time as ...1 day ago
- OECD Report Highlights That More Is Needed
This report reflects that gap in our dealings overseas, and it shows that legislators, the public sector and businesses need to walk the talk. ...2 days ago - Government quietly scraps waste minimisation policies
The government has quietly cancelled plans to improve recycling and roll out a kerbside food scraps composting scheme. ...2 days ago
- MEAA welcomes News MAP funding ‘leg up’ for Australian journalism
Pacific Media Watch The union for Australian journalists has welcomed the delivery by the federal government of more than $150 million to support the sustainability of public interest journalism over the next four years. Combined with the announcement of the revamped News Bargaining Initiative, this could result in up to ...2 days ago
- Transmission Gully partnership breakdown will not hurt future public-private partnerships, Infrastru...
The roads partnership unravelled under a confidential settlement this week, meaning NZTA will now finish off what it had said was incomplete work. ...2 days ago
- Funding cuts to charity particularly felt over Christmas period
The number of people seeking help from Lifeline is expected to increase by 10 to 20 percent over Christmas. ...2 days ago
- Nelson Hospital conditions ‘unbearable’ – staff
One worker says the building is decrepit and falling down around them. ...2 days ago
- The Secret Diary of .. Luxon at Xmas
MONDAY“Merry Xmas, and praise the Lord,” said Sheriff Luxon, and smiled for the camera. There was a flash of smoke when the shutter pressed down on the magnesium powder. The sheriff had arranged for a photographer from the Dodge Gazette to attend a ceremony where he handed out food parcels to ...2 days ago
- Stand by for cricket’s Smash Palace
It’s a little under two months since the White Ferns shocked the cricketing world, deservedly taking home the T20 World Cup. Since then the trophy has had a tour around the country, five of the squad have played in the WBBL in Australia while most others have returned to domestic ...2 days ago
- Early-onset dementia under the microscope
Comment: If we say the word ‘dementia’, many will picture an older person struggling to remember the names of their loved ones, maybe a grandparent living out their final years in an aged care facility. Dementia can also occur in people younger than 65, but it can take time before ...2 days ago
- Keeping the pirates at bay: Should the Australian ‘Blocking Order’ case prompt a discussion in N...
Piracy is a reality of modern life – but copyright law has struggled to play catch-up for as long as the entertainment industry has existed. As far back as 1988, the House of Lords criticised copyright law’s conflict with the reality of human behaviour in the context of burning cassette ...2 days ago
- ‘We were as famous as Tom Cruise’: Craig Parker on 90s Shortland St fandom
As he makes a surprise return to Shortland Street, actor Craig Parker takes us through his life in television. Craig Parker has been a fixture on television in Aotearoa for nearly four decades. He had starring roles in iconic local series like Gloss, Mercy Peak and Diplomatic Immunity, featured in ...2 days ago
- ‘I prioritise the mission, not my health’: Adam McGrath’s perfect weekend playlist
The Ōtautahi musician shares the 10 tracks he loves to spin, including the folk classic that cured him of a ‘case of the give-ups’. When singer-songwriter Adam McGrath returns to Kumeu’s Auckland Folk Festival from January 24-27, he’s not planning on simply idling his way through – he wants the late ...2 days ago
- The rescue dog bringing joy to Christchurch retirement homes
Alex Casey spends an afternoon on the job with River, the rescue dog on a mission to spread joy to Ōtautahi rest homes. Almost everyone says it is never enough time. But River the rescue dog, a jet black huntaway border collie cross, has to keep a tight pace to ...2 days ago
- Fiji pro-Palestine nativity scene exposes Gaza as ‘hell on earth’ at Christmas
Asia Pacific Report Fiji activists have recreated the nativity scene at a solidarity for Palestine gathering in Fiji’s capital Suva just days before Christmas. The Fiji Women’s Crisis Centre and Fijians for Palestine Solidarity Network recreated the scene at the FWCC compound — a baby Jesus figurine lies amidst the ...2 days ago
- Vanuatu quake: ‘Our shop was flattened like a deck of cards’
By 1News Pacific correspondent Barbara Dreaver and 1News reporters A number of Kiwis have been successfully evacuated from Vanuatu after a devastating earthquake shook the Pacific island nation earlier this week. The death toll was still unclear, though at least 14 people were killed according to an earlier statement from ...2 days ago
- How diplomats have broken the law in NZ – and what happened next
A handful of foreign diplomats have misbehaved during their time here - and not all of them have been brought to justice. ...2 days ago
- Swim schools report sinking enrolments as downturn deepens
Being able to swim is often considered a life skill, but tough economic times are forcing many families to pull their children out of lessons. ...2 days ago
- ‘There will be deaths because of this’ – Warning over Health NZ IT cuts
A West Coast IT worker is warning patients will die as Health New Zealand aims to slash its data and digital staff. ...2 days ago
- Polytech sales possible but unlikely when Te Pūkenga disestablished – minister
In a surprise move, the sale of polytechnics will be on the table when the national institute of technology Te Pūkenga is disestablished. ...2 days ago
- Parliament’s final sitting day an insight into party factions
On Parliament's last day of the year, there was a rare glimpse of the factions within the major parties. ...3 days ago
- Former Labour MP, North Shore mayor Ann Hartley dies
Former Labour MP and mayor of Auckland's North Shore City Ann Hartley has died. ...3 days ago
- The closest thing Australian cartooning had to a prophet: the sometimes celebrated, sometimes contro...
Source: The Conversation (Au and NZ) – By Richard Scully, Professor in Modern History, University of New England Bunker. Image courtesy of Michael Leunig, CC BY-NC-SA Michael Leunig – who died in the early hours of Thursday December 19, surrounded by “his children, loved ones, and sunflowers” – was the ...3 days ago
- Labour moves Speaker from the ‘nice’ to ‘naughty’ list
Last week's fights with the Speaker over the Fast Track schedule may have changed the tone in Parliament. ...3 days ago
- Govt ends pilot programme for Māori and Pacific, sparking outrage
The Government announced the end of the programme that allowed Māori and Pacific people to acess bowel cancer screening at 50-years-old. ...3 days ago
- Parliament fits an extra morning into final sitting day
The House - On Parliament's last day of the year, there was the rare occurrence of a personal (conscience) vote on selling booze over the Easter weekend. While it didn't have the numbers to pass, it was a chance to get a rare glimpse of the fact ...3 days ago
- The Friday Poem: ‘Bejeweled log’ by Holly Fletcher
A new poem by Holly Fletcher. bejeweled log i was dreaming about wasps / wee darlings that followed me / ducking under objects / that i was fated to pickup / my fingers seeking / and meeting with tiny proboscis’s / but instead / i wake up / roll sideways ...3 days ago
- Sunglasses don’t just look good – they’re good for you too. Here’s how to choose the right p...
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Great work Marty.
Yawn if you think the solution to NZ’s woes is National or Labour or any of their petty tinkering around the edges you are a fool.
We will continue to be a dwindling little backwater that’s almost earning a crust from tourism and exporting food all the while with a growing population that puts an increasing strain on public funding of the services we’ve come to enjoy and expect over the years and the infantilised population will still attempt to live the high life on the back of cheap credit while a large part of our youngest and brightest flee the country they love for better opportunities offshore.
There’s a possible solution but it ain’t one that the pollies and public will want to go after.
And what solution would that be?
Credit as a public utility
merge
With whom and why?
With Australia – I’m sure you can figure out the upsides and downsides.
There are no upsides but plenty of downsides one of which will be losing our sovereignty.
Sovereignty ain’t worth much when your broke and living in huts made out of your own dung… besides from this side of the Tasman it appears that each of the states have their own personalities.
You might even get closer to the utopia of self sufficiency you bang on about.
The only way we’d be living in huts made out of our own dung is if Brownlee issued a dictat revoking building standards for rental property owners.
Oh so you haven’t seen the dictat yet>
lol
Sod merging with australia – revoke the statutes of Westminster, dissolve parliament and claim Colony status once again – What?!?!? I hear you cry…. ah but here is the clever bit – UK is a basket case but we now are part of Europe, free access to all markets, claim EU subsidies for infrastructure ( like Eire and Portugal – ok crap economy but good infrastructure) and then just get a devolved parliament like Scotland and Wales.
Its a win win win as far as I can see
lateral thinking?
Yeah man, credit as a public utility.
Now you’re talking.
As for “merging” as a solution – laughable.
The UK is having tremendous difficulties finding a scale of operation which they can tackle economic and scientific development with. What the **** is merging with piddly Australia going to do for us? (Apart from giving them an excuse to take all our fresh water).
Pool our combined crash course in capitalism? How helpful that will be.
we could become another tasmania.. which would be about all that we could look forward to.
second class aussies……. yea that’s what we need to be…. forget about the fact that NZ’s strength has historically been the innovative and ground breaking advances brought about by a society that continued to produce remarkable people. where are all the bright ones now? have we degenerated to the point where running to australia cap in hand is our best option.? and don’t assume it would be anything else but begging. (for the federal handouts every state gets).
so we accept our inadequacies, and announce to the world that we are failures as people, and as a society.
gonna get a lot of takers on that bet.
Why would we become a second Tasmania ?
The waste in America must be pretty monterous, they pay a cumulative amount of tax of 36%, only 1% less than us, yet we get a state run health service and subsidised university…
I think one of the biggest problems in America is corporate money influencing government to pass laws favouring certain companies and industries, e.g. about 25 years ago the government put in place a 25% tariff on SUV’s so American manufacturers focussed on building (and convincing people they wanted) SUV’s… That has of course led to profiligate waste of oil and cars no one wants elsewhere (apart from China scarily enough), the Japanese are so efficient now they are starting to compete EVEN with the 25% handicap…
A third party is really needed to re-introduce a fairer tax system… But ultimately I think America is in long term liquidation when you add up unfunded liabilities, federal debt, state debt, municipal debt and personal debt America is $102,000,000,000,000 in the red… That’s trillion with a capital T..!
Poor Americans who have lost their homes and jobs will still be ministered to by Oprah! She is a BILLIONAIRE twice over! Is there something wrong here? The Rogernomes and their current followers the Nact Government get their vile ideology from the failed society of the US.The neo-liberal US is a shell on the point of collapse: Once the dollar is no longer the World’s reserve and oil buying currency it will plummet and the US will be even poorer. The US is nothing more than the rich parasites at the top in their gated communities, A huge War Making Industry, Harvard,Princeton Yale which turns out the toffs who keep the wealth of the ponzi scheme flowing upwards, and of course that criminal association Wall Street conning their own and the World with garbage investments and who are in Bed with the White House. Corporations rob America(And have the politicians of the two headed one party state in their pocket paid for with campaign contributions) and their one and only imperative is PROFIT! Social considerations are communist. I think Paula’s over there at the moment could she stay there?Please! Mister Nice made a mint with the Merrill Lynch mob, no wonder he likes it over there with his house in Hawaii. Kiwis bought it now they got it! Poor American Schmucks screwed by the rich!
Contrast the terminal American Funk with the impressive morale shown by China which intends to put a man on the Moon by 2025 refer link:
http://www.guardian.co.uk/world/2010/sep/20/china-could-make-moon-landing-by-2025
Is China the New America: The Country with guts and commitment rather than how much can I accumulate( How much can I swindle from others and shaft the stupid working asses?)?! If so Taiwan will formally join to the mainland!
Read how Wall Street aka US Government robbed the American people of 700 billion dollars!
http://www.informationclearinghouse.info/article26413.htm
that is only the tip of the iceberg
which is actually sitting on top of another iceberg
The figure is reportedly closer to $2.3 Trillion, and can never physically be repaid,
The debt owners ended up getting their banks back, and took ours as well,. Now they are writing regulations for themselves (again) to allow the dollar, et al, to be responsible to a non-sovereign credit note controlled by the U.N. This disturbingly transparent sleeping watchdog scenario translates to control actually being in the hands of the bankers who supply the IMF and the World Bank. Which for those who may have forgotten are private banks.
This new global currency has already been used during the recent G20 and G8 summits to move vast sums of credit between debts traders and not a cent of it is controlled, owned by, or responsible to any nation on this Earth.
Which iceberg are we sitting on? Neither, they are both on top of us
and on a side note, it is almost the Centenary of the Federal Reserve, now there is a story of the little idea that could. Most well documented example yet of private bankers incrementally owning a country
Good link here about what is neo-liberalism?
http://www.countercurrents.org/basu270210.htm
Again I think its main plank is to dismantle the common good by privatising all publically owned assets and making them a sources of capital gain and income wealth for the increasingly rich:ordinary people eventually become economic serfs in their own countries as you have in many asian economies.
America is caving in due to intractable corruption in the political and business spheres. Our two party system is a false choice with both parties working only for special interests and their own cowardly choices that preserve themselves. Our government has been hijacked by the power of the wealthy controlling the decisions that are undermining the American middle class. Meanwhile the middle class believes the lies and propaganda as they work harder to try and keep from falling behind faster than their neighbors. Our income inequality has grown to levels equivalent of the 1930s. It was an unworkable plutocracy then and the same thing is happening all over to a complacent population still looking for an easy way out while they watch American Idol soon to be American Idle.
America is becoming a retiree home for the stinking rich who have huge and immense financial resources bringing in all that interest from an economy totally screwed because they have screwed the workers an obvious recipe for collapse obvious to anyone with an IQ of 50, resources tied up which might actually bring the country back to life! If they were taxed and deployed back to the willing serf working class. If that were done the screaming outrage would be heard all the way over here to NZ!
DEFINATELY A SCHMUCKFEST!!!
A link showing how the rich have mega screwed America earning the contempt of the World for this shit hole of the rich.I just don’t want NZ to become the same with ordinary NZers serfs to the rich bastards, if that happens revolution will happen! New Zealand for New Zealanders not just rich bastards!
http://www.informationclearinghouse.info/article26412.htm
after a century of the “wiseguys” winning the infrastructure contracts its no wonder the place is falling apart.
randal.. the mafia only moved into the construction industry on a large scale around the middle of last century. around the time they started getting involved with heroin trafficking. before that it was just true blue, patriotic thieves and gangsters. you can take your pick of nationalities to point at as far as corruption goes. pretty much every ethnic group apart from the native americans, and possibly the polish brought their own gangs with them.
you could say that modern america has been founded on greed and corruption, and it would be hard to argue against.
“you could say that modern america has been founded on greed and corruption, and it would be hard to argue against.”
About as sensible a comment as saying the entire world was founded on greed and corruption.
Or indeed the entire human race…
I guess the USA is a huge machine but with no one is able to control it. I suspect that even if there were a bunch of politicians who had the nouse and the will, they would be powerless to control the runaway. Look at the difficulties in getting a Public Health system underway but even then it still leaves out a huge chunk of people. Lobby groups. Party Donations. Oil.
And here? Such a pity to not be able to have a reasonable dialogue with the far right.
“New Zealand was fortunate enough to have nine years of a Labour-led government that arrested, and partially reversed, the neo-liberal agenda” introduced with the financial reforms by the 1984 Labour government of David Lange and then Minister of Finance Roger Douglas (Rogernomics).
The Labour neo-liberal financial reforms which destroyed the welfare state of New Zealand and led to the largest rip-off of the New Zealand public with the privatisation of public assets were continued with the financial reforms introduced by the following National Government of Jim Bolger and then finance minister Ruth Richards (Ruthanasia).
Seems to me the false dichotomy of LEFT-RED-LABOUR vs RIGHT-BLUE-NATIONAL is just that – false. Both Labour and National introduced neo-liberalism and both Labour and National have done nothing to remove or reverse the underlying cause of the curse. Patches to our economy are just that – patches.
Until monetarism itself is removed and replaced with the 6,000 year old proven economic model of money as a public utility – this failed – provably failed – historically failed – Milton Friedman economic experiment called Monetarism as taught in the Chicago School of Economics and advocated by the Washington Consensus will continue to destroy our country.
Vote Labour or National and you continue to vote for neo-liberalism and, as it is clearly articulated by Marty in this article, the future for New Zealand is laid out in the current conditions of the United States.
Left vs Right – Labour vs National is a distraction to keep you voting for the same failed neo-liberal adventure and to keep you from thinking – instead – about Right (correct) vs Wrong.
and taught as Gospel in NZ universities despite it being founded upon unrealistic assumptions that haven’t changed, or even been looked at and questioned, in 2 centuries.
Exactly – it’s like the old science of the Earth being the center of the Universe from Galileos day. You could get a PHD equivalent in that science, you could become the prfoessor of the university teaching that science – but despite all your credentials – the science is still false making all the professors – professors of nothing at all!!! Just like Monetarism.
nzfp you said it better than i could. i’ve been reduced to calling roger douglas a “cookoo in the nest”.
“How have things got this bad? How has the world’s superpower suddenly become so poor that its police forces are crumbling?”
Not suddenly. If you do a bit of research you will find that the US has been running deficits for most of the period from the mid 70’s to the current date. That is why they are trillions in the red at the present point in time. So now they’re having to cut their cloth to fit. If you think undoing generations of waste is going to be painless you’re on the wrong planet.
Wow, that’s pretty leftist thinking there, TS. I hope your owners don’t find out that you consider forty years of diverting US taxpayers dollars into pointless foreign wars, the bank accounts of Texan oil barons and their Saudi mates, and the underserved enrichment of shyster bankers a waste. I’d hate to see you get fired for one moment of clarity.
I agree that the US has wasted a lot of public money on trying to solve the worlds problems.
What that demonstrates to me is how untrustworthy and wasteful politicians can be with public money and why they should get their hands on as little of it as possible. The US is not exempt in stupid financial decisions. For instance, paying way over the top for a worn out rail company, buying far more expensive LAVs than what we need are both a good examples of how our politicians can piss public money against the wall.
Whatever it is spent on though, be it war or welfare, countries can’t keep running deficits year after year without there being a price to pay eventually, as the US are now finding out.
Not to mention charitable donations to mates, sorry, investors, in SCF, the continued sponsorship of the liquor industry, the supershitty, tax cuts for the rich. Yep, you’re right, this government has a lot to answer for.
I don’t necessarily agree with all of those.
However, you are just strengthening my argument. Why not give the Mo Fo’s as little as possible if they are just going to waste it anyway.
Nope, the point is to elect Governments that govern in the interests of the many, not the few. The USA’s biggest problem is that its democracy is entirely subservient to the interests of the rich. The Town hall meetings, votes for dog catcher and judge alike all present a sense of community involvement at some level, but really the business of America remains business. The two parties are, as Bill Andersen used to say, the evil of two lessers.
Our problem here is lickspittles like Brash and English who want to have the same craven worship of Mammon here. Their problem is that Kiwi’s prefer a mixed economy, a strong state and all the good stuff that comes with real democracy, like education, health and a welfare state that is there cradle to grave when we need it.
– I agree that the US has wasted a lot of public money on trying to manipulate the world’s problems.
there you go . all fixed, think nothing of it, we all make little errors sometimes
All that statement demonstrates is your fundamental ignorance of how monetary theory actually works. Given that the US – like NZ – issues its own currency, how do you propose they are going to go broke, exactly? Are they going to suddenly wake up one morning and decide to stop issuing USDs and voluntarily put themselves into liquidation?
Not ignorant of these facts at all.
They can inflate their debt away by printing more USD and thus devaluing their currency. However, that is a good way to end up like Zimbabwe if you think about it. As their currency deflates the cost of all the things they have to import like oil etc increase dramatically in price. So, they still end up losing. In short, theres no free lunch.
Just to set the record straight, Zimbabwe’s problem was the destruction of its resource base by driving farmers off the land, not the issuance of too much currency. Hyperinflation is caused by a sudden and catastrophic decline in the productive base of the economy, as both Zimbabwe and Weimar Germany demonstrate, not by printing money. You’re mistaking a symptom (currency devaluation) for the disease (resource/productive capacity destruction).
And to point out the obvious, your last comment is a tour de force in monetary ignorance – clearly, if the Saudis are happy to accept payment for oil in USD, then the US government can continue to issue as much currency as they like to fund their oil purchases, with complete impunity.
Besides, if your statement “as their currency deflates the cost of all the things they have to import like oil etc increase dramatically in price” were actually true, how come the price of oil has halved since its peak given that the US deficit has nearly doubled in the same period?
It just means it will take them longer to get there..But they will get there.
The only reason the price of oil is not so high is because demand is not high at the moment. All things being equal, imported things cost more as a currency deflates. Its economic fact. Plus, the US is outsourcing a lot of its manufacturing to Asia now. So, as their currency deflates it will cost them more to buy their own products.
Here’s the essential qualifier you forgot to put in your sentence – it should read “all things being equal, imported things cost more as a currency deflates, assuming imports are denominated in a foreign currency“.
For exactly the commodity that you list – oil – the primary denominating currency is the one issued by the US Fed. So it’s safe to say that the US government can continue to issue the currency it needs to buy the oil it requires, and there is no reason – short of the Saudis deciding not to accept greenbacks – why they can’t do so indefinitely.
And to get back to the central point, it should be pretty clear by now that when the US government does create the money out of thin air to write a cheque for that oil (well, sends some zeroes and ones, anyway) this is not a “debt” that needs to be repaid. In the simplest accounting terms, the money has been exchanged for the oil and the books balance.
Deficits are not inherently evil, and in a modern economy that issues its own fiat currency they do not need to be “repaid”.
“Just to set the record straight, Zimbabwe’s problem was the destruction of its resource base by driving farmers off the land”
Absolutely – another point in line with this is that “the destruction of its resource base” led to the destruction of the government. Without a stable government able to enforce law and credibility in the financial system the currency collapsed.
Aristotle makes thae point in Ethics 1133 that
In the case of Zimbabwe it became a failed state with a tyranical Government, and, as clearly articulated by Aristotle money exists by law and without law the money system is destroyed.
They will go broke like Zimbabwe did. Their currency will eventually become worthless and they will be forced to use other countries money and rely on charity.
Snap tsmithfield.
Zimbabwe is a good example of how uncontrolled government expenditure and money supply growth coupled with a lack of respect for private property rights and a desire to control the market destroys a country’s economy.
However our leftist friends will probably argue it is all the IMF’s fault due to ESAP.
Yep. The US is screwed. I think there are going to be a lot more cuts in public services yet. A glowing example of government expenditure out of control.
I think you’re right, albeit for totally the wrong reasons. It’s ironic that the US is busy paving roads in Afghanistan whilst pulling up the paving on roads in America, but that’s a political decision, and one not at all dictated by their deficit levels.
Can’t see the forest for the trees.
It’s not government expenditure that is out of control but how much the rich are stealing from the country.
Indeed – Paul Krugman makes the point in the NY Times:
Yep.
“You know what they say — it takes money to avoid paying money. TechFlash reports that Microsoft CEO Steve Ballmer and Amazon.com CEO Jeff Bezos have contributed $100,000 each to an effort to defeat an income tax on individuals in Washington state making more than $200,000. The backers of Initiative 1098, which is set for the November ballot, include Bill Gates (Sr.), who has emerged as one of the most vocal proponents of the income tax. Under the proposal, which has drawn the ire of the Bezos and Ballmer-backed Defeat 1098, no tax would be due on the first $200K of income, 5% tax would be owed on income between $200K and $500K, and everything above $500K would be subject to a 9% tax (cutoffs are doubled for joint returns).””
“Yep. The US is screwed. I think there are going to be a lot more cuts in public services yet. A glowing example of government expenditure out of control.”
And yet they can’t maintain essential services? I don’t think you’re looking in the right place for the money…
No, actually your leftist friends will sigh, roll their eyes, and make the point that you appear not to understand any of the reasons for the Zimbabwe collapse.
Great article Clarke! Cheers – I’ve bookmarked that site for future reference.
no gosman… anyone who has followed that sorry saga could tell you it’s more to do with unbridled corruption and greed, coupled with mindless bigotry that has got zimbabwe where it is today.
the US borrows every dollar in its economy. End of story.
The US Treasury only prints what the Federal Reserve decides to loan to the American Government, and ultimately its people
The USA ‘has wasted a lot of public money on trying to solve the world’s problems’. Delve into that heap and probably the USA’s actions will be there forming the problem. Then they can play this game of being the philanthropist.
They were so great helping Britain before the USA was forced off the fence in the Second World War. But they got payoff – some destroyers for a strategically placed island base Britain claimed etc. Though not everything is done for profit, I bet there is always some payback for USA public money spent/donated.
“the US has wasted a lot of public money on trying to solve the worlds problems” …
Come on TS – don’t for one second ever suggest that the US is “trying to solve the worlds problems”.
The truth of the matter is that the various regimes in control of the USA’s vast military financial complex are spending the wealth of the USA soley to increase the power of the few wealthy elites in charge of the military financial complex.
The average American would prefer the US spend the trillions of dollars wasted on the wars in Afghanistan and Iraq at home on things like rebuilding the New Orleans Levy’s before they broke in Katrina (instead the US sends 3 to 15 Billion in aid annualy to Israel in so called aid).
Afghan and Iraqi wars started so that American elites can profit from heroin, while destroying Israels greatest economic and cultural threat in the mid-east (Iraq) while at the same time attempting to steal the vast mineral resources of both countries.
The US is not trying to solve the worlds problems or police the world, the regimes in control of the US are instead holding the world to ransom with 5,000 nuclear weapons and the worlds biggest military.
“I agree that the US has wasted a lot of public money on trying to solve the worlds problems.”
The Worlds’ problems? No! They have created problems for the world – starting with but not limited to their shooting wars and invasions. It’s well known that war is good for business. Tragically, the stupidest and poorest Americans* all favour these wars, as “patriotism” is all they have got left…
Deb
* I am in email contact with some of them, purtroppo…
The U.S. has been running deficits since it signed its currency over to the Federal Reserve almost One Hundred years ago.
As soon as you have to pay interest on the money you are ‘creating’ you are in deficit
Deficits in themselves are not bad, though monetarists would have you believe otherwise. Governments are not households.
For a prescient explanation as to how it (the current state of the global economy) has come to pass, read this from economist Michael Hudson: “How Brazil Can Defend Itself from Financialization”. Insert NZ and it adds up the same…
http://counterpunch.org/hudson09202010.html
His website has been posted here before…
http://michael-hudson.com/
Deficits need not necessarily be bad. For instance, if a business goes into debt at 10% interest purchase equipment that will earn them 20% on the investment, then clearly they are better off.
Yes that is true,
However a nation isn’t a business. A nation has the capacity to create money – a business cannot. A nation can create a public central bank and the treasury can borrow from the public central bank. However the debt to the public central bank owned by the public is ultimately public debt owed back to the public.
Hey mrspollard,
If you like Michael Hudson here are a couple of interviews in podcast mp3 format you can listen to if you are interested (I’ll posting a couple more in the next couple of days).
“Professor Michael Hudson”
You may also enjoy listening to Stephen Zarlenga of the American Monetary Institute (AMI) also in mp3 podcast format (I’ll posting a couple more in the next couple of days).
“Stephen Zarlenga”
And for an alternative view to monetary reform try Ellen H. Brown, also in mp3 podcast format (I’ll posting a couple more in the next couple of days).
“Ellen H. Brown”
Cheers nzfp!
If you actually do the research you’ll see that the US has been running deficits practically since they declared Independence, and that the largest deficits were during WWII, not the 1970s. Much of the government spending since the late 1700s fostered the development of the country and built it into the superpower we see today, so it’s a very long stretch to suddenly categorise it all as “generations of waste” unless you’re a blind ideologue.
Debt is OK if you can point to offsetting assets on the other side of the balance sheet. Especially if the assets have sound economic value. However, I think most would be challenged to do that with the trillions of debt they have at the moment.
On a recent RadioNZ (evening Bryan Crump) discussion on the Humanities with a USA academic she said that when holding a debate on the death sentence, one man on the anti side had a bit of trouble getting his head around the position as he personally supported the death sentence. He had had no experience of thinking around a subject to understand the varying viewpoints. He found it a mentally enlarging experience preparing his case and making his argument against. The humanities with the teaching of Critical Thinking is however being seen as irrelevant by many leaders wanting to concentrate on business and finance management.
I don’t think that our education so far has prepared the majority of us to see clearly how things are and might be and make intelligent and considerate policies in the light of our understanding of the facts. Knowing how to hypothesise and then judge its validity is not universal! This is light years away from the mass curricula and testing of the National Standards.
We need to be able to understand and make decisions for viable provision for the present and future. Also to understand what we need in these times of lost stability and lack of commitment by businesses to financially support their investment home, country etc.
Instead we get the mish-mash as in USA, a confused mass of people churning around opinions comprehending little, similar to the blinded people caught in the foyer of the hospital at the start of The Day of the Triffids. That was a frightening spectacle.
This is like trying to blame the current situation in Greece, Spain, Portugal, or even Zimbabwe on ‘Neo-liberalism’.
How about I get an article about the situation in North Korea or Cuba which highlights the problems in those countries as a counterpoint?
Another attempt at distraction from Gosman with the usual false dichotomy.
Nope, just pointing out the absurdities in the argument put forward by the poster once again.
BTW don’t you think it strange that most of the developed world economies are turning to the right instead of the left during this ‘crisis of Capitalism’. I mean even that bastion of Social Democracy Sweden has turned its back on the party that nurtured the welfare state over there.
I don’t believe Marty said anything about Greece or Zimbabwe etc, you’re just misrepresenting his argument for your own ends… which is a ban-able offence, so tread carefully.
wrt Sweden, this from the BBC might inform you:
And they’re still left with a hung parliament between 2 blocs (it’s all the rage these days). But they have a toxic far-right party in the middle that no-one will deal with, so there might have to be some bloc re-alignment…
[lprent: Yeah, I’m keeping a bit of an eye on his comments at present after the splurge yesterday. This one appeared to be more of a diversionary tactic than anything substantive. Mind you it is hard to think of the last time we saw any actual content in the gossips comments (or posts) ]
What I enjoyed reading recently was some leftist commentators trying to blame the problems of countries such as Greece on ‘Neo-liberal’ economic policies and ‘Evil banks’. It was plain that the root cause was the fact the Greek government was to blame by spending well over what it could afford on non productive areas of the economy such as Social Welfare and Pensions.
What policies are the Greeks being forced to follow now? I’ll give you a clue it ain’t Socialism.
Greece’s problems stem largely from their decision to go into the EU and cede control of their currency to Bonn. Which is a pretty strong argument for never merging our currency with Australia.
Tragic Flaw: Graft Feeds Greek Crisis
So, who do you think could afford the biggest bribes to get the most out of the country?
One thing is true though – it wasn’t socialism that caused Greeks pain.
TS or Gos.
care to explain why US inflation is where it is at the moment, and why there long term fed bond rate is likewise?
The fed has been pumping like a Hamilton jet, and the deficits (both federal and state) are likewise huge. This has been going on for years now. Accordingly, you are saying we ought to be seeing runaway inflation and a bond market asking for a risk premium on their debt. c’ept we aint. That ‘aint’ is at this point a fact that on the face of it causes monetarists a few problems. Care to explain it?
Or you can just keep bleating that it will be just like zimbabwe, it must., it must and it will, because, because we think so, and damn the facts. I can haz tax cutz?
You’re right. In the US economy is certainly not “busting at the seams” at the moment.
Someone may correct me, but I see there are several aspects to inflation. Firstly, assets like houses etc are deflating in value. So people are considerably worse off. On the other hand, organisations external to the US will want more and more US dollars for the goods they supply as the US dollar declines in value due to money printing. Hence the price for goods in US dollars should increase, making life a lot more expensive for the average American. The net effect of deflation on assets such as housing and the increase in imported goods may well balance each other out. However, the net effect is more pain for the average American.
If the money that has been printed had been going into the hands of average Americans their pain might have been reduced somewhat. However, since it has mainly been going to banks who reinvest in the carry-trade rather than lend it out, the average American doesn’t really see much benefit.
What are you saying? I ask because none of that looks like sense. Never mind the ‘shoulds’ and the ‘maybes’ and what you thinks others will want.
There has been massive deficit spending, and massive fed reserve pumping of the dollar. According to what you have said elsewhere in this thread, there should be concerns about runaway inflation (ZOMG Zimbaaaaabweeee!!1eleventyone!), and yet not only is inflation negligble, but the ten yr bond rate is also tiny. It would deem that the bond market isn’t pricing much risk on this dreaded debt monster, nor are they expecting runaway inflation.
These are all facts. So either the markets have got it wrong as all hell, and there will be inflation, (though you will still need to explain why it isn’t it showing up now, given the monetary policy of the last 5 years or so) or your theory has been counter-exampled by reality.
You can’t just wave your hands and say, ‘oh well housing is declining’ and pretend that that accounts for the lack of inflation. If there is no inflation, then there is no inflation. Whereas you predicted massive inflation, right here in this thread.
Where is it?
It’s not there.
So it looks like the theory predicting the inflation is not so robust that we need pay it religious devotion. We should be careful about sacrificing to it. This would be a politically and philosophically conservative approach, a rejecting of dogmatic ideology in other words.
Look at it this way.
If people are becoming poorer (no pay rises, working less hours, losing their jobs etc), but the price of goods is staying the same or increasing even slightly then the impact is the same as inflation, even if the overall balance (say reduced house prices v increased price of imports due to the falling dollar) stays constant, then it will feel like inflation to the poor suckers trying to pay their bills.
This is somewhat different to deflation where the price of goods declines along with incomes. In the scenario above, it might be that the increasing cost of inputs means that businesses can’t drop their prices to match the declining incomes.This would mean that more businesses go under creating more unemployment resulting in a vicious downward spiral into poverty.
In fact this scenario is worse than inflation because, with inflation, wages are rising along with prices. Probably the more accurate description of this scenario would be stagflation.
So, what you’re saying is that we presently have hyper-inflation in NZ. Prices are going up and wages are going down.
Don’t know. We could have a little of the sort of the stagflation effect possibly. However, we aren’t printing money hand over fist like the US. So I don’t see us getting into anything like the same situation as the US could deteriorate into.
But we do have inflation, unlike the US, your theory notwithstanding.
If the US has stagflation, then what we have must be hyperinflation by the same measure.
Facts about what is remember. Not coulds about what you reckon might have to become true in order for you to be not wrong.
No. Stagflation is no rise in income and slow gdp growth plus significant inflation. What we’ve got here is no inflation worth speaking of. That’s the point. The predicted inflation has not eventuated. I’m certainly not saying that everything is peachy. It’s not.
When Obama started out on his poorly designed and arguably too small stimpak and the FedRes continued with it’s ‘ quantitative easing’, the complaint from the right was the one you made in this thread. ‘Oh noes, inflation, Zimbabweeee!!’. That has not happened. Pointing out that other things are bad, cannot save the zimbabwe thesis. 101.
Whatever is wrong with the US economy at the present time it is not inflation, of which there is very little to speak of. This is in direct contradistinction to the predictions made by the GOP, Fox news, supply-siders, monetarists, goldbugs, classical liberals, Austrians, and in this thread, your good self and Gos.
So either the world is wrong, or y’all are.
There is an excluded middle that you are trying to sit in. You could include it by explaining why the inflation hasn’t appeared. You cannot do so by coming up with some other way of looking at it that says things are still bad even though inflation isn’t present, (which is what you just did).
That things are bad even with the low inflation is not something I disagree with.
It is something that disagrees with the idea that runaway zimbabwe style inflation is something we are living with however.
So it seems to me, that arguments that we must do painful policy x because otherwise……. ZIMMMMBABWEEEEE! are fucknuckled to a very large extent by the failure of the predicted inflation to eventuate in reality as it actually exists, neo classical economics and hayek, and mises notwithstanding.
As I said. I am taking a conservative position here, rejecting what looks to be simple dogmatic ideology that flies in the face of the facts.
Zimbabwe, and vampires, are two things I’m not concerned about.
The inflation/deflation even stagflation debate has still not been settled in the US. Granted, at the moment there is not an imminent risk of inflation. However, when I first mentioned “Zimbabwe” I was talking about how America might end up if money printing continued unchecked, not about its current state (see 8.1.1.3.1). The general consensus is that inflation is more of a long term concern than a short-term one.
I was engaging in hyperbole by comparing the US with Zimbabwe. The US situation is very serious. However, I agree with nzfp etc that the US has not suffered the same hit to its productive capacity that lead to hyperinflation in Zimbabwe. That being said though, the US is outsourcing much of its productive capacity to low wage economies’ thus is much more vulnerable to price increases due to the devaluing of the dollar as money printing continues.
Once again, you fail to explain why there is no inflation now. If the theory can’t do that, then why should anyone pay particular mind to it’s further predictions of inflation? It is clearly incomplete, and that is literally the best you can say about it.
Another question however, is raised, and it’s one I’ve again already touched on.
If there is not an imminent risk of inflation, nor going by the ten year bond rates do the markets see much risk further out, then by what measure is the debate unsettled?
How, in other words, do you explain the unsettledness of the debate? The link you provide is just more of the same. If the inflation concerns are legitimate in this crisis, then where is the inflation that we should be experiencing now given that the fears in that article are predicated on exactly the same thinking that predicted, falsely, inflation now.
I suggest it’s unsettled insofar as some are not facing the fact that their theory has failed to predict what happened. Until they accept that, and modify their theory then they will continue to bleat, ‘Zimbabweee!!’ however hyperbollixxy , and the media will continue to give them space in the interest of balance.
That would be one explanation for the unsettledness.
But anyway, you’ve backed away considerably from your initial position, which was that inflation was inevitable as a result of the policy settings that have been in place for several years now, with the implication that inflation should be of major concern right now to policy setters in the US.
That’s good.
Given that inflation is, in your words, more of a long term concern than a short-term one , and that there is not an imminent risk of inflation then the question is how much weight should policy setters give to long term inflation concerns given the actual problems that are being faced right now.
I think actual problems existing right now trump theoretical problems from the future, (this would be that conservatism and the rejecting of the dogmatic ideology again). Especially when the future theoretical problem is predicated on assumptions that predicted we would be facing that problem now, when, as you and I agree, we are not.
“I think actual problems existing right now trump theoretical problems from the future, (this would be that conservatism and the rejecting of the dogmatic ideology again). Especially when the future theoretical problem is predicated on assumptions that predicted we would be facing that problem now, when, as you and I agree, we are not.”
Oiiii Climate change ??????
What’s your point? The warming, unlike the inflation, is here. We can measure it.
From my reading on the topic, the reason there is no inflation at the moment is that demand is low and there is plenty of productive capacity. Inflation tends to arise when demand is high and industry has plenty of capacity to meet the demand.
However, consider the scenario where America continues to outsource its production. World demand steps up considerably, oil and commodity prices ratchet up, and demand for products elsewhere in the world increases (even if the US is still in a depressed economic state), and the USD has devalued considerably further due to money printing.
American producers largely relocated outside the US will effectively become exporters back to the US. However, higher world pricing for goods, commodities etc, and the devalued USD will dictate what Americans will have to pay. Afterall, why export the items back to the US if better prices can be obtained elsewhere.
Thus, in this sort of scenario, inflation could become a fairly major issue for the US whether they are in a state to endure it or not.
From my reading on the topic, the reason there is no inflation at the moment is that demand is low and there is plenty of productive capacity. Inflation tends to arise when demand is high and industry has plenty of capacity to meet the demand
That’s what Krugman says too, as far as I can tell. And it’s a fair distance from the Zimbabwe thesis, which as far as I can tell, says that inflation is always and everywhere about the fed printing money.
The point being that invisible inflation is not something to be worried about now. And the now is what matters when you are really really sick. No?
Well, the Fed certainly agrees with you. Whether their methods will be effective or not is another matter.
Printing money hand over fist hasn’t solved the problem to date, so it is difficult to see why more of the same will make that much of a difference. Printing money doesn’t seem to be having that much effect other than devaluing the USD. That is OK to a point. However, it becomes problematic if the currency collapses.
From my reading, increasing debt eventually reaches a point where more debt has no extra effect on GDP. Many believe that the US is already very close to that point.
So whoever wins the inflation/deflation debate, the outlook is not very good for the US IMO.
Hey TS,
Bear in mind that the previous reserve currency was the Pound Sterling. Even though the Pound is no longer the world currency it is still a strong currency around the world.
Losing the status of the world reserve currency doesn’t necessarily mean the end of the world either for the nation that hosted the currency or the currency itself.
Printing money hand over fist hasn’t solved the problem to date, so it is difficult to see why more of the same will make that much of a difference.
Well the question is, what would it be like if the fed hadn’t been printing money, and if there hadn’t been fiscal stimulus. The answer is less demand, more unemployment (excess capacity), lower govt revenue etc. So nah, it’s not the case that the only thing it has done is ‘devalue the dollar’.
That’s just silly.
“Well the question is, what would it be like if the fed hadn’t been printing money”
Hold on Pascal – it also depends on how that money is put to use. If it is only used to speculate or to purchase T-Bills then it is effectively useless and as good as printing nothing at all. I make this argument because it is far more profitable and safe for banks to take 0.25% loans from the FED and then to buy 3% yielding T-Bills then it is to invest in SMB business and stimulate the economy. This is wrong – unfortunately that is how the FED has geared the US economy.
…it also depends on how that money is put to use.
True that. I was responding to the implication that fed policy or stimulus in general is an end in itself. ‘crank up debt!’ ‘print money!’ You could do either of those things to nil effect if you put your mind to it. I just don’t think the US policies have been of nil effect WRT to demand as ts implied…
Isn’t it called ‘The Japanese Disease’- quite a well recognised economic phenomemum that has aflicted Japan since the 1990s? Something to do with over-inflated property values and government unwilling to go into debt- sounds a bit like NZ at the moment.
“Given that the US – like NZ – issues its own currency”
Hey Clarke, that’s not entirely true – not entirely wrong either – let me explain my point.
The US has privatised the right to issue currency to a cartel of private banks known as the Federal Reserve system.
New Zealand on the other hand issues conis and notes from the public New Zealand Reserve Bank. The RBNZ issued coins and notes are spent into the economy as money free of interest and not lent into the economy as interest bearing debt.
However both the US Federal Reserve system and the New Zealand Reserve Bank allow private banks in each country to create money as loans almost exclusively against mortgage debt.
When a private bank creates a loan, the money is created by the bank against the assett (typically property) as interest bearing debt (creating . However neither the private banks nor the central bank (such as the Federal Reserve or the RBNZ) create enough money (or any money) to pay the interest on the debt.
The result is that each economy is forced to grow in order to get the money needed to pay the interest on the old debt (public or private) which in turn creates more debt creating more interest creating more growth until debt saturation occurs.
At the point of debt saturation, the economy can no longer support more debt – meaning that it can no longer grow meaning that it can no longer service the interest on the old debts which leads to debt deflation, recession and depression as the money supply is contracted as no new loans are taken out and all the money currently in the system is used to pay down the current debts (debt deflation) meaning there is less and less money circulating in the economy as it is all aggregated into the banks to pay bank debt.
As more money is sucked out of the economy by banks coupled with the fact that banks are not making loans – which in the case of the USA is because money borrowed from the Fed at 0.25% is more prudently invested in US T-Bills at 3% (money for nothing) then in risky loans to SMB businesses in a depressed economy – the money supply is contracted which is the definition of a depression.
So yes the USA can issue money directly – but it isn’t. The money create as loans against the US public by the FED must be paid back with interest and is only being supplied to Banks which are in turn using the money to buy more T-Bills to support the old debt int he US. This will not lead to inflation but rather to deflation.
However NZ can issue money directly from the RBNZ and should. Not only that but all the local government bodies should make all of their borrowings from the RBNZ at zero interest. However these are not the policies of either LEFT-RED-LABOUR or RIGHT-BLUE-NATIONAL which means that Labour and National effectively have identical monetary and economic policy – making them effectively identical political parties.
“making them effectively identical political parties.”
I quite enjoy specific social gains that Labour has made in the last decade that we were unlikely to have seen coming from the Nats, so I disagree.
Hey L,
“I quite enjoy specific social gains that Labour has made in the last decade” of course and so do I and I’m not attacking that.
The point I’m trying to make – which makes me mad – is that unless the root cause of the problems we are facing – which I believe are economic – are addressed then everything else is just robbing Peter to pay Paul – in this case it is robbing the middle class to pay the working class – creating class war.
There is no need for class war, especially if all of the Government supplied products (infrastructure, electricity, water, money, etc…) and services (health, libraries, education, police, etc…) are funded entirely by the Government via the Reserve Bank. Instead all these services are funded through increasing taxes on labour (i.e. 99% of us) and foreign borrowing – which is a complete waste of time and money.
I will continue to be critical of Labour and National and continue to see them as identical – two sides of the same coin – one RED-LEFT and one BLUE-RIGHT – until Labour and National address the issue of who creates our money and how our infrastructure (physical and human) is funded.
See an earlier post a week ago here (September 2010 at 10:07 am) on why foreign borrowing is unnecessary.
You also need to point out that the government needs to ban private banks from creating/issuing currency.
“You also need to point out that the government needs to ban private banks from creating/issuing currency.”
Yes – and it should be obvious now – the irony is that the Chicago School of economics proposed a plan that included this and it was endorsed by Milton Friedman – before the existence of the Washington consensus.
See here for details of Friedmans support for banning banks creating credit.
Which begs the question – what happened to Friedman?
Got bought I suspect.
nzpf “The money create as loans against the US public by the FED must be paid back with interest and is only being supplied to Banks which are in turn using the money to buy more T-Bills to support the old debt int he US.”
But the interest rate is virtually non-existant; which enables the carry trade.
Hey TS “But the interest rate is virtually non-existant; which enables the carry trade” at the moment it is. However the Federal Reserve system has been in existence since 1913. There is an awful lot of debt still owed to the private Federal Reserve System that incurs interest debt much higher then 0.25%. During Volkers reign as Fed Chairman the FED set interest rates at 20%.
That said you are correct and that is why I pointed out that “money borrowed from the Fed at 0.25% is more prudently invested in US T-Bills at 3% (money for nothing)”.
But the carry trade is a bad thing – the money should be invested in business and infrastructure. Investing in T-Bills is parasitic and extractive, investing in speculation is parasitic and extractive – neither of them result in development in the productive economy – consequently we get debt deflation and depression.
I thought that this subject had all the potential for the usual pill brained commentators to jump to the wrong conclusions in defense of their pet antisocial project aka neo liberalism. So rather than do the “Im right you are wrong” name calling mantra of tedious inanity exemplified by our two resident trolls I sought out a historic long term chart to draw a few conclusions from..found this:
http://en.wikipedia.org/wiki/File:Components-of-total-US-debt.jpg
What it appears to show is that the “profligacy” of US government as a contributor to proportionate debt has diminished incredibly since 1945, whilst that paragon of efficiency (the market and in particular finance) has shown every sign of reckless profligacy. From which you might conclude that government is not the problem….
Here
To right Draco, theres just so much evidence, its just amazing what fairy tales TS and Gos will invent to cover up that which is so obvious. What amazes me more is that the two trolls mentioned most likely dont even fit into the narrow litlle band of those with multiple amounts more than the rest of us, they probably dont get to benefit. Yet they will aspire to be like those who would probably spit on their heads as they (the two trolls) licked their boots. Its a strange variety of masochism.
Just because the private sector has been borrowing like topsy, this does nothing to diminish my earlier contention that the US public sector has been running cumulative deficits for a substantial period of its economic history.. I contended this had been happening from the mid 1970’s. However others have correctly pointed out, as this chart also displays, that the deficits have been running much longer than that.
At least with private debt, individuals enter into debt arrangements through their own free volition. The problem with government debt is that the decisions to indebt taxpayers are made by politicians on behalf of taxpayers.
The word you are looking for is ‘voters’.
Is there a difference between the Private Sector (Goldman Sachs, JP Morgan Chase, Bank of America, Federal Reserve Bank of New York, Citibank) and Government (Robert Rubin – Citibank, Tim Geithner – Federal Reserve Bank of New York, Hank Paulson – Goldman Sachs … etc …)
Kinda both look the same to me…
You’re entirely correct that the US government has been running deficits for about as long as there’s been a US government, but since the abandonment of the gold standard and a move to a fiat currency, that doesn’t matter in the slightest. The key difference between private debt and government debt is that private debt needs to be repaid, while government debt (when issued in its own currency) does not. If this was not true, then the US would have gone broke a long time ago.
Hey Clarke,
How do you reconcile public debt owed to a private institution (USA/Federal Reserve System) vs public debt owed to a public bank (NZ/RBNZ)?
Are you saying public debt owed to a Private bank doesn’t need to be repaid or are you saying that public debt owed to a private bank can be paid by borrowing more? What about the interest on the debt to the private bank?
? (I may not have articulated the question correctly so I leave it to you to)
As I’ve said before and NZFP says around about as well – there is never any reason for the government to go into debt. All it needs to do is print the money and then tax enough so that the amount of money in the economy remains reasonably stable in relation to it’s productive capacity to counter any inflationary trend.
The government going into debt is a result of the rich, over many centuries, persuading governments that the money needs to be loaned at interest which leads us back to what I said above.
That is what happens in a representative democracy – especially one that’s controlled by the corporates such as the US and NZ and so won’t take the logical route and stop borrowing money at interest. The rich really are stealing from the taxpayers/voters.
Thanks nzpf.
Do you agree with the point I am trying to make to Pascal above about the possibility of chronic stagflation in the American economy.
Because the US dollar tends to be the world’s reserve currency, there’s very little evidence that running persistent deficits is going to make a blind bit of difference to their economic outlook. While the rest of the world is happy to take USDs as payment, the Americans can continue to exchange money that they print on demand for actual physical goods that create wealth in their country (or plasma TVs – take your pick).
However your comment does tend to underline the basic problem of neoliberal economic theory – that it appears to have absolutely no predictive power. According to classical neoliberalism, the high US deficits should be resulting in domestic inflation, a devaluing currency and increasing interest rates on US government debt – yet none of these things are happening. As it stands, the US is suffering from domestic deflation, declining asset values, the US dollar is near historical highs and government bond rates are near historical lows – the complete opposite of what the Chicago School predicts.
So based on the evidence, neoliberalism is about as useful as hypothesizing that the sun goes around the earth.
Clarke, you should replace the phrase “Because the US dollar tends to be…” with “So long as the US dollar remains…”. There are a lot of people out there who would love to replace the USD with some other form of reserve currency.
See my last comment to Pascal (12.2.1.1.2.1). There isn’t inflation in the US….yet. My initial comments in this respect were about where the US could end up, not its current situation. Many commentators believe that inflation will become a major issue in the future for the US.
Hey TS,
I agree there isn’t inflation in the US yet – however I would suggest that there isn’t likely to be inflation in the US for a long time. The Debt graph supplied by “Bored” demonstrates the level of Debt the US has currently entered. If you look at the graph you can see the levels of national borrowing and private borrowing and that gives you an indication of what is meant by debt saturation.
Consider Clarkes arguments about National borrowing and consider the difference between a Nation and a citizen and you can see that a Nation can borrow as much as it likes – from itself (if the monjey is spent on the right things), but a citizen doesn’t have that priveledge, and it is for these reasons that many on this forum argue that the US will experience debt deflation (depression) instead of hyper-inflation.
Considering the manner in which you state your arguments, I think you would enjoy taking a couple of hours to listen to a well developed argument on Debt Deflation in a couple of interviews with Australian economist Steve Keen. You can find his seven-part podcast “The Debtwatch Report with Steve Keen”. It’s worth a listen, informative and enjoyable.
B.T.W I’m not taking the mic out of you – I honestly think you would enjoy listening to Steve Keens argument.
Thanks for that. I will have a look if I get some time. I agree that there is no inflation risk in the US at the moment. The general consensus over there seems to be that they are not slipping back into a double dip though.
What do you think of my proposition to Pascal any inflation risk to the US is more likely to be from outside the US rather than from inside it.
Hey TS,
RE: Steve Keen just do one a day bro – at least the first one – then you’ll be hooked 😉
I have to be honest I don’t think there is an infaltionary risk to the US from either outside or internal.
Remember that the Basel II accords which implemented “mark-to-market accounting” (Richard Epstein: Weathering the Financial Storm) for US banks along with the collapse of Bear Sterns in 2007 and Lehman Bros in 2008 (incidentally Sep 11 2008) signaled the shadow banking market to pull out of the US property market and the US banking system.
The loss of the shadow bankers (Hedge Funds, Pension Funds etc…) coupled with the Basel II accords left a gigantic hole in the US banking system. The gigantic hole is much larger then the amount the US has so far supplied in the bailouts and guarantees. In a Washington Times article titled “Banks Still Standing Amid Credit Rubble,” Patrice Hill wrote:
I think Ellen H. Brown best describes why deflation instead of inflation in her article “THE RETREAT OF THE SHADOW LENDERS: WHY DEFLATION, NOT INFLATION, IS THE ORDER OF THE DAY”
Brown’s quote still represents madness:
“Restoring credit” = pushing more debt on to individuals in order to make it look like they can afford to spend again. But individuals have smartened up now – they are focussing on paying off debt not getting in deeper.
Hey CV,
“Restoring credit” = pushing more debt on to individuals” but if you read her book you’ll get the background of what she fully intends. Brown advocates for the nationalisation of the FED. Her statement then means the creation of public credit free of debt and spent into the economy on infrastructure products.
I don’t agree with everything she suggests but her book is very well written and clearly articulates the problem along with ideal and intermediary soluions.
Have a read of her book “Web of Debt” and have a look at the following video which she is featured in:
“The Secret of Oz”
Yes, but they’ve been saying that for years, despite all the evidence that this theoretical inflation will not materialise – particularly when the greatest issue for the US economy is deflation due to the destruction of asset values and the contraction of both business and consumer spending. I mean, at what point do you give up on neoliberalism because the theory no longer fits reality? Frankly, neoliberal economic theory has all the credibility of Marxism at this point.
I completely agree – part (but only part) of the stability of the US economy does depend on the USD remaining as the de facto reserve currency. And while there have been some moves away from it, recent experience would suggest that there are no real alternatives on the horizon in the near future.
To paraphrase Churchill, the US dollar is probably the worst reserve currency imaginable – except for all the alternatives.
Theoretically, in a free-market with floating currencies, there shouldn’t be a reserve currency as each currency can be exchanged for every other currency at the market rate.
Excellent post Marty, this is an excellent example of how class war works. The wealthy in the US are so ridiculously absorbed in their own material gain that their country is crumbling around them an they don’t give a toss. The removal of power that the institution of government has to maintain standards of order require them to outsource their operation to the group of people that are directly undermining them. I am also thankful for Labour’s nine years but I wish it was more. History suggests that as an institution or a group becomes so powerful that they are no longer accountable for their influence and actions they are brought down through revolution or other similar action. This probably resonates with Marxian views on the final frontiers of capitalism. Eventually this plutocracy will end either when the wealthy and the rest are so radicalised from eachother that things will change the hard way or succession of left leaning governments are elected repeatedly to chip away at the class that wants to destroy democracy and the power of government by the people and bring change the easy way.
up against the wall motherf*ckers.
Even though America and its economy was slowly crumbling it was the 2 Bush regimes that pushed it over the edge, especially the junior Wya with his group of war mongers.
To believe that a war would create wealth for the wealthy was just plain crazy as it allowed the rich Companies the become richer by stealing off the taxpayers with their supplies and services to the Iraq war machine.
Great article about the the neo-liberal disaster of the US:Gross and cruel Inequality is celebrated Fortune 500: the US’s biggest Corporations are making record profits while on the same page Poverty in the US spikes. Useless labour costs have been discarded and our obscene privatised wealth
is bursting our bank accounts,Why? because a transfer from one class to another has taken place! Read the comments! Americans themselves recognise the cruel obscenity of this system and want to do something about it. Our Nact however continue to believe this is the way to go they are dinosaurs unsuited to a changed reality:They support profit before people.
http://www.commondreams.org/view/2010/09/23-4
Here is one comment from an American:
“These rich greedy bastards need to be taxed on their ill gained wealth. We need to raise the tax rates for the millionaires back to the 91% they were in the golden days of capitalism. Thomas Jefferson said, “To lessen the inequality of wealth, we should exempt from taxation below a certain point and tax the wealthy in geometric progression as the wealth increases.”
Our current Neo liberal Government looks back to Adam Smith’s free hand of the market with blinkered self serving adulation.
Today we have monopoly capitalism Throughout history we find the wreckage of the “vile maxim of the masters of mankind….All for ourselves and nothing for other people….unless government takes pains to prevent” this outcome. No invisible hand works in manipulated markets where governments sanction Smith’s “vile maxim,” and the greater good is nowhere in sight. Under neoliberal rules, capital wins, people lose, and consumerism makes a society obsessed with greed and gratification at the expense of beneficial social change.
Good link showing the greed of America’s masters who cut services via tax cuts first then cry poverty, though they have given away that money to the already super rich!
The Nact Gov is up to the same tricks by borrowing money for tax cuts which go to richer people and have to be paid back with interest to other rich people!From the public purse which entity they actually don’t recognise as it entails the concept of the common good! plus cutting tax intake and privatization of social assets so that they become profit makers. Basically they detest being servants to their own people they are servants to wealth and privilege and business rather! Meaning we don’t have a real democracy but the ignorance and complacency of people lulled by consumerism must be largely to blame as no challenge comes to these Politicians!
http://scisec.net/?p=237
My advice for Oprah if she really cares about her fellow Americans in dire straits is she should return to the people at least 1.9 of the 2 BILLION DOLLARS she has managed to take! Americans need real reform not more BS from the corporate media who provide the masses with their operating paradigm.
“Taxes are what we pay for civilized society”.
Neo Liberal Greed is dismantling civilised society in the US:
http://www.commondreams.org/view/2010/09/25-0
Neoliberalism, as defined in A Brief History of Neoliberalism, is the motive of recent (since Reagan/Thatcher/Pinochet) economic policy around the world by which wealth is distributed to favored sectors of the economy (primarily the financial sector) often at the expense of others (like manufacturing). The author shows that its stated economic objectives (deregulation, free flow of capital) are only followed when said objectives further the interests of the financial class. He talks about the capture of the state apparatus by these interests, something hard to dispute here in the U.S. given the recent massive and almost no strings attached bailout of the financial sector.
Just to be clear, this is not some sort of tract against the Evil Jew Bankers and their sinister cohorts. Instead it shows how the supposedly free market has been reorganized by a self-interested coalition of allied interests to create a situation where the average ignorant financial worker can make huge profits from making foolish loans to unreliable customers (or suckers, as they used to say in Vegas) and then get a government subsidy when the shitpile of financial malfeasance finally blows, while the average ignorant manufacturing worker obsesses about things like guns laws, abortion, and immigrants thinking somehow that it’s going to stop ‘them’ from shipping their job overseas. Never mind the ‘them’ is really just ‘us’ under a different job title and maybe zip code. (less)
neoliberalism gained favor among the ruling classes during the economic crises of the 1970s. Simply put, the social contract agreed upon in a post WWII world worked for elites as long as the economy kept expanding. In the 1970s, the global crisis in capitalism kept economic growth stagnant. In other words, they were fine with a fixed percentage of the economic pie as long as the pie kept getting bigger. Once the pie stopped expanding, the elites wanted a bigger piece.
To increase their wealth, the elites needed a new program to accumulate. They did this through what Harvey calls “accumulation through disposession.” This includes dispossessing people of their land and political rights (largely in the developing world), and dispossessing citizens of the Western world of their political rights and economic entitlements through the destruction of unions and other vehicles of social solidarity.
He also has an interesting theme about the conception of rights and freedom, and how the neoliberals have cast these terms in the narrowest and most ineffectual ways. He sees movements and opinions based on identity politics and postmodernism as results of a general embrace of neoliberal conceptions of rights and freedoms, even by those considered to be on the left.
neoliberalism is supposed to be about restoring capitalist profitability by removing barriers to accumulation. But increasingly this takes the form of accumulation by dispossession–privatization, destruction of the commons, and the commodification of everything.
What’s really scary is how the elites mask their reconstruction of class power through words familiar to us all: freedom, democracy, liberty, choice, etc…and we buy into it. When’s the last time you heard any mention of CLASS in a newspaper or on TV??
Another article about the US’s disintegrating infrastructure illustrating US neo liberal decline:
http://theeconomiccollapseblog.com/archives/americas-crumbling-infrastructure
This is what 40 years of Republican, starve the beast, trickle down Reaganomics gets you. Anyone that votes Republican can look in the mirror if they want someone to blame.
I am 32 and will be cursing the cheapskates of my parents and grandparents generation long after they are gone for having to pay additional taxes to replace crap that was not maintained, poorly built, poorly planned, etc. Thank god for patch and pray!
America’s idea of infrastructure is to build another football or baseball stadium for a bunch of dumbass jocks that make way too much money. Europe and Asia put us to shame. You can forget about ever having the Olympics here again in your lifetime.
Meanwhile in this country, the best and brightest work making cruise missles and derivatives. Why would anyone here want to be an architect or engineer when you will be unemployed for 2 years and not make jack when you do have a job?
Oh wait, my bad! It was the Marxist! They always skimp on public works projects! I think the gulags were actually FDR’s new deal! AHAHAHA! what a joke.
America is in the trash bin of history. There is no future as jobs are outsourced and people pouring in over the border making more demands on infrastructure, utilities, water, etc. I’m now a retiree, and quit voting 25 years ago (scandals, etc) and see no hope, it will only get worse.
Infrastructure is a public good-shared by rich and poor and those in the middle.NeoLiberalism doesn’t recognise the PublicGood hence the incentive not to waste money on maintenance but rather do some more tax cuts! Oprah’s 2 BILLION DOLLARS OF Personal Wealth all for her alone could be taxed at 98% to help the restoration of some of those decaying bridges, roads and sewerage systems!
Oh My God! You could imagine the howls of outrage that would happen! She’d still have 40,000,000 bucks to survive on and continuing media income.
Great backgrounding John. I think you said something about Buddhist philosophy helps keep one calm in an earlier post. I’ll try to follow that as I read them. Startling, unsettling stuff.
The real issue is where all that wealth is going to. Since the neo-liberal revolution, governments have cut tax on the wealthy again and again. In good times, surpluses are taken as a reason to cut taxes on the rich. In recession, the solution to economic woe is tax cuts for, you guessed it, the rich. The result is that more and more wealth is piling into fewer and fewer hands, and governments at all levels on a knife edge with chronic underfunding and ballooning debt.
The typical American worker’s wages are still where they were in the 1970s. To fund higher consumption they increased their debt, borrowing against the value of their houses, which was only a viable strategy until housing prices inevitably collapsed.
The question is, in a democracy, why the majority (poor to getting by) can’t assert themselves against the minority (comfortably off, wealthy and fabulously rich). And in NZ we have followed the same path, the decline in our prosperity was hidden by the borrowings we could make at very affordable interest!