Open mike 22/05/2010

Written By: - Date published: 6:00 am, May 22nd, 2010 - 26 comments
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26 comments on “Open mike 22/05/2010”

  1. Jenny 2

    Thanks very much for this link Olwyn.

    I think that this is a very important contribution into the debate on the causes of the current recession, and as John Key predicts even worse future recessions to come.

    The financialisation of the American, (and world), economy continues to grow unchecked, and at the same time, using Whately’s words, “rots from the inside out.”

    Stuart Whatley:

    Rather than capital being invested productively for future creation and innovation, the collective wealth of Western society is instead slowly sucked out and squirreled away through financial speculation by a wealthy minority, who have the means to make money from money. Economic bubbles based on imaginary prosperity inflate and pop with increasing regularity, and the victims are always those with no horse in the race nor any ace up the sleeve. Those with immunity are the cherished wunderkinds who planted the bomb in the first place. In any other society they would be hard at work curing cancer, but in this one they are cultivated and harvested from the top educational institutions to cleverly shift paper around while the great empire that conceived them rots from the inside out.

    And further:

    Unlike the halcyon days of manufacturative and innovative corporations creating prosperity we now have an economy driven almost entirely by the service sector — around 80 percent. Of that 80 percent, 41 percent of corporate service sector profits just before the 2008 financial collapse went to the financial industry, which distorts, destroys, and rearranges wealth notably more than it creates it. This methodical rearrangement is hardly a two-way street: the richest 25th percentile of society holds over 80 percent of the wealth — and the very top 1 percent holds the combined total of the bottom 90 percent. The wealth inequality in America today is unprecedented, approaching that of a banana republic or petrostate.

    Obviously as one of the benefactors of this system of creating money from paper, with a personal fortune of some $50 million. John Key is not likely to be overseeing any retreat from the neo-liberal financialisation of the New Zealand economy any time soon. The fact is, that not only do people like Key predict more and worse recessions, their personal fortunes are dependent on them.

    The hollowing out of the real economy by Key and his mates is probably also what motivates them to privatise our public assets and to allow the outsourcing of productive sectors of the economy and jobs overseas.

    • Pascal's bookie 2.1

      Good stuff.

      There’s a new doco out (“Inside job”) from Charles Ferguson, who did ‘no end in sight’ on Iraq.

      Good interview with him here

      I asked [Elliot Spitzer] about what seemed to be this very striking, distinctive, unique level of criminality in finance, which is not restricted to the behavior that led to this crisis. There have been many other examples of criminal behavior in finance. There are now three major banks that have been convicted of large-scale money laundering for Iran. Just a few days ago, ABN AMRO signed — I love this charming phrase — a “deferred prosecution agreement” and agreed to pay a $500 million fine because they did it too. So it’s an industry that has a very high level of criminality. It has become, I personally think, a criminal industry.

      I asked Spitzer about that: Why this industry? I have some experience with high technology and the same thing doesn’t happen. He agreed with me, but we actually didn’t show his full answer. His full answer was: Look, high technology is an industry where you create money by doing something different. In contrast, finance is really kind of zero-sum. It’s a trading game, it’s a gambling game. There’s a relatively fixed pool of money, but there’s a lot of money and the way you make more, as a banker, is by making sure that someone else makes less. It’s really hard to keep that industry ethical without appropriate legal and regulatory controls. If Intel made microprocessors that blew up the computers they’re in, Intel would go out of business. The same is not true for financial services. It was a very sobering moment, actually.

      Looks real good, will probably sink like a stone despite the maker not being any sort of radical. But who knows. People are pissed off and I think doco’s are becoming more influential. So here’s hoping it does some good.

      {absolute pipe dream, but I would luurve to see Elliot Spitzer marching past that famous statue to Baal with some RICO warrants and a wheelbarrow full of handcuffs.)

      • prism 2.1.1

        Interesting interview with mention of Iraq on Kim Hill this morning with Christopher Hitchens. His views are different than the usual.

      • Herodotus 2.1.2

        Any idea if this is available on the net, or could be televised somewhere say doco channel or ch 97?
        There are some wee gems being tevelised, unfortunately, some get missed because of obscurity of time or the title does not attract the attention.

        • Pascal's bookie

          It’s being shown at festivals at the moment I think, yet to have it’s theatre release. Hopefully it will show up somewhere here soon.

  2. RedLogix 3

    As the resident bastard landlord around here I’m intrigued by the provision in this Budget around the scrapping of building depreciation, that allows an exemption to be claimed for buildings with a design life of 50 years or less.

    Of the six units I own, I hands-on built five, but one of them (due to banking reasons) was a transportable from a well-known purveyor of these things. I’m intrigued to see on the Certificate of Completion that the WCC states that this building has an expected design life of 50 years or less.

    So while the other five units that I built to a high standard from permanent materials cannot be depreciated, but the cheap-jack transportable is. Can anyone else see where this is taking us?

    • frustrated 3.1

      I thought exactly the same thing when I saw the legislation the potential consequences of “50 years or lees” seem pretty obvious to me in that all buildings will now come with certification to say that they have design lives of 50 years or less – more retarded legislation – unless someone can explain the rationale for why that exemption needs to be written into law.

    • Draco T Bastard 3.2

      Yep. And everyone thought that leaky was a problem. Now we’ll get buildings that are deliberately built below standard.

      • frustrated 3.2.1

        I doubt that the building design/standards will change a great deal more likely that they’ll just be issued with a certificate of completion to say that hey have design lives of 50 years or less…… more unintended consequences on the back of poor legislation

        • Herodotus

          It should be the othere way, if Depn is to be allowed, apply it to well designed and constructed buildings, what is the point of constructing caardboard boxes that have deductions and will be demolished in a few years time, that is great use of our resources. So allow this for buildings with a lfe expectancy of 50+ years, or even extend this to 75 years then we would get quality in all aspects. It would be interested to know what the real life expectancy of a residential dwelling is. Perhaps someone who wrote the rules knows something more than the rest of us, or it was a great headline to fix a rort but in fact has less impact than what we initially believe is the case.

        • Draco T Bastard

          Well, true, the building standards are already low. As my nephew, who works in the building sector, says, expect more leaky buildings in 10 years. On that basis we can expect that all new housing will be eligible for depreciation.

  3. Herodotus 4

    “Why then should the ASB feel that it can bully a single working mother to give back the money that she was paid for the service that she provided? Is it perhaps because she is the easiest target?”
    On a lighter note:
    I hope that the IRD have investiaged this worker to ascertain that the correct tax has been paid on her income?
    If there have been underpayments of tax , have the 1st contribution to re instating the cuts made to ECE ?

    • Draco T Bastard 4.1

      I think ASBs action is because she’s the easiest target. I also think that they think that the community will will be against her because she’s a prostitute.

      The only way they could get that money back legitimately, IMO, is if the person concerned knew that the money was stolen.

      • frustrated 4.1.1

        “The ASB statement of claim says that Versalko made two large payments to a company run by the woman: $1 million in December 2008 and $964,287 in April 2009.”

        Sounds very very dodgy.

        I also note that they aren’t pursuing the other prostitute.

        • Herodotus

          If either lady has funds that the ASB could claw back, I would like to see the IRD get in there 1st, and take 1st preference of any money. I am sure all here would prefer that any money goes to the govt, and the bank has to wear the loss for sloppy house keeping.

  4. Yet another tragic death in Christchurch, caused by a boy racer.

    A woman and her two children were walking on the footpath with
    her two sons aged four and six.

    According to witnesses, a boy race started to do drifts in
    peak hour traffic and in wet conditions, he lost control
    of his modified car, went up on the footpath and struck
    both boys. The four year old died at the scene and the
    six year old is in a serious condition in hospital.

    What can one say? Its heart wrenching and thoughts have to
    go out to the family.

    I just hope that people in chch, start to take the boy racer issue seriously.

  5. It is good to see the widening opposition to mining on schedule 4 land.

    “The Zoological Society of London is calling on the British public to make submissions on the New Zealand Government’s proposals to permit mining on more than 7000 hectares of the conservation estate.”

    “…most evolutionarily distinct and globally endangered amphibian on the planet.” The critically endangered Archey’s frog is found in the area where gerry wants to mine. I’m looking forward to watching gerry back the big truck out of this one.

  6. Pascal's bookie 7

    Another week. Markets all skittery. Wars and rumours of wars and tails of sharks.

    The financial meedjits report on the signs in the entrails of all the little fishies, smackerilling about what it signifies. Which Greek got bailed out? Some debts gonna get paid though, and some folks is going to pay it. And reform always hurts sum. Heh. and fiffle. P to E and discounted future earnings? Nope. It’s a monkey what signifies

    Why, everyday before the sun go down,
    The lion would kick his all through the jungle town.
    But the monkey got wise and started usin his wit.
    Said, “I’m gon’ put a stop to this ole ass kickin shit!”
    So he ran up on the lion the very next day.
    Said, “Oh Mr. lion, there’s a big, bad muthafucka comin your way.

    (though that is a story with a very sad end.)

    Still. Governments will dance with them what brung them.
    And they will. there. buy.
    either both fall, or they won’t.

    But enough gibberish. Here’s a song, ’bout a word ’bout economics from the bible.

    happy saturdays folks, for them what’s got one. opportunity has knocked for me to start thinking bout drinkin.

    .bookie (+4)*

    *for them what knows your signifiers 😉

  7. Quoth the Raven 8

    A video of police brutality in the US aptly entitled with the common statist refrain A Few Bad Apples.

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