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Open mike 24/08/2020

Written By: - Date published: 6:00 am, August 24th, 2020 - 43 comments
Categories: open mike - Tags:

Open mike is your post.

For announcements, general discussion, whatever you choose.

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43 comments on “Open mike 24/08/2020 ”

  1. lprent 1

    Problem from last night. The TS tmp directory filled up with undeleted backups and stopped comments. Cleared now.

    Now I have to have a look at why it wasn't deleting.

  2. I Feel Love 2

    I don't think the NZ psych could have coped with the multitudes of deaths and blocked up hospitals, rest homes permanently quarantined & freezer trucks full of bodies, schools opening & shutting, tourists not coming because we're a cesspool of infection, I just think the anxiety and depression would/could have really crippled us as a nation. I just can't see us living with it like the Americans, "it is what it is", not our attitude.

    • weka 2.1

      I agree. It would have torn us apart too.

      (not sure the Americans are living with it, they're in such a social and political crisis on multiple fronts).

    • SPC 2.2

      Not so sure, we've put up with low wages and high house prices (and for decades low standard rentals), tax policy suited to the haves (no CGT, no estate tax, low top rate of tax, geting tax paid super while still working) and labour and contracting laws allowing worker exploitation.

      Maybe if people could not flee to Oz there have been more resistance.

  3. Pat 3

    "The result is a travesty of MMT, not its original aim."


    "MMT was developed to explain the monetary logic in running budget deficits to support aggregate demand. This logic was popularized in the 1930s by Keynes, based on his idea of a circular flow between employers and wage-earners. Deficit spending was seen as providing public employment and hence consumer spending to absorb enough production to enable the economy to keep producing at a profit. The policy goal was to maintain (or recover) reasonably full employment."

    "The asset-price inflation effect of money creation by banks is thus to exert a downward impact on commodity prices, to the extent that the carrying cost on bank credit reduces the net purchasing power of debtors to buy goods and services. This deflationary effect of bank money ends in a bad-debt crash, to which the government responds by bailing out the financial sector with a combination of money creation and central bank swaps (which do not appear as money creation). This is just the reverse of the MV = PT tautology, which only measures the volume of new money (M) without considering its use– what it is spent on. By failing to distinguish the use of bank credit to buy assets (hence, adding to asset-price inflation) as compared to government deficit spending, both the old monetary formulae and the frequent MMT contrast between public and private sectors neglect the need to distinguish the FIRE sector’s “wealth and debt” transactions from how wages and profits are spent in the production-and-consumption economy."

    For those interested in the current discussion re MMT as an alternate lens through which view the operation of the political economy (N.B. political!) then this article gives a clear explanation of the role of QE in the process.

    Intent is key

    • Dennis Frank 3.1

      Thanks Pat. Here's another perspective:

      Steven Hail is a lecturer at the University of Adelaide School of Economics and a Modern Monetary Theory (MMT) economist. He spoke to interest.co.nz in a Zoom interview.

      "There can never be a crisis relating to New Zealand government debt. The New Zealand government can never become insolvent in its own currency. And it's not just MMT economists like me that will tell you that. It's right wing conservative central bankers like Alan Greenspan in the US who've explained that in the past. It's Nobel Prize winning economists like Joseph Stiglitz who'll tell you that."

      "And actually when you come to think of it, it's obvious. If you are the currency issuer you can never become insolvent in financial liabilities that are in your own currency. And the issuance of interest bearing debt, [such as government bonds], is something that you choose to do. It's not something that you're forced to do," says Hail.

      From an MMT perspective, the orthodox way of looking at the Government, the Government Budget in the economy and understanding our monetary system, is 50 years out of date, says Hail.


      • Nic the NZer 3.1.1

        Actually that is not really the subject of the paper Pat has linked to (nor would they dispute the truth of what Stephen Hail said).

        But what Michael Hudson is discussing is that how effective your stimulus is depends on who receives it and how it is used. The discussion is about how if you have a build up of expensive private debts and you only bail out the economy to the extent that these remain serviceable then you won't see much of a bump in GDP as people have not gained much disposable income during the bailout (and keep spending a lot on debt service costs).

        I think that's pretty clearly true (though I am less confident in the idea that QE has directly caused stock market price level increases).

        But there is clearly some truth to the facts

        a) Greece and the EU policy has largely been about bailing of German (and other European) banks bad debts.

        b) Ireland has had trouble differentiating between companies quartered there and work actually done in Ireland.

        c) The US stimulus in both the Obama and Trump eras have been very in effective.

        d) New Zealand seems to have been relatively effective in its own lockdown stimulus.

        • greywarshark

          All very interesting and I can understand it. Time we all understood that comforting statements that government spending is just like you do at home were laughed at by all who would be taught about money at primary school when minds are alert and receptive.

  4. Just Is 4

    Are having problems leaving a comment on Mobile, cannot reply.

    This started on Saturday.

    The low number of comments is indicative of the problem

  5. ianmac 5

    Wonder if Bryce Edwards enjoys giving further exposures to the most negative critics of the Government. The previous Government was treated by Edwards to all the positive spins with maybe a tiny bit of critic at the end of his spin. Now he finds all the critics and republishes their stuff with no positives for balance.

    Edwards damages our confidence in survival.

    • In Vino 5.1

      Agree. I found his latest so-called 'Round-up' more like the toxic weed-killer than a fair, academic summary of the situation.

    • Patricia Bremner 5.2

      He has always been biased. ianmac, even reporting favourable items with selectivity to support his already obvious hypothesis. I have written on this previously. If I remember correctly MS agreed.

    • tc 5.3

      Edwards sings for his supper like all the other opinionators. Stay in tune or don't get published.

      They're becoming a larger part of the problem lately as they'll never be a solution in our owned media landscape.

    • Muttonbird 5.4

      Dr. Cut 'n' Paste had fun with his safety scissors and non-toxic glue stick over the weekend.

    • greywarshark 5.5

      All very interesting and I can understand it. Time we all understood that comforting statements that government spending is just like you do at home were laughed at by all who would be taught about money at primary school when minds are alert and receptive.

  6. Reality 6

    Having watched Sunday on tv last night, which let us see how very serious Covid-19 can be, and seeing the pressure and strain on health staff, I hope the likes of Mike Hosking and his ilk are now fully aware that this is not just a bad flu. They have loud voices and a microphone but display wilful ignorance of how terrible it would be if the virus took hold as it has in Melbourne.

    Our PM and D-G have put people first. Unlike the former PM whose only contribution is to want billionaires brought here to buy up large (and to play golf with at an exclusive course, paying of course huge fees to keep "the economy running".

    • Wensleydale 6.1

      Hosking has a singular view of the way in which the country should be run (for the benefit of him and people like him), and nothing is going to persuade him to deviate from that delusional, self-interested mantra. A lost cause you might say.

      He's looking a bit rough these days, to be honest. Like he's crawled out of a skip after a three-day bender. I suspect, like sunlight to vampires, all this rampant 'kindness' is taking a toll on him. Poor man.

  7. Patricia Bremner 7

    Sorry, seemed to have posted the same comment twice!!

  8. ScottGN 8

    I guess if it’s any comfort the media pile on against the government can’t get any more intense than it did over the weekend so things are looking up right?

  9. Just Is 9

    Thanks Anne

  10. ScottGN 10

    Basic errors from Luke Malpass and Stuff.
    He’s said today, for example that the Americold cluster in Auckland is now 114 active cases Which is incorrect. There are now 114 active cases in total in NZ of which 18 are in managed isolation, leaving 96 cases in the Americold cluster.
    Further on in the article he had made the curious claim that the PM might not be able to justify leaving the rest of the country (apart from Auckland) in Level 1. That has now been corrected to say Level 2.


  11. SPC 11

    Lockdown levels.

    I'm expecting Level 3 in Auckland until next Monday and the rest to Level 1 on Wednesday.

    • peterh 11.1

      There is no reason to leave the rest until wednesday

    • peterh 11.2

      There is no reason to leave the rest until wednesday

    • roblogic 11.3

      Probably. The cluster isn't going away. But level 2 isn't that much different from L3 so I'm hoping we can have a -bit- more freedom soon.

      • SPC 11.3.1

        It is Level 2 for Auckland from next Monday – with plus for gatherings and required use of masks on PT.

        But it stays at Level 2 outside of Auckland with plus masks on PT – because the quarantine on Auckland ends at Level 2.

  12. Drowsy M. Kram 12

    The expectation (hope?) that relaxing Covid-19 restrictions (moving down alert levels) will necessarily ensure the viability of local businesses is mystifying to me. In these uncertain times a fair number of NZers are set to become less wealthy and will be cutting their cloth (masks) accordingly.

    When the next NZ outbreak of Covid-19 occurs (in 3 or 6 months time), I'll implement my own restrictions, and not relax them until all cases of community transmission have been chased to ground. A no-brainer for anyone in my age group with my medical conditions (multiple auto-immune disorders), I would have thought.

  13. Ad 13

    The Muslims of New Zealand have my total respect for the grace and fortitude displayed in fronting the victim impact statements in court in Christchurch today.

    Sure hope to see the killer given the longest and most silent sentence possible.

  14. Red 14

    I hear the trinity can be seen off by a few magic crystals and a pyramid under the bed Robert re comment 17 😊

    [TheStandard: A moderator moved this comment to Open Mike as being off topic or irrelevant in the post it was made in. Be more careful in future.]

    [lprent: This is a bug. It shouldn’t have sent it to an old open mike. ]

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