Rod Oram: The global crisis is real

Written By: - Date published: 11:47 am, December 15th, 2008 - 5 comments
Categories: articles, economy - Tags:

As usual an insightful analysis from Rod Oram on the need for our political and business sector leaders to better come to grips with what the international economic situation means domestically. He says:

Every sector of this economy has its own set of structural challenges forced on it by global conditions. Yet, we’re hearing nothing from the likes of Federated Farmers and the Tourism Industry Association that suggests they are even aware of their issues, let alon[e] planning a response.

The same is true for the new government, judging by last week’s throne speech. Yes, the speech had a few perfunctory paragraphs about the global crisis, but it offered no insight into how New Zealand might respond or the role government might play. “The driving goal of the new government will be to grow the New Zealand economy in order to deliver greater prosperity, security and opportunities to all New Zealanders.”

Yes, but what is New Zealand’s role in the world economy? How is it changing? How shall we respond to those threats and opportunities? All the speech offered was a bit of fiscal stimulus via tax cuts planned long before the crisis hit and some totally vague promises about the likes of transitional help for people made redundant, more infrastructure spending, better education standards and attempts to improve the bureaucracy.

It was a speech for a time and conditions that no longer exist. When reality does sink in, we’ll plummet. Let’s hope the pohutukawa we grab on the way down has roots strong and deep enough to hold us.

With the details of National’s transition package for workers who lose their jobs due today it would be great to see alongside it some more details of where NZ should be heading to ride out the stormy days ahead.

5 comments on “Rod Oram: The global crisis is real ”

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  1. Hobbit 1
    15 December 2008 at 12:22 pm

    Thank goodness for Rod Oram. One of the issues that has been making me nervous is that the noises coming out of govt seem to be saying that the economic crisis is over. No way Hose!!
    Where i am in UK, thousands each day are losing their jobs as carmakers and support manufacturing and other unrelated manufacturers and retailers are shutting their doors.
    Leadership is about preparing people, developing options. Who is planning to holiday in NZ? Will our markets buy as much of our meat and dairy products?
    Sure NZ did not suffer quite as much as USA and UK on financial crisis, but the economic one hurtling down the lines does appear to be much much deeper and will hurt us.

    PS Thanks, Standard , for the excellent analyses. You are my first port of call in the evening!!

  2. ianmac 2
    15 December 2008 at 12:40 pm

    I can understand what Rod Oram says and that is much clearer than some other economics speakers. I suppose the Govt has to be careful to not talk down the economy but there is a real world out there. A friend who runs a successful Boat business says that since April they have been hanging on by the skin of their teeth.
    Rod’s point about the current Govt putting into place a few little bits which were signalled before the Financial woes does not signal confidence. Actually Brian Easton is pretty good too. Now I wonder why Rod has been banned from Govt forums or interviews? Ummmm

  3. rave 3
    15 December 2008 at 12:46 pm

    Main point that Rod Oram misses is that the financial crisis was itself an effect of falling profits in the so-called ‘real’ economy. The blowup of the excess money capital bubble just reveals the underlying structural crisis in all of its stark ‘reality’.

    Implications for NZ spelled out here back in October.

  4. northpaw 4
    15 December 2008 at 1:22 pm

    I think Rod Oram’s last column for the year deserves plaudit for its congratulatory lede and amusing relevance around the word ‘gravity’.

    Personally I would have preferred his “four seismic shifts” to have included shadow banking. And yes, specified as needing unwind. So long as it remains then lack of clarity and likely obfuscation will persist.

    After all, its creation and growth arose from either incompetance or criminality. To which exponents and shadow banking advocates are most unlikely admit.

  5. Pascal's bookie 5
    17 December 2008 at 10:01 pm

    Northpaw, you might find this intreeeeging:

    ttp://crooksandliars.com/susie-madrak/there-bigger-story-behind-spitzers-do