Written By: - Date published: 9:48 am, March 26th, 2013 - 48 comments
The financial crisis in Cyprus has taken an unusual turn, and for a change it is the rich who will be left with the bill.
Written By: - Date published: 8:20 am, November 3rd, 2011 - 82 comments
So, a government says that the people will have the say on its budget, and global markets plunge. Was there ever a clearer sign that the interests of the capitalist elite and the people are at odds, and the capitalists know it? It’s interesting that Papandreou has chosen to force a crisis and headed off a coup. Around the world, ordinary people want radical change.
Written By: - Date published: 10:14 am, August 24th, 2011 - 20 comments
It’s interesting to watch the economists flip as the economic system implodes. The most dramatic (and welcome!) NZ example has been Bernard Hickey but many of his colleagues are also throwing off their neoliberal blinkers. In this post, a former NZ Reserve Bank adviser explains why the world economy is mired in crisis and why it won’t just fix itself.
Written By: - Date published: 9:02 am, August 6th, 2011 - 79 comments
The global financial system, which has never properly recovered from the recession, is poised on the brink of a second crash. The headlines are a parade of bad news…
Update: US credit rating downgraded from AAA to AA+ with negative outlook (same as NZ). Announcement was made after close of markets. It’s gonna hit the fan on Monday.
Written By: - Date published: 12:26 pm, August 3rd, 2011 - 36 comments
The neoliberal myth is that government economic policy doesn’t really matter, it can’t affect the economy – apart from being an anchor on growth. The truth is, government is the biggest actor in our economy. What it does matters. Bernard Hickey has listed 10 ways that the government could act to get the exchange rate down.
Written By: - Date published: 11:00 am, July 29th, 2011 - 10 comments
The media are reporting the chance of the US defaulting as a ‘debt crisis’, as if the problem is too much debt and people won’t lend to them. It’s not. The US is still borrowing at half the cost we borrow at. The problem is the debt ceiling. A purely political invention that lets lawmakers cut taxes, add spending, and then refuse to allow the resultant borrowing.
Written By: - Date published: 9:23 am, July 27th, 2011 - 45 comments
The Republicans are playing chicken over the debt ceiling. The idea is to win as much as possible in spending cuts and permanently shrink the government by appearing more willing to go over the edge than the Democrats without actually going over. But does the Tea Party faction understand the game, or will they block the last minute compromise?
Written By: - Date published: 6:19 am, December 14th, 2010 - 49 comments
Two years ago we had one of the best government balance sheets in the world. Key said we didn’t have a debt problem. Two years of him as PM, and we sure have one now. When we learn exactly how dire things are later today, remember that National brought this on us by borrowing $3 billion a year for tax cuts that no-one noticed.
Written By: - Date published: 11:41 am, November 23rd, 2010 - 66 comments
Standard and Poor’s shock move to downgrade our credit rating caused markets to plunge late yesterday. Bill English’s reaction, predictably, is to pretend nothing is wrong. John Key says it’s about debt, even as he borrows for tax cuts. But let’s look at what S&P says is wrong with us:
Written By: - Date published: 11:59 am, October 29th, 2010 - 32 comments
It takes a lot to screw up a great country like New Zealand. It can’t be done overnight. But if you’re really negligent, anti-worker, and focused on hand outs to the rich, you can start to make things worse pretty quickly. Let’s look at the key measures of National’s performance, according to their own criteria:
Written By: - Date published: 7:15 am, October 6th, 2010 - 75 comments
The NZIER survey of business opinion shows that the economy shrank in the September Quarter. The December Quarter was already forecast to be negative and the Christchurch quake will make it worse. So, we’re almost certainly back into recession. That’s going to blow out the government’s debt. The underlying cause is peak oil.
Written By: - Date published: 1:46 pm, June 10th, 2010 - 21 comments
National’s budget broke a number of economic promises. One that’s not been emphasised enough is their commitment to be fiscally neutral. Labour got New Zealand to $0 net government debt. Now we are headed back into the red again and National is making it worse, not to create jobs to help ordinary Kiwis through the recession, but to fund tax cuts for their rich mates.
Written By: - Date published: 9:51 am, May 8th, 2010 - 42 comments
In other cheery news this morning: “Euro crisis goes global as leaders fail to stop the rot”. Germany’s Chancellor says that “politics have to reassert primacy over the financial markets”…
Written By: - Date published: 10:53 am, May 7th, 2010 - 16 comments
To avoid cascading sovereign debt crises, countries need economic growth that will boost their tax so they can start getting their books in order. But good economic news sends oil prices up due to the tight supply situation and we’re close to the point where the price of oil tips economies into recession. Is this the limit to growth?
Written By: - Date published: 1:12 pm, April 28th, 2010 - 60 comments
Written By: - Date published: 10:55 am, March 10th, 2010 - 41 comments
The world’s economy has not truly recovered from the recession, it has just been artificially reanimated by vast injections of Government bailout money.
What happens when taxpayers get the bill? The people of Iceland just voted not to pay. This may be the first in a cascading series of failures of “sovereign debt”. If so, the next crash will make the recent recession look like child’s play.