The beggared neighbour

Written By: - Date published: 9:37 am, December 20th, 2012 - 12 comments
Categories: exports, jobs - Tags:

Japan just elected a Liberal Democrat government promising more jobs through a huge quantitative easing programme. The US has stated it’ll continue QE until unemployment drops below 6.5%. The effect has been to send our dollar to new highs, killing exporters and import-exposed local businesses. Contrary to media belief, Japan and the US aren’t in worse positions than us.

Japan has a lower and falling unemployment rate and a higher growth rate. The US’s unemployment rate is systemically higher than New Zealand’s, but it too is falling sharply and may soon fall below ours. But they’re using QE any way because it is helping them to devalue their currencies against their competitors – aiding both their exporters and their local businesses.

Meanwhile, our government does nothing and the dollar surges. Sure, that means cheaper consumer imports. But at what cost? 40,000 jobs lost in manufacturing, 7,000 lost in tourism, a claiming current account deficit as exports fall and imports rise. What does it matter if flat-screen TVs are cheap for the 300,000 jobless and 100,000 underemployed Kiwis?

We are heading for a Greece-like situation where we have massive foreign debts, all our shit is foreign-owned, and we don’t have the productive capacity left in the country to get back to an even keel.

Yet, the tools of orthodoxy in the mainstream media stomp on any suggestion of change. They’ve been drinking the neoliberal kool-aid so long that they think it’s all there is.

12 comments on “The beggared neighbour”

  1. AsleepWhileWalking 1

    Japan is substanitally worse off and we can expect a currency collapse sometime soon.

    It has nothing to do with employment rate, but rather government bonds that were issued.

    • Galeandra 1.1

      ‘substanitally worse off ‘

      Care to explain with citation/s?

    • aerobubble 1.2

      The argument I believe is this, that much future wealth was speculated to exist based on continuing cheapening supplies of energy. Over the period of cheap energy inflation was hidden, pollution, erosion of support systems, financial, ecological, social, could be managed as an opportunity for activity. But since capitalism as we have it today focuses on short terms, locking in rent seeking activity, so they essentially target the symptoms rather than the causes (the government role).
      In this context, US, Japan are just regions of one global nation, akin to Greece to the Eu, we are all awash in the same bath tub, with the same dirty water, so it more plausible to assume we should be
      do QE, and ask why we aren’t and what rewards there are for not doing so. I would argue that
      selling assets when money is devalued is pathetically stupid, why sell when we can print. Also holding ones breath for decades with tight policy, when suddenly the cycle turns and we can loosen money into our economy why aren’t we, why can’t we have a quite deep breath for all our hard work, aren’t we due a relaxation of rabid neo-liberal inflation targeting? What better time to do it. So we come to the reason why not, well higher inflation would actively help debtors write down debt, it would harm savers, it would boost incomes for exporters and harm voter buying power, and could cause a massive round of bankruptcies and foreclosures on middle stupid NZ that needs two cars and lavish indebtedness and servitude to their betters.

  2. vto 2

    So what is John Key going to do about this? Does anybody know?

    because there aint no doubt that it is going to happen ….

    • David Viperious H 2.1

      Nothing he’ll be in his house in Hawaii. He’s not going to do anything, so maybe he is going to turn our country into another Greece, so that the bastards can ‘bail us out by stealing the 20 billion in the Kiwi Saver and then Austerity as the like has never been seen. Then we would need a strong government to tell em to get stuffed like Argentina did. And that we A’int got.

  3. PlanetOrphan 3

    Well said Eddie, we need “Good Inflation” in NZ, and yes there is a lot of hype out there about good and bad inflation.

    The Gnats’ believe in “Good Deflation”, but they are profiteers and will never care about the average Kiwi getting a livable wage/salary.

    The Gnats’ wont be happy until they are the only one who can hand out charity, and it’ll only be given to people they “Like”.

  4. Richard 4

    Please, tell me more about your expertise with regards monetary policy above the zero lower-bound. I am sure you are well qualified to discuss this technical issue.

    Oh, and by the way, the Japanese economy contracted by 0.9% in the third quarter.

    • Shane Gallagher 4.1

      How about Switzerland? It is printing money explicitly to keep its franc devalued. So tell me about that… 🙂

    • bad12 4.2

      Your a funny wee chap aint you, seriously do you ever actually THINK, because from what i have read if it was not for the work that has been carried out in Christchurch associated with earthquake recovery the New Zealand economy in the last year is shown to have shrunk by at least 2%,

      Even then we have to question the ludicrous way in which the Bean Counters measure our economic activity when they class earthquake recovery as GDP, surely just one more fucking big lie in a whole series of fucking big lies that have as an end result a succession of Governments mis-managing the economy by institutional design and that’s befor the village idiot from down Dipton way has been let loose to play ‘betcha i can create as much unemployment as i did last time’ with the economy,

      Think about it logically for just a second, how can anything in the field of demolition/construction that is occurring in Christchurch at the moment be considered as ‘growth’ and be included as a positive in GDP figures???,

      That supposed growth occurred in Christchurch over the years as the City was built up prior to the Canterbury earthquakes and in those years was recorded as that growth, rebuilding post-earthquakes is simply re-building of the prior ‘growth’ and as such should not be included in GDP figures unless the loss of the prior growth was also recorded as a shrinkage in GDP at the time of the earthquakes, (to my knowledge this has not occurred),

      So for the next 2 years Slippery and that idiot from Dipton will off of the back of rapidly expanding rebuilding in Christchurch record NZ wide GDP growth of 2% annually when in fact without such bullshit replacement of prior GDP lost to the earthquakes the true picture is going to be an overall shrinkage of GDP annually of 2% annually for those 2 years if we put to one side the activity surrounding earthquake recovery…

  5. bad12 5

    The only advantage we gain across the whole economy from having a dollar over-valued by 15-20 cents is that petrol-products in theory become cheaper,

    BUT,

    Wouldn’t you know it Slippery, the Prime Minister, announced yesterday that His Government would seize that advantage for the Governments coffers by rack renting the taxes on those products over the next 2-3 years…

  6. geoff 6

    I think that maybe this article is completely misinformed.

    Japan’s debt to GDP ratio is one of the highest in the world (second only to Zimbabwe, according to wikipedia) and many commentators have said that its currency is about to collapse. From what I understand, it is not in a strong economic position.

Recent Comments

Recent Posts

  • Time for a breather on immigration
    National has no idea how to house the record number of people entering New Zealand, let alone cope with the pressure on health, education, and transport from this record population growth, says Labour’s Immigration spokesperson Iain Lees-Galloway. ...
    1 day ago
  • Labour to invest $4 billion in education
    Labour’s Education Manifesto will bring positive change across the education sector and is backed by a massive investment, says Labour’s Education Spokesperson Chris Hipkins.  “Labour’s plan will see an extra $4 billion invested over the next four years. It’s organised ...
    1 day ago
  • National’s shame: worst homelessness in the OECD
    National’s legacy is a housing crisis that has given New Zealand the worst homeless rate in the developed world, says Labour’s Housing spokesperson Phil Twyford. ...
    2 days ago
  • Labour taking action on school donations
    Labour will end so-called voluntary school donations for the majority of parents across the country under its $4 billion plan to revitalise the education sector, says Labour Leader Andrew Little. “Labour has always been committed to a world-class free education ...
    2 days ago
  • Labour to work with Queenstown to build more houses
    Labour will work with Queenstown-Lakes District Council, iwi, and the Community Housing Trust to build the modern, affordable housing Queenstown desperately needs, says Leader of the Opposition Andrew Little. ...
    2 days ago
  • Nats blow the Budget on motels after bowling state houses
    National is spending $140,000 a day putting homeless families in motels, the legacy of nine years of selling off and knocking down state houses, says Labour Housing spokesperson Phil Twyford. ...
    2 days ago
  • New revelations in Joanne Harrison report
    The State Services Commission’s report into the treatment of whistle-blowers by Joanne Harrison has revealed new accusations against the convicted fraudster, says Labour MP Sue Moroney.  “The report found that four staff inside the Ministry of Transport who had raised ...
    2 days ago
  • Snafu at Princess Margaret
    Jonathan Coleman has to stop the stalling over a new building for mental health services in Christchurch to replace the quake damaged Princess Margaret Hospital, says Labour’s Health spokesperson David Clark. “The Government must accept that Christchurch is still recovering ...
    3 days ago
  • Labour’s fiscal plan to build a fairer New Zealand
    Labour will re-build our housing, health and education while responsibly managing New Zealand’s finances, says Leader of the Opposition Andrew Little.  “Under Labour’s Fiscal Plan we will deliver big investments in the services we all need and care about, invest ...
    3 days ago
  • Nats show they’re the tax dodgers’ best friends
    The government is taking the knife to IRD at a time when we need a highly skilled department to ensure that multinationals and speculators don’t get away with dodging tax, says Labour’s Revenue spokesperson Michael Wood. ...
    3 days ago
  • Labour secures the future for NZ Super
    A Labour Government will secure the future for New Zealand Superannuation so we can continue to provide superannuation to those retiring at age 65, says Leader of the Opposition Andrew Little. “One of the first things a Labour-led Government will ...
    4 days ago
  • Multinationals must pay fair share of tax
    A Labour Government will crack down on multinational companies that are dodging paying their fair share of tax, says Labour Leader Andrew Little. “New Zealanders are missing out by hundreds of millions according to the IRD because multinational companies can ...
    5 days ago
  • ACT’s approach to children backward and ill informed
    Act’s new deputy leader’s claim that Labour’s support for families could “extend the misery of child poverty and even child abuse” is ill informed and offensive, says Labour’s Deputy Leader Jacinda Ardern. ...
    1 week ago
  • Canterbury hatchet job a disgrace
    The Government’s glib acceptance of advice that the Canterbury District Health Board doesn’t need more money is a hatchet job and a disgrace, says Labour’s Health Spokesperson David Clark. “To claim that the DHB was using tactics to leverage more ...
    1 week ago
  • Quality for Kiwi kids at ECE
    After more than a decade of rapid growth in the number of children participating in Early Childhood Education (ECE), it’s time to take stock and map out a clear plan for the future, says Labour’s Education spokesperson Chris Hipkins. ...
    1 week ago
  • Labour to boost ECE quality
    Labour will ensure kids get the best start in life by boosting funding for Early Childhood Centres to employ 100 per cent qualified and registered teachers, says Leader of the Opposition Andrew Little. ...
    1 week ago
  • Labour will stump up a million dollars for Maniototo Hospital
    A Labour led Government will make a million dollars available to rebuild the Maniototo Base hospital in Ranfurly, says the Leader of the Opposition Andrew Little.  “This will be a much needed boost for a long overdue rebuild that has ...
    1 week ago
  • No vision for the West Coast
    The West Coast welcomes any Government investment in our region but the lack of any real alternative vision for the West Coast’s economy is disappointing, says Damien O’Connor Labour’s West Coast-Tasman MP.  “The establishment of a Mining Research Unit will ...
    1 week ago
  • National’s youth work scheme too little too late
    After nine years, National’s belated attempt to provide work opportunities for unemployed youth should be seen for what it is, a half-hearted, election gimmick from a party that’s ignored the problem till now, says Leader of the Opposition Andrew Little. ...
    1 week ago
  • Kiwis won’t fall for Joyce’s spin
    Steven Joyce’s embarrassingly obvious spin on Labour’s Families Package won’t fool anyone, says Labour’s Finance spokesperson Grant Robertson. ...
    1 week ago
  • Labour prioritises families and public services
    Labour’s Families Package delivers a bigger income boost to more than 70 per cent of families with children than Budget 2017. By not spending $1.5 billion a year on tax cuts, Labour is able to do more for lower and ...
    2 weeks ago
  • Kiwis can’t sleep in your ghost houses, Nick
    The Government’s housing infrastructure announcement is another Nick Smith special – over-promising with no detail on delivery, says Labour’s Housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Labour helps older New Zealanders and low income families with winter heating bills
    Labour will further boost its commitment to warm, healthy housing with a Winter Energy Payment for superannuitants and people receiving main benefits, says Leader of the Opposition Andrew Little. “Everyone deserves a warm, healthy home to live in. But that’s ...
    2 weeks ago
  • National must rule out retrospective override for Ruataniwha
    National must categorically rule out using retrospective legislation to override the Supreme Court’s decision that the land swap of conservation land flooded by the proposed Ruataniwha Dam was illegal, says Labour’s Shadow Attorney General David Parker. “Having not got their ...
    2 weeks ago
  • Flavell’s failure a win for Māori landowners
    The Māori Development Minister’s admission that his unpopular Ture Whenua Māori Bill won’t pass into law prior to the election is a victory for Māori landowners, but only a change of government will keep the Bill gone for good, says ...
    2 weeks ago
  • Stats confirm growing housing shortfall
    National’s failure to fix the housing shortage has been starkly illustrated by new statistics, says Labour Housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Systemic abuse of kids in state care
    After admitting there was systemic abuse of children in State care the Government must do the right thing and launch an independent inquiry, says Labour’s Deputy Leader Jacinda Ardern. ...
    2 weeks ago
  • Migrant worker exploitation needs sharper focus
    The astonishing number of employers found guilty of exploiting migrants shows that migrant exploitation is a serious problem in New Zealand, says Labour Workplace Relations and Safety spokesperson Iain Lees-Galloway. “A total of 53 companies have been banned from recruiting ...
    2 weeks ago
  • Minister faces questions over dam debacle
    Today’s Supreme Court ruling dismissing an appeal to allow a land swap for the controversial Ruataniwha Dam is a victory for our conservation estate and Hawke’s Bay ratepayers, but leaves the Conservation Minister with serious questions to answer, says Ikaroa-Rāwhiti ...
    2 weeks ago
  • Too little too late on Wellington housing
    The announcement today on social housing in Wellington by the National Government is a pitiful and cynical election ploy, says Labour’s Wellington Central MP Grant Robertson. “In 2012 Housing New Zealand emptied out the Gordon Wilson Flats, taking 130 places ...
    2 weeks ago
  • Foreign trusts wilt in the sunlight, but more transparency needed
    The fact that the numbers of foreign trusts registered in New Zealand has plummeted after the Government’s belated and reluctant imposition of a new reporting regime, in the wake of the Panama Papers scandal, shows the need for a transparent, ...
    2 weeks ago
  • Speech by Grant Robertson: The Future of Work and Labour’s Economic Vision
    At the election in September voters will face a choice between a government led by Andrew Little with a fresh approach to give every New Zealander a fair share in prosperity or the continuation of a tired government, out of ...
    3 weeks ago
  • Swimmable Rivers Tour: Waikato
    Last week, we rolled up to the mighty Waikato on the final day of our swimmable rivers tour. Co-Leader James Shaw, Denise Roche MP and I started our day in Horotiu where the primary school has been focussing on the ...
    GreensBy Catherine Delahunty
    3 weeks ago
  • Nats’ failure to train young people contributes to housing stall
    Budget documents forecast that housing construction will stall in the coming year, despite the massive housing shortage, and National’s failure to train young people in building trades is partly to blame, says Leader of the Opposition Andrew Little. ...
    3 weeks ago