The Two Nations: or, Why Won’t They Bail Me Out?

Written By: - Date published: 11:47 pm, January 11th, 2011 - 38 comments
Categories: capitalism, class war - Tags: ,

Of all the mysteries of the present financial crisis, the most baffling is why government agencies have gone to such lengths to protect the value of bad investments made by large institutions and multi-millionaires.

After all, under the rules of the capitalist game, owners of shares and bonds are supposed take a “haircut” if the investment goes bad. And it’s also an Economics 101 principle that if you give relief to the little people, that will have a more stimulating effect on the economy than if you bail out the wealthiest interests in society.

For instance, in the Scandinavian financial crisis of the early 1990s the Swedes made the shareholders take a haircut; and something similar has just happened in Iceland. The result is a short sharp shock and then everything gets back to normal.

But nearly everywhere else we’ve seen governments throwing money at the banks so as to preserve the value of their shares and bonds regardless of who they are owed to, while slashing social spending and, in America, forcing those who owe the mortgages into a new kind of slavery, even as the country slides into gloom and depression. And the politicians are doing so even when they were elected on the opposite platform, like the UK Liberal Democrats.
Perhaps the answer lies in an interview recorded nearly two years ago with US Representative Paul Kanjorski, in which Kanjorski explains that of course it would make more sense to bail out the little people and force the investors to face up to their bad investments and shoky pyramids; but the problem is that any attempt to do so would lead to a total run on the banks by investors.

One can think of all kinds of possibilities for a sensible, Swedish-style solution, such as a government-backed write-down in the value of both real estate and mortgages. Nearly everyone agrees that real estates and mortgages have been inflated by a financial bubble to levels far above their ‘real’ value, and are acting as a drag on the rest of the economy as a result. That is the most serious aspect of the present financial crisis. Nonetheless, it seems impossible get Humpty Dumpty off the wall.

Why is such a solution impossible? Perhaps, at the root of the political impasse, is the simple fact that the top 1% in the still-very-influential USA owns more than the bottom 90% . Much of the wealth of the top 1% is currently in inflated real estate values. And these are also the people who fund the political parties. Lastly, the anonymity of the modern market system means that the owners have no social ties with those who owe; it is a generalised condition of absentee landlordism.

And so America now resembles 1840s Europe, Britain or Ireland, in the sense of being:-

Two nations between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets. THE RICH AND THE POOR.

(Benjamin Disraeli, Sybil: or, the Two Nations, 1845)

Of course America herself has been two nations before [a conflict itself arising from the plantation owners, the capitalist elite of the day, trying to maintain the source of their privilege – Marty]. And so, under conditions that resemble the explosive, yet paralysing, economic tensions of the mid-nineteenth century, over absentee landlordism, capitalists and workers, and slave property, the two nations are locked in a struggle with no easy way out. To conclude on a touch of suitably Victorian melodrama, they are like Holmes and Moriarty clutching each other’s throats at the top of the Reichenbach Falls (download The Final Problem). How long till someone slips? How long till 1848? Or, let’s hope not, 1861?

ChrisH

38 comments on “The Two Nations: or, Why Won’t They Bail Me Out? ”

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  1. Colonial Viper 1
    12 January 2011 at 12:54 am

    I think you’ve just invited all the Right Wingers and Neocons to come on and start spouting “hey we don’t think there should have been any corporate welfare, we don’t think the big banks should have been bailed out” etc etc

    (Although of course they do, anything which transfers public money into private hands is something that their wealthy business and political leaders will always support and which fits right in with the Right Wing ethos of envy and greed).

    At the end of the day the answers are relatively simple: basic banking should be reconstructed as a nonprofit community utility and investment banking completely firewalled off from the real economy.

    Further, all our money should cease to be issued as debt based private bank cash. Instead it should be issued as a debt free dollar by the Government.

  2. McFlock 2
    12 January 2011 at 4:03 am

    To be fair, a lot of RWNJs have been saying that the bailouts were a moral hazard, etc, so it’s further proof that truly free markets have never been tried. Whatever.

    The other big difference between the approach of bailing out the rich vs bailing out the poor is that more kids die if the former is followed rather than the latter. A quick lit review here (look under “longtitudinal studies”) suggests that Sweden had a neglible impact on infant mortality during it’s recession mentioned above, but Peru experience 17,000 more infant deaths a few years previously in its (admittedly apparently more severe) recession a few years previously.

    I saw on the news the other night an article about people using the emergency department at hospital more often now, instead of visiting their GP, with the cost as a major factor. That’s a classic example of poor access to primary healthcare having greater impact on the health system than just making it free – but that solution just doesn’t compute these bright and right shiney days.

  3. appleboy 3
    12 January 2011 at 7:31 am

    I know a couple who earn $150K each. He was sick recently (stomach bug) and went to A&E ( to save $50 seeing the doctor). He then complains about people ripping off the system and the government needing to tighten up benefits, ACC etc . Now just who is rorting here? They missed the irony of it all…and of course complained about the 3 hour wait….

    • ZeeBop 3.1
      12 January 2011 at 9:32 am

      Everyone on the left should get their head out of their behinds, they don’t need to wait for Labour to win the election and solve everything, not like Labour will anyway.

      The above article makes a brilliant point. That if there is no social connection between the in debted – lots of people on the left and right – and the holders of the debt then society becomes very mean.

      Everyone who has a mortgage can renegotiate that mortage! So what we need is to re-negotiate our largest debt and take that debt to local socially connected institutions, like local building and credit unions.

      So Labour should build a super fund that holds NZ mortgages for NZ by NZ and of NZ.
      But you can start by shifting your debts to local financial providers! Not Ozzie banks.
      And we will begin to stop the profits flowing out of NZ.

  4. Orangepeel 4
    12 January 2011 at 8:56 am

    “I think you’ve just invited all the Right Wingers and Neocons to come on and start spouting “hey we don’t think there should have been any corporate welfare, we don’t think the big banks should have been bailed out” etc etc”
    100% correct there.

    “Although of course they do, anything which…the Right Wing ethos of envy and greed”
    Hold on! What? How does that work? Who made the public money? Why would Right wingers (like me) be in favour of government interference with business? Isn’t that a contradiction?

    “At the end of the day the answers are relatively simple: basic banking should be reconstructed as a nonprofit community utility and investment banking completely firewalled off from the real economy”
    Even though it’s profit which has been the driving force to success more than anything…

    “Further, all our money should cease to be issued as debt based private bank cash”
    Agreed.

    “Instead it should be issued as a debt free dollar by the Government.”
    What? No! The government shouldn’t have all that money in the first place. FDR prolonged the Depression in America with HIS spending.

    • Zaphod Beeblebrox 4.1
      12 January 2011 at 9:04 am

      What, go back to the gold standard? Lack of liquidity is what help start the great depression in the first place.

    • Draco T Bastard 4.2
      12 January 2011 at 11:29 am

      Hold on! What? How does that work?

      By the normal capitalist method of transferring all the wealth to the few.

      Who made the public money?

      This question makes no sense whatsoever.

      Even though it’s profit which has been the driving force to success more than anything…

      Profit isn’t the driving force for most of humanity – only the psychopathic. In fact, it’s the profit motive that drives the psychopathic that causes the economy to collapse as it channels all the wealth into very few hands.

      The government shouldn’t have all that money in the first place.

      You totally mis-read what he said. Money is presently printed, with almost no limits, by the private banks (It’s how they make such massive profits). Now, what he actually said was that the printing of money should be done by the government alone and that it shouldn’t have interest on it and that the private banks shouldn’t print any money at all.

      • Orangepeel 4.2.1
        12 January 2011 at 11:38 am

        “By the normal capitalist method of transferring all the wealth to the few.”
        Capitalism has not transferring of wealth whatsoever; it is nothing but wealth being produced and spent (spent could be counted as EQUAL transfer if you will).

        “This question makes no sense whatsoever.”
        I was getting at how government can’t create wealth. Ever. It can only take from INDIVIDUALS who PRODUCED the wealth.

        “Profit isn’t the driving force for most of humanity”
        Economically it is. Are you seriously saying that most people aren’t out for their best self interest?

        “In fact, it’s the profit motive that drives the psychopathic that causes the economy to collapse as it channels all the wealth into very few hands.”
        No, it was relaxed fraud laws that allowed bankers to cheat people, and lead to the collapse. If there’s any channeling of wealth, that immediately destroys an argument calling it capitalism.

        • Draco T Bastard 4.2.1.1
          12 January 2011 at 1:14 pm

          Capitalism has not transferring of wealth whatsoever;

          Capitalists don’t create wealth so the way that they get it is by transferring the wealth that is created from the people who create it.

          I was getting at how government can’t create wealth.

          Governments are the representative of the individuals in the society and are there to administer the societies wealth. Individuals, by themselves, cannot create wealth, they can only do so when they belong to a society as the society provides the resources and infrastructure that allows them to do so. The government printing the money is a recognition that the resources belong to the community.

          Economically it is. Are you seriously saying that most people aren’t out for their best self interest?

          Economically, most wealth comes from the environment. Most people just want something to do – as long as they have somewhere to live and enough to eat profit means nothing.

          No, it was relaxed fraud laws that allowed bankers to cheat people, and lead to the collapse.

          Sure, the laws were relaxed – at the behest of the bankers. Bankers always cheat, they’ve been doing so for 5 centuries (and probably longer but I’m not sure if they used a banking system in Roman times).

          If there’s any channeling of wealth, that immediately destroys an argument calling it capitalism.

          The heart of capitalism is a form of ownership that enforces channelling of the wealth to the few. That’s why the capitalists keep wanting to privatise (remove the wealth from the community) everything.

        • Benson 4.2.1.2
          17 January 2011 at 1:25 am

          “Are you seriously saying that most people aren’t out for their best self interest?”

          We shouldn’t be. I’m certainly not only out for my economic self interest, that would be rather selfish given that my gains would come at the expense of others. Profit should never be a priority.

          As for government only taking wealth from others, that’s actually precisely what capitalism does. It is the worker (or ‘individual’) who creates the wealth. He is alienated from that wealth when it is appropriated by the capitalist.
          CAPITALISM “can only take from INDIVIDUALS who PRODUCED the wealth.”

          • Orangepeel 4.2.1.2.1
            17 January 2011 at 6:31 am

            “We shouldn’t be. I’m certainly not only out for my economic self interest, that would be rather selfish given that my gains would come at the expense of others. Profit should never be a priority.”
            The average person, no matter how good or bad they are, will hold the highest incentive when working for their own best interests; it’s human nature. Even if it wasn’t, there’s nothing stopping them from giving their wealth to whom they want. If profit isn’t the priority, then how do they expect to gain the wealth for their interest (IE helping the poor, donating to any foundation, etc)?

            “As for government only taking wealth from others, that’s actually precisely what capitalism does. It is the worker (or ‘individual’) who creates the wealth. He is alienated from that wealth when it is appropriated by the capitalist.”
            The Capitalist who refuses to give the worker his fair share is committing suicide in the competitive market: rival Capitalists know that they can persuade the workers to join them by offering a fair share of resources, working out for both the worker’s and the rival Capitalist’s self interest – they benefit each other.

            • mcflock 4.2.1.2.1.1
              17 January 2011 at 11:25 am

              Here’s an interesting slide – the emphasis is added by me:

              “We shouldn’t be. I’m certainly not only out for my economic self interest, that would be rather selfish given that my gains would come at the expense of others. Profit should never be a priority.”
              The average person, no matter how good or bad they are, will hold the highest incentive when working for their own best interests; it’s human nature. Even if it wasn’t, there’s nothing stopping them from giving their wealth to whom they want. If profit isn’t the priority, then how do they expect to gain the wealth for their interest (IE helping the poor, donating to any foundation, etc)?

              There’s a difference between keeping profits in mind and just leaving your morality at the office door. Profit “maximisation” versus “satisfycing” – i.e. rather than doing a cost-benefit analysis on recalling an unsafe product, remembering that you’re responsible if the product kills someone and recalling it as a matter of principle.

              As for your market analysis of the job market, you repeat the habit of forgetting that the power is weighted towards the capitalist, not the worker. Almost always there are fewer jobs than there are workers – and the capitalist is less likely to lose their home if they don’t have a receptionist for a few weeks, but the receptionist could well lose their home if they’re unemployed for a few weeks.

              • Orangepeel …
                17 January 2011 at 10:45 pm

                That’s fraud, and that’s dealt with people who dislike it paying voluntary taxation to the government for more regulation on fraud.
                Or it’s like a factory with poor health and safety. IF there is a business that dares to hold poor health and safety in the competitive market the consumers and/or the workers (who can also serve as consumers) will want to know about how safe their products are. If they aren’t safe, what’s stopping them from purchasing products from a safer company?
                The company with greater safety will attract more customers, make more profit, and force the other companies to buck up their standards if they want to compete.

                On the contrary, the competitive market creates a surplus of jobs for workers. The mixed economies who call themselves capitalist yet hold total government regulations have reduced the amount of jobs there could be.
                Actual free markets create a competitive market without the use of government regulations, and that in itself puts the worker almost as high up as the consumer.
                A Capitalist could NEVER afford to exploit his workers. Workers are the resource needed for corporate expansion, and to abuse them would mean they could simply work for a rival company.
                Now, normally there wouldn’t be the enough of a rival company to take in workers, but being in the position it’s in it would really be a whole lot of workers filling in better positions needed for the rival company to expand as well as a better position the workers want.
                ‘Capitalists’ have never been able to reach their position of holding power over its workers without government assistance.

                • Colonial Viper …
                  17 January 2011 at 11:06 pm

                  On the contrary, the competitive market creates a surplus of jobs for workers. The mixed economies who call themselves capitalist yet hold total government regulations have reduced the amount of jobs there could be.

                  Meh, you do realise we’ve actually lived your Chicago School free market BS for decades now and have figured the game out for ourselves? The US has exported tens of millions of jobs away from its own citizens to bottom of the pay barrel nations, while diverting 80% of all the new income generated from using cheap foreign labour to the richest 1% of Americans.

                  If they aren’t safe, what’s stopping them from purchasing products from a safer company?

                  I dunno, maybe the fact that the same Chinese toy factory making the same unsafe lead painted toys might supply dozens of different branded US based companies in your local store, and a consumer is never ever going to know which brand is safe or unsafe – because they are actually all made by the same cut price factory in Shenzhen.

                  And in some cases the only way that a consumer is going to find out something is unsafe is to die from the product.

                  This has been the case with many blockbuster drugs in the last 10 years.

                  Bottom line – free market neoliberalism is BS.

                  ‘Capitalists’ have never been able to reach their position of holding power over its workers without government assistance.

                  Which in the US they have had for the last 35 continuous years. Probably the last real President the US had was Kennedy. He didn’t last long.

                  In fact the US Government doesn’t represent the people any more, it represents business and industry interests, and also the top 1% of people who own more financial wealth in the US than the bottom 95% put together.

                  It’s a plutocracy my friend and you are spieling the same plutocratic lines which have finally given the richest 1% of Americans a 23% share of the nations total income.

                  • Orangepeel …
                    17 January 2011 at 11:13 pm

                    You’ve compared free market neo liberalism to China and the US. Your argument is invalid. NEITHER are free economies… especially not China. Two mixed economies trading with eachother should tell you there are problems.

                    • Colonial Viper …
                      17 January 2011 at 11:48 pm

                      Oh I see. In that case, good on you for backing Chicago School free market neoliberalism, a capitalist system which exists nowhere in the world except in textbooks. Not a single country of any wealth runs a truly free market neoliberal economy as you define it. Why? Because it’s a total unworkable fiction.

                      Seriously. The US is a plutocracy and the top 1% of wealth holders own more assets than the bottom 95% put together.

                      And guess what, that top 1% don’t want truly free markets they want markets slanted towards them. For the last 35 years this has been their pet project and it has worked damn well. 80% of all new income generated in the US over the last 3 decades has gone to the top 1% of individuals.

  5. Orangepeel 5
    12 January 2011 at 9:06 am

    Not at all! Government interference has worked in the past (It worked GREAT in Nazi Germany) but for a better (and quicker) solution would have been LESS interference.

    • Bright Red 5.1
      12 January 2011 at 9:45 am

      Orangepeel – you’re American eh? Well, government ‘inteference’ built your freeways, and hospitals and schools, and keeps the streets safe, and makes sure the food you eat is safe, and makes sure that workers get a minimum standard of pay and working conditions, and gives you legal protections for your property and rights, and courts to unhold them in, and a currency you can use of agreed value, and has foiled how many terrorist plots?

      There is a country without a government. It’s called Somilia. Funny how you Randites aren’t flocking to live there.

      • Orangepeel 5.1.1
        12 January 2011 at 9:55 am

        “Orangepeel – you’re American eh”
        Half.
        “Well, government ‘inteference’ built your freeways, and hospitals and schools,”
        Taking the role of a business I see. How corporatist.
        “get a minimum standard of pay and working conditions”
        Minimum standard of pay has brought about nothing but inconvenience for not just the business, nor has it benefited the individual. My sister couldn’t get a job because no company could AFFORD to pay her the minimum wage.
        Along with abolition of the minimum wage should come abolition of taxes. That way, there’s competition of companies to gain employers to gain resources. If one company exploits it’s workers, another company can easily say “Hey! Rather than paying you $1 an hour. We’ll pay you 2! For half the work!” Now the workers will all leave the exploiting business for the higher pay job, benefiting all seeing as how the company sacrificed low wages for employees, which benefit them in the long run. Now all a company has to do to get employees if offer a higher wage which makes exploitation impossible in the free market.

        “gives you legal protections for your property and rights, and courts to unhold them in, and a currency you can use of agreed value, and has foiled how many terrorist plots?”
        Same thing achievable by VOLUNTARY taxation: if I want the government protection due to terrorism and crime, a demand for it is created. How do you satisfy your demand? Buy it like a product through voluntary taxation.
        “There is a country without a government. It’s called Somilia.”
        It’s called SOMALIA. And they don’t know about economics and have had corrupt leadership for years.

        • mcflock 5.1.1.1
          12 January 2011 at 11:23 am

          “It’s called SOMALIA. And they don’t know about economics and have had corrupt leadership for years”

          Oh, economics only works if you know all about it?

          I guess that your economic theories don’t apply to NZ, then, given that apparently the majority of the population are ignorant about economic matters.

          And Somalia has had weak leadership for years, preceded by a state of anarchy after the fall of the Soviet Union.

        • Zaphod Beeblebrox 5.1.1.2
          12 January 2011 at 11:28 am

          In Somalia no one takes an interest in the needs to the individual or the public good. The government is simply a means to channel wealth to certain individuals.

          Why would this be any different if we subcontracted such things to private corporations and business- Somalia (or Russia for that matter) are the perfect example of what would happen .

        • Draco T Bastard 5.1.1.3
          12 January 2011 at 11:31 am

          This is the type of society that you’re promoting.

        • Roger 5.1.1.4
          13 January 2011 at 1:25 am

          “If one company exploits it’s workers, another company can easily say “Hey! Rather than paying you $1 an hour. We’ll pay you 2! For half the work!” Now the workers will all leave the exploiting business for the higher pay job, benefiting all seeing as how the company sacrificed low wages for employees, which benefit them in the long run. Now all a company has to do to get employees if offer a higher wage which makes exploitation impossible in the free market.”

          1: Do you have any empirical evidence to suggest this actually happens in any country without a minimum wage? If so is it the exception rather than the norm?

          2: If the second company is paying the 4 times the wages for the work, what is there to stop the first company or another competitor that pays $1 for double the work undercutting the higher paying company on the price of the end product and taking all of their market share?

          3: If such low wages are allowed, where is the incentive to innovate and bring in new capital and technology to improve productivity and lift living standards for all?

          4: Wages paid ends up being money invested or spent. If there is no minimum wage and the market equilibrium is significantly lower (even $2 per hour) how is the business going to get enough turnover to meet its fixed costs? I do not want an answer that involves one group of people being exploited for the benefit of another group. If the business struggles what will it do? Sack people or reduce pay back to $1?

          You allegedly have something in common with the people of Somalia, a lack of knowledge about economics.

          • Descendant Of Smith 5.1.1.4.1
            13 January 2011 at 2:53 am

            If you take picking apples as an example the orchardists moan when New Zealanders jump the fence and go next door to the orchard paying a higher bin rate.

            With cellphones and texting word gets around very quickly these days if someone is paying a higher rate – or they leave when say the third pick starts to work on an orchard where they are just starting on the first pick – you can make more money on a first pick cause there are more apples on the tree and the easy ones haven’t already been taken off.

            Yep they say it just proves that New Zealanders are lazy and don’t want to work and we need overseas workers. No mention of the reason why they left that particular orchard – or the one that has no toilet facilities.

            Of course with the overseas workers they can’t leave the orchardist who has bought em here and they, the employer, can do things in the quiet weeks such as still pay them for 30 hours work even though they worked 15 and take it out of their later pay when they work longer hours.

            Would they do the same courtesy for the NZer’s – not on your nelly.

            And before anyway starts suggesting I’m opposed to overseas workers I’m not – there lots of good reasons why they should be used but for this post it illustrates a real life scenario where the employer doesn’t lift their pay rates to compete for workers – they increase the request for overseas workers and modify their paying practices to meet the requirements of 30 hours work per week.

            Back to bed now – only got up cause a dog was chasing our cat.

  6. Afewknowthetruth 6
    12 January 2011 at 9:28 am

    The writer is obviously detached from reality.

    ‘The result is a short sharp shock and then everything gets back to normal.’

    We are living in a post peak oil world. Nothing can ever ‘get back to normal’ because what people believe to be normal is actually a short-lived aberration in the grand scheme of things, brought about by abundant and cheap fossil fuels.

    Cheap and easy extraction of fossil fuels is no longer possible, and as the peak oil predicament worsens there will be less and less energy available to do anything (and what is available will be at a much higher price). The peak in global per capita energy was around 1979 and now we face a decline in total global energy.

    Orthodox economics is a set of fantasies and fabrications that have been foisted upon society by a gang of liars and thieves. The fundamaental flaws in othodox economics (failure to take account of energy, resources and environment, which all magically appear as required) have now been clearly exposed, and the complete collapse of present economic and socail arrangements is inevitable. It will occur fairly soon.

    The powers that be recognise this and are engaged in one final looting of the till exercise.

    It is increasingly clear that most people, rather than acknowledging and dealing with the realities of peak oil and environmental collapse, prefer to pretend there are no ‘elephants in the room that are gradually destroying the furniture’.

    Better living through denial?

    • M 6.1
      12 January 2011 at 11:51 am

      Afewknowthetruth

      ‘Orthodox economics is a set of fantasies and fabrications that have been foisted upon society by a gang of liars and thieves.’

      Chris Martenson’s Political Economy is an interesting post – I particularly liked the reply by blogger Travlin:

      Dr KrbyLuv

      You have raised an interesting issue and provided good examples. I think the essence of the answer is in this quote.

      There was a guy named von Clausewitz who said, ‘War is a continuation of politics by other means’. (I say) Politics is a continuation of economics by other means. — Michael Ruppert

      Economics as an academic discipline is fairly recent. Not much over 100 years old I think. To gain respectability economist have worked hard to divorce themselves from the political sphere and portray their work as an objective science. They largely ignore the shared assumptions and biases they build upon and the political influences these reflect.

      Modern economies are so complex that simplifications are required to explain anything. For example, economist are notorious for ignoring the human factors by assuming everyone acts rationally. When business school graduates enter the real world they quickly have to jettison much of the knowledge they paid a high price to acquire, if they want to survive.

      Over the past few decades economists have tried to be more “rigorous” by focusing on models based on complex math. In the process they increasing ignore reality as they admire the beauty of their elegant theories.

      It is now clear that most economist have misread past and current trends to such an extent that they have shown how bankrupt their profession is. Many of them have prostituted themselves by justifying the actions of the people who pay them well, and acting as cheerleaders to bring in more suckers. They provide a respectable front for the pirates. One thing they have done very well – they have thoroughly discredited themselves.

  7. jcuknz 7
    12 January 2011 at 9:36 am

    Orangepeel … Roosevelt prolonged the depression by listening to the right wingers rather than holding true to what he had done in his first term. For his seciond term he cut back on the stimulous packages that had made his first term so successful. That is economics 101 too.

    When this discussion takes place I think of all the small investors who in New Zealand have lost their life savings and have been left to survive on Nat Sup. Naturally it was bad advice and greed on their part for that extra one or two percent which led them astray but it was bad thinking and greed for a bit extra which caused the ‘big boys’ to fail too. Why do one get bailed out and not the others. The overall sums are not that different to my way of thinking.

    • ghostwhowalksnz 7.1
      12 January 2011 at 9:46 am

      And why were the accounting standards relaxed for finance companies in the nineties under national ?
      Its seems unbelievable now but they used to have stricter rules to protect the small investors, especially a requirement for 6 monthly audited accounts.
      But its the same old story for national , policy for sale.
      Labours hands are not too clean, thats why they are saying nothing but Dalziel fumbled with the ball for too long and was like other ministers captured by the ministry ( and financiers?)

      • Herodotus 7.1.1
        12 January 2011 at 1:42 pm

        Cannot find the source (Take my word !!) but in the lat 80’s there was a paper prepared from Treasury/Finance ministry regarding stiffenng the requirements of Finance coys, this has hung within someones draw for 30 years with no action by any govt, that includes Lab, GWW. Until the door breaks no one is interested in pre empitive legislation it is all post an event.
        Look how long it took for NZ3910 to be changed supposedly protecting the subbie from an aggressive main contractor/developer. Tell that to all those owner operators who had their sole source of income (machinery) locked away as the receiver took control of the site. Many were owned so much from 3-6 months ago that they were “co-erced” into re negotiating their rates, otherwise owed payments would be further delayed.
        The only good thing (not to sure who or when) was when the govt of the day required regarding listed coy take overs that all shareholders were to receive the same offer, previosly to that major shareholders recieived more favourable terms than small mum/dad investors, then at 90% takeover ownership were forced to comply.
        NAnd Ghost as we have seen reporting compliance is nothing when what is reported (mis) is crap and there are no real deterrents available to the authority re Inter-party transactions that ALL finance coys seem to have been involove in, to the benefit of a select few owners.
        re your comment about Lab- I just dont think they cared, and by default they protected in a big way those extremely rich pricks. !!!!

  8. dave brown 8
    12 January 2011 at 11:07 am

    The Two Nations concept is more unhelpful than helpful. It confuses class with nation.
    All the evidence shows that the two national are two classes, but instead of arriving at this understanding, both classes are bound together in one nation by chauvinism.
    How is it that the working class majority sees itself as part of ‘one nation’? How is it that the tiny capitalist minority convinces the rest of us that we are “all in it together”? That is the question.

  9. randal 9
    12 January 2011 at 12:25 pm

    these crims and sleazeballs who ran the ponzi schemes and ran off with all the money vote national.
    thats why the government wont do anything.
    the press is complicit too.
    they know who bought all those column inches.

  10. randal 10
    12 January 2011 at 12:26 pm

    time to start calling a spade a spade and stop dressing all this criminal behaviour up in pseudo policy advice talk.
    ya hear me?

  11. Descendant Of Smith 11
    12 January 2011 at 9:21 pm

    This is a perfect illustration of an Economist putting economic theory into practice:

    Start off at one place and end up somewhere totally unexpected and different having caused a whole lot of people plenty of grief in the meantime.

  12. johnm 12
    14 January 2011 at 9:15 am

    THE IRISH PEOPLE ARE STEADFASTLY WITH RIGHTEOUS OUTRAGE TRASHING THE DEAL TO BAIL OUT THE RICH WHOSE CASINO BETS WENT WRONG.
    May God Protect Global Bankers: Irish Leaders Castigated As Greatest Traitors Of All Time
    the names of Brian Cowen and Brian Lenihan are now being reviled as the villains who inflicted horrendous financial disaster upon the Irish people and forced the enslavement of future generations to a criminal cadre of International Banksters.

    The words ‘treason’, ‘traitors’, and ‘treachery’ are being increasingly used not only by ordinary citizens but also by certain politicians, economists, business leaders, and celebrities. ‘Economic treason’ was a term used by the leader of the Labour Party to describe Cowen and Lenihan’s blanket guarantee to the banks. And, incredibly, even the country’s ostensibly non-partisan police association, the GRA, accused the government of ‘treachery’ and denounced it as a ‘government of national sabotage’.
    Refer link:
    http://dailybail.com/home/may-god-protect-global-bankers-irish-leaders-castigated-as-g.html

    [lprent: My moderator instincts get aroused when I see very similar comments across two posts within minutes. I’d suggest you don’t try this as a generic practice because it draws my attention. It tends to annoy me when people start using the site as a dumping ground for cut’n’paste. ]