SO, PHIL GOFF now feels confident enough to answer questions about Labour’s TPPA stance on Paul Henry’s breakfast show. That pretty much says it all. The victory of Labour’s right-wing rear-guard (and the parallel humiliation of Andrew Little) could hardly have been expressed more forcefully. (Unless you count the populist posturing of the hyper-ambitious Kelvin Davis outside Sydney’s Villawood Detention Centre!) In the light of this latest usurpation, the two questions Labour Party members need to ask themselves now are: 1) “Why does the Labour Caucus keep destroying the Labour Party in order to save it?” And: 2) “Why is the rest of the Labour Party unable and/or unwilling to stop them?”
To answer the first question it is necessary to view the question from the perspective of Phil Goff and Annette King. In their eyes Labour is still the party that rescued New Zealand from Muldoonism, and dragged its sclerotic economy kicking and screaming into the era of free markets and free trade. Though they have learned not to say so too loudly, they remain immensely proud of the achievements of the fourth Labour government. And they absolutely will not repudiate its legacy. (When a trenchant repudiation of Rogernomics was included in the 2012 draft of Labour’s “Platform” document, it very rapidly disappeared!)
Goff and King are also acutely aware that there are fewer and fewer Labour MPs with Cabinet experience. Not surprisingly, they feel an obligation to make their own experience available to the younger occupants of Labour’s Front Bench. And, when they see an inexperienced Labour leader marching into what they perceive to be “trouble”, they understandably feel duty bound to intervene, and steer him out of it.
Many of those younger Labour leaders (Grant Robertson, Jacinda Ardern, Chris Hipkins) won their political spurs working for Helen Clark’s Government. Like Goff and King, these younger MPs took enormous pride in “their” administration’s achievements. Regarding Clark’s 9 years in office as an example of outstanding political management. Where other party members took issue with Clark’s authoritarian style, these young and highly ambitious members of the PM’s ‘apparatus’ were convinced that a highly centralised and tightly disciplined party was essential to social-democracy enjoying electoral success in the twenty-first century.
David Shearer is a curious (some would say pivotal) Labour politician. The older members of Caucus regard him not only as someone in whose hands Roger Douglas’ reforms are perfectly safe, but also as a politician whose “back-story” is sufficiently varied and exciting – not to say “heroic” – to offer some much needed competition to John Key’s rags-to-riches, state-house-to-White-House narrative. Over the past few days, as Little’s star has faded, mutterings hinting at an imminent Shearer comeback have grown louder.
Taken together, the views of these Labour MPs constitute a powerfully expressed argument for “business-as-usual” politics. A process that admits very little in the way of direct popular participation. According to this view, the will of the people is best ascertained by scientific opinion polling. Similarly, the content of party policy should be decided by properly qualified experts – and certainly not by the votes of poorly educated delegates at out-of-control party conferences. By this reasoning, democracy has never really been about giving power to the people – God forbid! The true purpose of elections is to resolve high-level disputes about the optimum management of the state and economy. Something best achieved, according to the Italian social scientist, Vilfredo Pareto (1848-1923) by “the orderly circulation of elites”.
Eruptions from below (like the election of Jeremy Corbyn in the UK) pose a deadly threat to this way of doing politics. If you’re one of the elite that is about to be circulated into office, then the last thing you need are a bunch of unruly party members determined to lay their untutored hands on the intricate machinery of government. Better by far to lose an election or three than to install the animal spirits of popular democracy on the ninth floor of the Beehive. After all, life among the elites is, in many ways, its own reward – and, eventually, your turn will come.
Why doesn’t the Labour Party organisation sweep this elitist arrangement into the dustbin of history where it belongs?
The easy answer is: “Because it’s just too bloody hard!” Members of Parliament are well-paid professionals, while most rank-and-file members are well-meaning amateurs, with jobs to go to and families to look after. In any battle between these two, therefore, the odds will almost always favour the professionals. Besides, politics is a far from congenial pastime. It’s a calling which inevitably exacts a very high psychological toll from those who succeed in mastering its dark arts. Indeed, there are some who say that by the time an aspiring MP has a reasonable chance of entering Parliament, none of the qualities that initially recommended him, or her, for the job, will have survived!
The other great impediment to the NZ Labour Party turning itself back into the vibrant, highly creative and enthusiastically democratic organisation it was in the early 1980s, is its own history. By 1989, Rogernomics had driven the Left out of the party, and, by 1994, the arrival of MMP had persuaded the Right to follow suit. What remained was a political party emptied of all conviction and passion, and absolutely terrified at the prospect of any return to the bitter factional disputes of the 1980s.
By the turn of the century, members had come to positively relish the level of control that Helen Clark and her caucus exercised over the party organisation. Over the course of the 1990s, they had come to accept the logic of Pareto’s version of democracy. The average member of the party was happy to let Helen and Michael and Phil and Annette and Steve and Trevor handle the important stuff, they were content to hand out the pamphlets, erect the billboards, make the tea.
Only a mass influx of people determined to make policy – not tea – can save the Labour Party from the self-perpetuating parliamentary oligarchy that currently controls it. Only a rank-and-file membership that is conscious of – and willing to assert – its rights has even the slightest hope of “circulating” the National Party elite out of office. Preliminary to that wholesome achievement, however, must be the selection a caucus of Labour MPs dedicated to circulating the whole oxymoronic notion of democratic elitism out of New Zealand’s political system altogether.
Interesting article.
As a Labour Party member, I’ve come around to the view that the sooner Goff leaves Parliament, the better. I’d be furious if the right-wing got their way in the end. They’re also the ones who arguably have the gun pointed at Little’s back. Just like they did with Cunliffe.
How do you know they may be trying to replace Little with Shearer, though? I mean, I’ve heard of stranger things, but I can’t see it being likely.
I agree – the plan, I believe, is to destroy Labours chances so the Natz will get in again easily and continue on with the rape and pillage of our country.
WHERE IS THE BERNIE SANDERS IN THIS COUNTRY ???
Where is the Bernie type leaders in the Labour party. No where.
He is ahead of Hillary now and it is mostly due to his standing up for the people and against these mega-greedy-corporations that are trying to own and dictate to all governments. The US people do not trust Hillary just as any thinking and intelligent person here in NZ does not trust Donkey
Jonkey.
Both of the two main parties here are ineffective, as in the states, and it is the PEOPLE WHO UNITE AND CHANGE LAWS – ETC. – THAT MAKE THE DIFFERENCE. These idiot politicians are on our payroll and we should stand up and speak out more.
Yeah good luck with that Chris…
A very accurate appraisal of what besmirches Labour.
But can you really see it changing? Ever?
Me neither…
It changed in Britain…..its possible here
Yes, but they have Jeremy Corbyn. NZ Labour has no one with the balls to actually do what he has done. MJ Savage must be spinning in his grave.
And judging by how Jeremy Corban is performing, he has less than a snow balls chance in hell of winning the next British election, if he lasts that long.
His authority as leader is already being effectively undermined by the centre/centre right of the party. Last week he gave in to the centre right over a vote on Conservative economic policy, after threatening to sack members of his shadow cabinet. Most of them were happy to defy him.
I do not believe that a JC equivalent would work for the NZ Labour party.
As in the UK, it’ll make the left of the NZ Labour party and activists feel good, for awhile. Then it will turn to custard, just as it is already in the UK
u got some links 4 that one there ocon..?
This was reported in the UK Press last week – The Guardian, The Telegraph and the Times.
Not to mention the fact that any left leaning leader is immediately assassinated by the disgusting MSM.
Many good people in the party are doing our best to change it. Maybe some more should join us!
Political change is often generational as old crooks and fools die off. Not many young hard righties in Labour – they cannot get elected.
I’m pretty sure if you burn down your side of the house. And it spreads to the other side. You’ll be arrested for arson. 🙂
Only a mass influx of people determined to make policy – not tea – can save the Labour Party from the self-perpetuating parliamentary oligarchy that currently controls it.
If you are calling for such a influx (as Martyn recently did) then perhaps you might first consider that it takes two to tango or, if you prefer, neither the chicken nor the egg came first.
For people to sign up to the party a cahampion, they need a Corbyn, in place or in waiting. Andrew Little isn’t a Corbyn, and Shearer sure as hell isn’t either.
Find one or Let the party die.
Yeah we know already…not that the other camp is any rosier – our selection of parties and leaders leaves alot to be desired.
In the last five years only Hone has shined in my eyes.
He spoke for the people of New Zealand with a true passion – that’s why he had to go!
I don’t know Hone spoke for but it certainly wasn’t “the people of New Zealand”. He did not, for example, speak for me. Nor for 99% of other New Zealanders. At best, he spoke for around 1% of New Zealanders – an ironic number given the extreme left’s recent slogan.
Now, Matthew, you know that’s not quite the whole story. Hone lost his seat after National and NZ First endorsed Labour’s Kelvin Davis. There were probably other reasons, but that certainly counts as a major factor.
On the point that Hone “did not, for example, speak for” you – he wasn’t meant to. That would be like me complaining that David Seymour did not “speak for me”. Of course not, Seymour speaks for supporters of free market ideology.
I would suggest that many of the things Hone espouses (social welfare, free education, state housing for the poorest, no state asset sales, etc) are in fact supported by a great number of New Zealanders. For example, 66% (approx) did not support partial privatisation of the powercos and Air New Zealand. In that respect, Hone spoke for those 66%.
Some times I think we forget in these debates that the government and its cronies basturdise children. If being against this regime is extrem an left slogan, then you are a moron fala hooton.
I’m not sure that Seymour really cares about free market ideology – it doesn’t win votes. He supports special interests like bar owners wanting to cash in on the world cup however.
ACT should be all over National with big boots for borrowing $100 billion with no means to repay – but Seymour hasn’t so much as squeaked about. Not a righty then, just a puppet.
Indeed, Stuart. ACT should be looking at National’s borrowing/tax cuts/spending.
Just as the so-called Taxpayer’s Union should be. (Except that the Taxpayers Union is a front for the National Party – https://fmacskasy.wordpress.com/2014/04/25/know-your-tory-fellow-travellers-and-ideologues-john-bishop-taxpayers-union-and-the-nz-herald/ and https://thedailyblog.co.nz/2014/03/19/when-will-taxpayers-union-criticise-judith-collins-the-way-they-did-mojo-mathers/)
The purpose of ACT is to gerrymander MMP and gift the transNational party an extra seat by claiming an electorate seat over and above transNational’s party vote. This, the transNational Epsom voters well know.
The Nat/ACT/Maori/UF bloc total party vote was 49.27%.
The number of seats that bloc has in parliament is 64 – out of 121 or 52.89%.
50.73% of NZers didn’t vote for the current power bloc and yet they hold a 64 to 57 seat advantage.
Remember how that anomaly of a ruling bloc with a minority of votes was supposed to be fixed by MMP?
What authority do you have Hooten?
What nerve to speak for the majority of the NZ people when you are about as out of touch with us all as your lying elitist donkey leader.
Hone is more in touch with the pulse of the NZ people than you will be in your next lifetime. Take a break and seek other employment for all our sakes. You are out of your league and you think way to highly of yourself. Your hypocrisy and bias shows all the time.
Hear hear Kim Dandy …. I see Hone Harawira as our Corbyn/Sanders, the champion of the ordinary Kiwi.
In Parliament as Mana Movement leader, he always acted in a dignified statesman like manner, never indulging in the nasty, petulant behaviour, commonly seen regularly in certain other politicians. In this regard Hone was a credit to his electorate and supporters and I considered he always represented his constituents well.
An egalitarian future for NZ lies in the hands of TTT, which has to realise the importance of getting Hone Harawira (along with his team), back in Parliament.
Dead right….but its all been said before in a thousand ways by a thousand people.
Pretty much a summing up of the current status of the Labour party.
Pretty good analysis really. However, it is not going to change things in the near future I suspect.
I remember how angry I felt in the late 1980s when Roger Douglas was given a free hand to destroy New Zealand society as we knew it and only a few brave individuals like Jim Anderton had the guts to stand up against it.
I told myself that I would never trust Labour again. Although this feeling did diminish over the years now around 30 years later this feeling is starting to resurface again. Not because of what Labour has done, but this time because of what they won’t do.
As a party they won’t admit their mistakes, and the fourth Labour government was a horrible mistake.
Chris you are right about the majority of the Labour front bench, they are proud of what they achieved in the 1980s, and that makes me sick.
Not all the Labour MPs are like that, but the ones that aren’t are being gagged and kept on a leash so as not to damage the party’s electoral chances.
To hell with their electoral chances if they have no integrity.
^ THIS.
Problem with that is, perpetual govt by the fascist Key Regime.
Nope. Key and National will be gone in 2017 as people are waking up to the fact that they destroy society. IMO, Labour would capture a greater percentage of voting if they actually started showing principles and standing up for NZ rather than continuing to kowtow to business and corporations.
The critical thing is to propose a decisive looking leader.
They don’t need to make good decisions, just look decisive.
laff-out-loud moment there @ the idea/thought of shearer being given another ‘go’…
yeah..that’ll work..
I rather think a mass exodus and call for an entirely new Party would attract more vital interest and membership.
‘Let the dead bury the dead’ and I might add, ‘let the dog return to its vomit.’
The faux Dionysian fête of free market anarchy for a few with bondage and surveillance for everyone else was never anything else but Zionist duplicity.
The wasteland is everywhere. What has anyone got to loose?
I agree splitting is Labour’s only hope. Otherwise splitting the vote in the election so that the Nats get in again, and Labour get even less votes than this time.
I had hoped they would grow a brain and listen to the people. But no NatLite yet again on TPP.
Listening is beyond them. They only listen to their own self interest and friendly chats with the Nats and follow the blind free market idealism, not understanding the world is changing and they must change with that world.
Clinging onto the status quo, and their dwindling voters means that Labour as a party is going to lose more market share.
At least if they were split the left and right Labour voters could vote for them, rather than nobody voting of them.
Where do they get this funny idea that Labour rescued NZ from Muldoonism? Clearly it was the Act Party Young Guns who hijacked an effete Labour Party because National was too entrenched for them to have any say. As soon as they had done the dirty deed they revealed their true colours: deepest, darkest, blue.
Funnily enough it was probably Bob Jones who “rescued” the country from Muldoonism. His New Zealand Party (under FPP) effectively wasted 10% of the votes in 1984 and gave Labour a huge advantage.
Obviously he had a good idea what Douglas had planned and walked out on the NZ Party as soon as he could. Job Done.
I think if you asked him he would probably agree that he had in fact, rescued the country.
The 1984 Labour Government was ACT in drag. The Labour Government got suckered by Roger Douglas and Co and have never fully recovered.
Labour really need to get their act together for the sake of all New Zealanders, we want to hear what the party can do for the betterment of the country. Constantly criticising National does not do Labour any good, New Zealanders want to know what Labour can do for them and the country, at the moment they appear to be clueless.
God Help another 4-5 years of Key and his crony capitalism?
@Jack I too hoped Labour could get their act together for the good of the country. But I just don’t think that is possible because they had a sure fire way to win next election by saying NO to TPP and collaborating, but have capitulated on that.
With their behaviour to Hone last election (which has really forced a voice for change FROM government), the lack of attack on dirty politics, the capitulation on 24 hrs surveillance and the capitulation on TPP is the last straw.
Bizarrely they had a win with Northland by collaborating, and losing a safe seat to the Nats but Labour does not seem to be able to make a decision on TPP to support their partners in a centre left coalition.
Personally I want old Labour back – and I am talking the Savage years. But that is clearly not going to happen because with so many neoliberals in Labour who have no other vision than to follow the rest of the world into protectionist agreements that they do not understand and nor want to get to the bottom of. This agreement is a way to keep the last 20 years ticking along further, more inequality, more pollution, more climate change, more dumb meetings about ‘doing something’, more stupid people making decisions like invading Iraq and silencing their critics and the public, less democracy, more privatisation, more corporate welfare. More arms for police, more discrimination, lower wages and being told to take it, as it is better than nothing.
If Labour split then at least there is still a chance for a centre left coalition.
I am not sure how many people will vote for them next election in their current form. At some point Labour should have picked up why they are losing so many votes, but they do not like the answer and do not want to change. And the people who are doing this within Labour are at the top and influencing.
The scary thing, is that I don’t think what I think is very far left. I think I would be this ‘central’ voter, but the so called central parties are so far away from the centre that you need some way to rebalance the mix.
My biggest beef with Labour is their foreign policy which seems to be to follow as ‘part of the club’ into wars, agreement and so forth that they do not understand, do not benefit them in any way and actually blind agreement is bad even for the countries involved in them. The idea that they consider giving up our sovereignty in favour of such a magic bean agreement is ludicrous and their blind faith in these agreements as a way to keep NZ safe is disturbing. The phrase ‘stand on your own two feet’ does not seem to be the Labour way anymore. Goodbye Lange legacy and say hello to a government and opposition of scared sheep.
War is about defending a way of life. NZ is a social democracy and signing an agreement that essentially gives up our rights to our way of life buried in small print that nobody is allowed to see. How can that be democracy? And if Labour can’t see or communicate that then that is their problem and if they are not credible as an opposition then they are not credible as a government.
Representative Democracy was designed specifically to keep the power out of the hands of the people and in the hands of the rich.
“In their eyes Labour is still the party that rescued New Zealand from Muldoonism, and dragged its sclerotic economy kicking and screaming into the era of free markets and free trade.”
OK. Let’s charitably suppose they thought that doing this would, after a period of adjustment, “raise all boats.” After all, that’s what they said, to justify changes that they had never campaigned on. But by 2008 raising all boats was off the agenda and the imperative instead became severely reduced resources and chronic material insecurity for about a third of the population.
During Clark’s tenure, it was possible to imagine social justice being wrought from the market economy, incrementally, cautiously, but wrought nonetheless. This is where we come to shock number two. After 2008, instead of standing up to a market that had openly abandoned any such ambitions, the right wing of Labour decided that anyone who would pose the mildest challenge to the status quo had to be curbed. And as you point out, they are still at it, a bit further below the radar now after six years of dissent. Like JK, I will be furious if they get their own way yet again.
Olwyn, you’re suffering from a bit of ‘revisionist history’. Please allow me to recap what ACTUALLY happened rather than what some would have you believe. I have spoken to both people sitting around the cabinet table at the time and those in Treasury. They concur:
The reforms came about because that Labour government had no choice in the matter. Muldoon had just about bankrupted New Zealand. There was barely enough money in the kitty to provide salary cheques for government workers. The currency was facing collapse and Treasury predictions were of 42% inflation within 6 months unless drastic action was taken.
In effect they slaughtered a cow to feed the children: It’s sometimes what you’ve got to do to survive. It wasn’t a time for theory or ideology. NZ was on the brink.
So in this regard the Lange team deserve our deepest gratitude because NZ dodged an ENORMOUS bullet.
The bit that many NZers who were brought up in the 50’s and 60’s couldn’t understand was that the status quo wouldn’t cut it anymore. The British had voted to join the EU in ’74 (?) and from that point on we couldn’t live off the back of a sheep with a guaranteed market and guaranteed high prices.
Belts had to be tightened.
We were cast out into the wilderness and had to fend for ourselves rather than just be a colony of Mother England. We had to learn to be a trading nation: efficient in production and fast on our feet.
To be sure, some people capitalized on our weakness at the time and bought assets on the cheap. That happens when you’re a naive player in the Big World. But that small slip doesn’t not detract from the fact that Rogernomics saved us from economic oblivion.
To this end the TPPA is just another step along that road. New Zealand Inc growing up and becoming a player. Some may not approve of all of its provisions but I’ll tell you what: NOT being in the TPPA would hurt a whole lot more! We have the GDP and population of Greater Manchester. We cannot afford to isolate ourselves.
OK Andrew. I accept that Lange’s government made the changes that they did under pressure. I focused on their sales pitch for the sake of brevity. I also accept that Britain’s joining the common market robbed NZ of a privileged position. However, you have side stepped my main point.
A Labour Party’s mission is to defend the interests of Labour. That is to say, those who must sell their Labour to live rather than collect dividends from investments, etc. One might think that these interests can be defended within the free market context, and Helen Clark’s government sought to do that. However, if the free market rules out the defence of these people’s interests, then Labour must take a stand. An honest stand would be one that either challenges the markets on its constituent’s behalf, or announces that it has given itself a new brief and that its old constituents are now without a political defender. A dishonest stand is one that tries to retain the support of its constituents while believing that to represent them would be too costly. My suggestion is that the right of the Labour Party leans toward the latter.
Thanks Olwyn
I’m not sure about “honest” or “dishonest” when it comes to public policy. With very few exceptions I find those in office from both end of the political spectrum generally have the best of intentions but see the social issues from different angles – all of which are over simplifications of a highly complex and variable issue.
There is no dark malevolent plotting going on. These people are mostly just stumbling forward like the rest of us, trying to add some value where they can. Sure there is competition within politics – that’s to the benefit of the citizen – but because we live in a civilized society once the red light on the TV camera is turned off, they’re mostly prepared to go for a drink and a chat afterwards.
I don’t like ideology. Anybody’s ideology. Based on the concept of ‘contingency theory’, every decision a policy maker is faced with is unique in some way. Ideologues are people who just have one tool in their toolbox. If they’re Left it’s nationalize if it’s right it’s privatise but in the real world each decision needs to be weighed on its individual merits – the answer to all decisions is “It depends on the details of THIS instance”.
This is one reason why the current government is so successful. (The other is that their opposition is clueless)Despite the shrill claims of the foaming-at-the-mouth ideologues on boards like this, this government is not right wing and is not plotting against the poor. It’s actually fairly pragmatic and middle-of-the-road. In some instances it is prepared to adopt left of centre policy and the next day use something from further to the right. Examples would be retention of ‘working for families’ for the left and ‘three strikes’ from the right.
Where I think the Far Left has gone wrong is confusing the objectives with the methods. The far left is too wedded to their original well-meaning but ineffectual toolkit from the previous century and have forgotten what their original objectives were: Uplifting of the poor.(hint – not propping up failing unions…)
Andrew your history is only partially correct. One of the main reasons our economy was in dire straits was increasing import cost as the price of oil skyrocketed in the early 1970s and late 1970s/early ’80s.
Remember carless days?
Remember the switch to LPG/CNG?
Remember the Motunui synthetic petrol plant?
Our economy was being dragged down by increasing energy costs – something New Zealand had never had to cope with before.
Then National Prime Minister, Robert Muldoon’s, mismanagement was only one part of the equation. (Though National’s mis-management over the last seven years is hardly much better as they’ve borrowed $60-plus BILLION since 2008. Muldoon would be chuckling from the Afterlife.)
Prior to the first Oil Shock (October 1973) our country actually recorded several trade surpluses. We exported more than we imported.
Sorry Frank – Muldoon’s rigid socialist approach to economic management was the main reason Roger Douglas et al had to act in the way that they did.
You might recall that Muldoon was micro managing the economy, down to even the extent to which wages and interest rates could rise.
The oil shock you mention was by comparison just a short term side show.
Like it or not, had Lange’s government not acted the way it did to address fundamental structural problems in the NZ economy,, the country would have been destitute – think Greece.
Nothing to apologise for, Ocon. As I pointed out;
There were other reasons, such as the UK joining the EEC.
But the oil shocks (both in 1973 and 1979) were most certainly not “a short term side show”. They were a considerable impact on our economy at the time, with the latter sending housing prices sky-rocketing at the time, and inflation exploding out of control.
To minimise those two events ignores events in the 1970s which had flow-on effects to the ’80s and beyond.
Someone once said that in the Muldoon era what wasn’t prohibited was mandatory.
🙂
I think you’re both right.
When the oil shock came it hit all nations but thanks to years of mismanagement, NZ was particularly vulnerable.
Based on actual policy Muldoon was WAY Left: State ownership of everything that moved and a command economy. Isolationist/Socialist to be exact.
Frank, regarding the budget deficit National has been running, what would you prefer?
Debt or Austerity?
You can’t have it both ways!
Faced with the GFC in 2008 they chose to take a fairly Keynesian approach to the economy, thereby keeping more people in work and maintaining the GDP. The cost has been increased government debt. This is what a socialist government would have done. This is another example of the current government’s pragmatic, ideology-free approach to running the country.
False dichotomy.
We could have prosperity without debt but that would stop the greedy schmucks getting income from doing nothing as interest would disappear.
Of course they had a choice in the matter. They chose the wrong.
You can’t actually bankrupt a country as it can create its own money.
But that is precisely what they acted on – ideology and hypothesis (it really doesn’t get to the level of theory).
No they don’t because we didn’t actually dodge the bullet and we swallowed poison as well.
True but that doesn’t make the 4th Labour governments response correct.
No they didn’t. While I was studying economics at uni one of the economic history lessons we had was that of the French and the British after WWI. The British faithfully tried to go back on the Gold Standard resulting in massive deprivation. The French, on the other hand, didn’t resulting in them having a boom with all of them becoming better off.
The 4th Labour government essentially tried to put us back on the Gold Standard that had been proven not to work in 1929. We needed a different response.
No we didn’t. The problem, as you pointed out, was that we were already a trading nation. What we needed to do was to diversify our economy and making trade minimal.
As foreigners buy up more and more of our land and assets we’re being shifted more and more into serfdom and slavery and I’m pretty sure that there’s no economic oblivion below that.
Actually, we can as we have the physical resources to provide everything that we need.
No Andrew. It merely postponed that “bullet”.
We may’ve bought our way out of that crisis by selling state assets, farms etc, but it only put of the day of reckoning.
As more and more productive assets are sold into foreign ownership, more profits are repatriated overseas to foreign investors/shareholders. That puts out balance of payments further into red.
Selling our productive sector is a short term gain only. We lose the income, and after a while, foregone income exceeds gains made by the original sale.
Simple arithmetic. You can’t dodge the math.
Our economy is screwed because treasury bonds are at a hundred year high. The yields are rising and the cost of insuring NZ debt is rising and the kiwi dollar is slipping. If you look at the forex and bonds market, there is a sense that these markets are now saying “hey, this governments fiscal stance doesn’t have credibility.”
The consequence is the cost of funding government goes up and the interest on government debt will go up substantially. There for mortgages will go up.
Every single currency in the world is losing to gold and silver. Gold is now becoming the de facto world reserve currency that’s why countries are asking the FED for there gold back. Even Texas is demanding there northern cousins give their gold back. Also France. Because they each do not trust each other.
The bond market is very problematic, that’s why they want there gold back.
Iv been saying for years to buy a bit of gold because the governments policies for the last 30 years are complete lunacy. Because there is to much whistling to the cities and to much large esk to the banks. The real economy has been squeezed out and now the day of reckoning is upon us.
Gold isn’t a viable currency as the amount available can’t expand at the rate that the economy is and thus forcing deflation. And that’s just the obvious bit.
Of course, with floating exchange rates there’s no such thing as a ‘Reserve Currency’ but the majority of people haven’t realised that yet.
Huh? Have you checked commodities prices lately? Deflation is winning. Deflation is destroying all the carefully laid out planes and related market manipulation for the past 6 years.
Australian mining is in for a bumpy ride. If they survive this turn in energy consumption.
Whether the Reserve Bank can keep up its carefully propped up bonds through the next cycle remains to be seen. They are trying hard, using every tool at there disposal to keep the status quo going as long as possible.
Whether it be Canadian, Chinese or Australian oligarchs blowing billions at a time on kiwi dollars. Prices are being propped up, jammed and extended higher and higher without regard to risk or repercussions.
It makes me wonder: Why haven’t humans ever thought to print their way to prosperity before?
Well, that’s a problem.
And it has always ended up disastrously bad. History shows that the closest thing that economics has to an unavoidable law is: There ain’t no such thing as half way crocks, I mean a free lunch.
Sadly, all of our decision-makers are trying their hardest to ignore the truth.
What’s that got to do with anything?
Correct, the status quo doesn’t work. Never has done in 5000 years of recorded history.
We started that idea 5000 year ago and it’s continued today by the private banks. But it’s not really the printing of money that’s the problem – it’s the rich who end up with all of the money due to the charging of interest, ownership of shares and the fact that they’re the ones printing money and controlling where it goes and who it benefits.
Our problem is capitalism that sacrifices the many to enrich a few.
QE is causing deflation in the real economy
Is it QE that’s doing that or the fact that all the money is going to the rich, the banks and into financial speculation and thus not to the people who actually spend, i.e, everyone else?
QE induced mergers and acquisitions.
No, capitalism induced mergers and acquisitions. This is inevitable as capitalism is all about moving to private monopoly ownership and control.
Exactly as it was under feudalism.
It is true that selling assets offshore can have that effect, but it depends on details of tax regulation. A counter example is that we now have Aussie banks paying tax here because our government dug their heels in. So it depends.
Rogernomics did far more than buy us time: It set us on the path toward a far more efficient, modern economy.
The long term goal is to create an economy where innovation and job creation are encouraged and a century of evidence shows that this just does not happen much in a command/socialist economy.
Thats the rub. Extending copy right to such an extent will seriously stifle enovation. Third party manufactures will come into trouble when copy write holders want to contract out services for penuats instead of employ entrepreneurs. Making it harder for businesses to change production line techniques or even develop there own products.
We are giving up a lot
To Finnish. We are losing a lot to corporations that like agreesive mergers and acquisitions
No it doesn’t. The country that sells it’s assets is always poorer than they were before both in terms of asset ownership and the loss of income. Tax is, after all, a percentage of the income from those assets.
No it didn’t. As history has shown it’s done the exact opposite and put on path to having an economy dominated by rentiers – the biggest bludgers in the world.
Doesn’t happen in the economy that we have now that’s for sure and we certainly have a command economy now as the capitalists command what happens in our country against the will of the people.
Your observations would be correct if interest rates are above 5%
Forget my last comment.
This-
David Graebers excellent book, 5000 years of Debt, says the first iteration of money was credit (double entry book keeping) that’s capitalist style money.
In the modern era the idea of credit and money was combined with interest which gives some one a rate of return for lending money. To extend the increasingly volatile business cycle as supply and demand kicks in and so called “classical economics” are applied – the cost of that money goes up and down accordingly. But we live in an era where the cost of money no matter what the economic climate is, continually goes down to zero. and further into negative territory in the case of Switzerland.
We have a complete invalidation of the business cycle which is capital destruction. Citi group basically confirms this when they say there has been plenty of credit but not much growth.
That’s the feed back loop tying central banks to treasuries around the world who think GDP decline requires more credit to reverse. But again. The decision makers are confused because credit growth is not the problem, it’s GDP growth.
And it didn’t work then either hence why all major religions ban the use of interest (usury).
Very few people lend out money. Banks certainly don’t as they create money every time they extend a loan.
There’s more than one problem.
1. Credit growth is a problem as there’s too much money in the system and too much debt
2. QE is being given to the banks who refuse to lend it out meaning that businesses don’t get the funds that they need
3. Perpetual growth on a finite planet is impossible
4. Capital accumulation always results in the few owning everything and thus a declining rate of motion in the economy
There is a problem when people hear terms used differently, it confuses people so for now instead of saying money I’ll say credit. Moving along.
Yes the barter system could never have allowed as to create and advance to the modern era.
Agree that housing as an investment class isn’t liquid, it’s not a cash equivalent the way government believes it is.
I agree there is “more than one problem.”
We are talking about bad market behaviour since 2008 which I am guessing isn’t new news to you. Since then we have now negative percent interest rates. The NERP is real, Switzerland and Sweden have NERP. A rediculous policy because I would get payed to lend money/credit. The consequence of depositors losing 1% of there credit every week and losing 97% of its value to gold.
All governments know the U.S. dollar is the next to go. Because – you can not be the world reserve currency when you are also the most indebted country in the world, and haven’t had a trade or budget surplus since the 60’s. There fore the U.S. Dollar will come down dramatically over the next 12 months.
I say that because many people including myself say what’s backing up the U.S. dollar is the Pentagon, but we seem to have hit peak Pentagon. What is happening now in Syria is extremely interesting in geo political terms. Gold is reflecting credit printing and what I believe is going to happen to credit.
New Zealand also has its own problems. Headlines are becoming increasingly surreal, reflecting an underlying social disorder that is ready to pop. There is civil disobedience because every one likes a free lunch payed for by the government. As far as I can tell neither side of the house has any plan that will solve New Zealand’s problems. This is why I believe printing credit can not stop (I spook in a another post how rising property prices is also a type of money printing, maybe you have seen it?) will lead to hyperinflation over the next 12 months. QE 1 through 4 has totally failed, yet we are posed for another round of FED spigot to feed all the drinks at the bar. *frustrating*
Governments around the world don’t have any solutions to our problems. There fore it will be difficult to avoid total collapse.
National and labour are walking us hand in hand towards total collapse. Philosophies may be right, except for one floor. Evolution can’t talk legs on fish, our system will eat Big Macs while drinking whisky and driving BMW’s into extinction.
For now I think the most important thing we can do here now is agree on what we call credit and other such terms.
@Andrew I have severe doubts about this view – although to be fair they’re all with the benefit of hindsight – but:
1) We now know that crisis capatalism was a strategy waiting to be implemented at this point.
2) We only have Treasury’s word for it that inflation was going to hit 42% and given economist’s inability to see the 2008 GFC coming I’m not sure how reliable their forecasts really are.
3) If you read Jane Kelsey’s book on this period you’ll see just how rabidly determined the people in Treasury were to overhaul the economy, so I really, really have trouble believing their forecasts.
4) Roger Douglas let slip before the election that he was planning to devalue the dollar thereby ensuring that a lot of money left the country and created a short term crisis that shouldn’t have existed.
5) It is the sovereign right of every nation to create it’s own money – debt free or otherwise – so the idea that a government hasn’t got enough money is complete nonsense, although I doubt any of the people involved were aware of this.
What we live in has nothing to do with capitalism. Instead of fair trade and equal distributions of resources.
We have neoliberalism. Where every price can be manipulated with zero risk to monopoly rights holders.
The rate business being created is less than the amount destroyed on the NZX through mergers or bankruptcy.
Aaron, point by point:
1) I don’t even know what this point means.
2) It was a Treasury estimate only. Whether it was 40% or 50% is immaterial: The economy was in the poo and the incoming Labour government was between a rock and a hard place.
3) I have a life so I wouldn’t ever read Jane Kelsey’s book. She’s just a die-hard old commie. The world has left her behind.
4) There is a relationship between printing money, devaluation and inflation. One minute you’re suggesting a Weimar Republic route to solving your financial problems and next you’re accusing Roger Douglas of planning to devalue the currency.
5) See item 4.
What you’re looking for is features like the following:
– Is children in CYFs care better off? If no, this is bad for the GDP.
– Have you seen protestors more than once a year outside parliament? If yes, this is bad for the GDP.
– have you heard about departmentalisation? If not, this is bad for the GDP.
– does the Budget have adequate revenue ? If not, this is bad for the GDP.
– is there enough admin staff and intermediaries managing the Budget? If yes, this is good for the GDP.
The thing is… GDP figures will change as market conditions change and adapt as ministers come and go etc., so consider an order of magnitude around the value usually given.
I have a life so I wouldn’t ever read Jane Kelsey’s book. She’s just a die-hard old commie. The world has left her behind.
You’ve just spoiled everything you have been saying. I was actually reading your comments up until that point. Typical right wing bullshit. Just because you don’t like what she is saying – SHE’S A COMMIE.
Using that line of argument anyone who disagrees with her must be a FASCIST.
I haven’t read the book either but then I’m an economic illiterate and don’t pretend to be otherwise.
Caught with your pants down mate?
I have a life so I wouldn’t ever read Jane Kelsey’s book. She’s just a die-hard old commie. The world has left her behind.
You’ve just spoiled everything you have been saying. I was actually reading your comments up until that point. Just because you don’t like what she is saying – SHE’S A COMMIE. Using that line of argument anyone who disagrees with her must be a FASCIST.
I haven’t read the book either but then I’m an economic illiterate and don’t pretend to be otherwise.
I think you have given yourself away.
Meanwhile, National gets left completely untouched with the usual pandering soft sell of do no wrong. Wish such efforts being put into trashing the Labour Party at every opportunity was put into the National government, after all, the National Party is the current government that is selling us out, and that is doing large scale, long term damage.
With the signing of the TTPA and similar agreements being ushered in across Europe the potential for political change via democracy will be minimal in the future. The most extreme example of this is Greece – who’s elected leaders talked the talk but were unable to walk the walk. In the end they capitulated and signed up for the bitter economic medicine their creditors wanted – and in complete opposition to principles they were voted in on.
While it’s easy to blame politicians I believe electorates hold the main responsibility. Time and again – across Western democracies – voters will choose political parties who’s principles are directly aligned against their own interests.
We’ve seen it in Canada, Australia and the UK – all have elected right wing governments whose overall agenda is to shrink government and liberate the business sector. Voters buy into this because they get lower taxes and are somehow convinced that they will share in the success of a profitable private sector.
Watching a tearful UK voter on Question Time complain that the government had betrayed it’s promise not to punish the working poor I felt no sympathy – instead I felt anger at the individuals complete ignorance of economic and political history.
The 2008 GFC has provided governments with a golden opportunity to implement the destruction of public services through spending deductions and neglect.
The solution to the public service ‘crisis’ will, of course, be the private sector – finally it will be enabled to extract a profit margin to the billions of tax payers money spent on profit free public services.
Voters will lap it up – looking to their expensive private health insurance policies as some sort of savior from the failing public health system.
Think I’m wrong – wait till to the next general election in NZ – the party that offers tax cuts will win hands down. No question.
So sad, but I fear you are right.
The only way we’re going to see a change in guard is if another massive debt fuelled bubble bursts and the resulting carnage, degenerate panic and financial distress forces voters to vote for a big change.
They’ll either go way far right (fascism) or left.
Chris, let me explain how this game works:
a) There aren’t enough hard left voters to elect Labour. Maybe 5% of the population, and many of those would vote Green.
b) To get elected Labour has to appeal to the centre
c) The hard left have nowhere else to go. Labour owns your vote anyway so why should they even bother to try and appeal to you? You and your friends just have to suck it up and go along for the ride.
d) Meanwhile, keep quiet because you’re just an embarrassment to those running the show.
Andrew, your analysis of politics is shallow.
At the last election, 25.13% of voters (604,534) voted for Labour – not 5%, as you claimed. You are embarrassing yourself. (Keep going.)
Ummm…. I think he mentioned hard left not left. Unless you are trying to claim that the 25% plus of the electorate that voted Labour is all hard left? Are you trying to claim that?
Read it again Frank
I said ‘hard left’.
Most people who vote Labour aren’t hard left – they’re merely wrong.
Ahem. @Andrew. That’s coming from the calling $30USD per barrel of oil good for extraction 😀
Seems like Bernie Sanders will win in the states and that is mostly because he has not been bought out and controlled by the elite mega-corporations like Hillary. Ever think that the Labour party here in NZ is also dictated to and partially owned by some of the mega-corporations like both parties in the states? The lobbyists in the states dictate to the two main parties for the most part and democracy is damaged if existent at all.
It is my opinion that the Labour party here in NZ is dictated to from powers above them in the corporate world and that our government is already mostly owned / dictated to and directed by these pro NWO ideas and plans (tppa etc. ) So both of the two major parties here and in the states may be cut from very similar cloths and it then is no surprise that Labour is so powerless and ineffective now.
They do not have a stand out leader like Bernie Sanders who stands up for the people and the environment instead of being led by the nose by these greedy profit bound idiot millionaires connected to these huge corporations whose motto has always been :
=====:>>>>> P R O F I T B E F O R E P E O P L E ! ! !
This is a very interesting taupatupatu. I joined Labour in the 1960s quite by accident. My neighbour dragged me along to a local branch meeting and I was elected the secretary even before I had officially paid my membership. Them were the days. I went to my first Labour Conference in Wellington with a burning desire to contribute to Maori Policy via the Maori Policy Committee. Instead, for 3 days and late nights there was a huge wrangle over who was to be the new Chairman while the current one was in apartheid South Africa on behalf of the NZ Rugby Union trying to pave the way for a peaceful rugby tour!!! Them were the days. Finally in the early hours we finally wrote our policy report, went to the conference, got onto the gestetners and churned out 100s of copies for the delegates just in time for the Chairman to walk through the door from South Africa and present it! While we were churning out our report I cracked a joke which was: ” No doubt about us Maori. We are only good with our hands.” A huge hand landed on my shoulder and said: “That’s not true mate.” Big Norm (Kirk) was in the room. I think one problem is that the fun has been taken out of the Labour Party. I was a supporter until Rogernomics which took away full employment and those industries and jobs where Maori predominated. As a left winger (which wasn’t my rugby position) I supported Jim Anderton and the Alliance. I would love to see a Kiwi Corbyn as the Labour Leader but I can’t see one under MMP. Instead I am a member of the Maori Party with high hopes that Maori are not only good with their hands.
1) They are unable to stick to one leader and give him/her a chance to shape the party, and they engage in factional fighting within the party after every loss rather than looking into why they didn’t win votes.
2) The establishment within the party view new voices, particularly progressive or democratic socialist voices as a threat, and would destroy Labour or sabotage their own election campaign to make a point.
Trying to copy National and appearing divided and at war within their own party aren’t vote winners, and don’t give people a choice.
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