Adults In The Room?


WHAT’S GOING ON, JACINDA? Why has the former Labour Finance Minister, Sir Michael Cullen, and Helen Clark’s former Press Secretary, Mike Munro, been invited on to your team of negotiators with NZ First? And, while we’re on the subject of Labour’s Rogernomics Generation, why was Annette King sent to ride shotgun alongside you for the duration of the election campaign?

These are important questions, because when Jacinda talked about ushering in “generational change”, most New Zealanders fondly assumed that she was committed to taking their country forward – not back.

The other assumption New Zealand made, as the baton of leadership passed from Andrew to Jacinda, was that she was completely up to the job of carrying it without assistance. We made precisely the same assumption about her senior team’s readiness to govern the country without “adult supervision”.

The September newsletter from “Positive Money” (a group dedicated to creating “a money and banking system that serves a fair, democratic, and sustainable economy”) may, however, give many Labour supporters cause to wonder whether any of those assumptions were justified.

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In the newsletter, two of Positive Money’s stalwarts, Don Richards and Sue Hamill, describe a “surprising and somewhat disappointing” exchange of views with Sir Michael Cullen at an election meeting in Whakatane on Friday, 15 September:

“Sir Michael, the former Labour Finance Minister during the Helen Clark-led government was with Grant Robertson, the Labour Party’s current Finance spokesperson and Kiri Allan, our local Labour Party candidate.

I asked Grant Robertson if he was aware of what was happening in Japan with the Central Bank buying up a significant portion of their national debt. Inflation in Japan was close to zero and the real economy was thriving. Had he considered instructing the Reserve Bank to do the same, thereby saving taxpayers money for social and infrastructure projects?

Grant asked Sir Michael to answer the question and he said that Japan had been experiencing negative growth for some time and so the two economies were not similar. I reminded Sir Michael that the Japanese economy was now thriving and the Central Bank was still buying up their national debt. I was told that a Labour government would not be doing that.

Sue then asked Grant Robertson if he had thought about doing what the first Labour Government did in the 1930s, using the Reserve Bank’s balance sheet to fund the building of housing and infrastructure? The question received a few claps from the audience.

Sir Michael once again fielded the question. He said that we had to be fiscally responsible otherwise we could end up with an economy like Germany after World War One, Venezuela or Zimbabwe. Sue carried on with a second question stating that as private banks create most of the money in the economy, why not let the Reserve Bank do it as well. Sir Michael responded by saying the banks do not create money.

The meeting finished with an invitation to meet at a local café for a chat. We went home and printed off the Bank of England’s article and the IMF’s discussion paper that stated categorically that banks create money in the act of lending. Sue went back to the café and had a further conversation with Sir Michael. He dismissed the Bank of England paper as not relevant and that it did not mean that banks created money. He also dismissed the IMF paper saying that banks lend out people’s savings.

It was a frustrating experience and if Sir Michael has the ear of Grant Robertson, as he appears to have, then no difference will be made to the way our money is created, should the Labour Party come to power.”

When Richard’s and Sue’s report of this encounter was drawn to my attention, I responded with the following comment:

“That is the most alarming piece of intelligence I have received in the entire course of the 2017 election campaign. It is hard to distinguish which is the most dispiriting aspect of [the] report: that Grant Robertson cannot answer basic questions on political economy without reference to his mentor, Sir Michael Cullen; or, that Sir Michael’s grasp of these issues is as woeful as Don Brash’s (who also refuses to accept that banks create money). If this truly is the level of understanding in Labour’s senior ranks, then we are all – to use a technical political science term – fucked.”


  1. Creepers!

    You might just a have a jolly point point there , Mr Trotter! , – how else and why else does a bank exist if not to make money through interest and investing cash ?!!?

    Everybody understands that !

    Even mathematically challenged moi !

  2. First time he’d ever had shoes on, very first day at school

    And the sweet young teacher, straight from college, her first day there too

    His Mum and Miss Brown chatted about living out there in the scrub

    And how he’d grown up with the shearers and how he’d done it pretty rough

    But he could cull and crutch and dip and dag though he was only six
    “But I think it’s best to warn you, she said, he swears a little bit”

    The Kid (He Swears a Little Bit) – YouTube

  3. Thanks Chris. You have clarified what I not only suspected but was also certain I knew to be the truth of Labour’s pathetic neo liberalism. Winnie should sit on the cross benches.So he can veto the budget. Robertson shouldn’t be anywhere near Finance. He’s incompetent. Cost Labour 2% of the vote with his fuck up of the tax issue during the campaign. He has to go!

    • Kiwis love to spend, and flash the payment and credit card around, that is nothing new, but one major problem the country ends up in a mess, again and again. Nations where people are saving and smart at doing things, they seem to be doing a lot better than NZ Boom and Bust.

      • What can I say Iv got a big mouth making it hard to conceal my criminal ways. But that dosnt make the statues que any more or less honorary.

        Money doesn’t care who you are. White, brown, what ever. If you’re right it will reward. If wrong, homelessness is possible. Trade concessions with other nations is possible. Police brutality is possible. Otherwise known as a rock star economy. And all the sex drugs and rock & roll that goes along with artificial highs.

      • well so did the Americans and look what happened in 2008 the question for NZ is when will the piper want payed i hope new zealanders have been wise payed off as much of there mortgages as possible while the interest rates were low its a lot easier.

      • Most of the money being splashed around seems to be in housing, the urban myth suggests 40 % of mortgages are interest only,if so any shift in interest rates or drop in market values will satisfy the long wailing supposed gloom merchant warnings.
        One has to ask why is Kiwi saver not compulsory as is the case in Aussie. National has been totally irresponsible with regards to supporting and promoting the importance of personal financial management. Tends to mirror their own fiscal methodology.

  4. Ah Ha ! See ! I told you so! ( The collective ‘you’. Not you specifically @ Chris Trotter. ) Didn’t I? Yes, I fucking did!

    Jacindamania is turning into a Jacindaberg and is on a collision course with the old dung barge that is Nu Zillind still crewed by Zombie, neo liberals.

    cullen. A quintessential neo liberal, or, if you prefer. A crook. Fucking annette king. That old bag set the cops on me after her office ‘reconstructed’ an email I sent her making an observation ( Neo liberalism was killing the poor. ) with a question ( Did she believe that neo liberalism was a production line for societal dysfunction.) into a complaint about a lack of policing in the New Brighton precinct. ( I wrote about teenage hookers queuing for methadone while their toddlers played in a piss stained, rubbish strewn ally. ) No one should ever trust king with a coal shovel full of horse shit much less her opinions on politics.

    That would be why she ( adern ) sabotaged Labours potential rural support. Brain farting a threat of new taxes which sent, not only farmers themselves into panic mode, but the towns and cities that rely on their primary industry for their income too. While I’m no micky cullen with a big brain for cyphering an’ that, I can see the perils in that from one whole fucking country mile away. Some here whine about filthy farmers being somehow an umbilical extension of the Natzo’s when really? If they took the time to drag themselves away from their lattes and go into dead zones where their breakfasts come from they’d find people in daily fear of losing not only their now bankster designed and chemical drenched food factories but their homes too.

    And lets not forget aderns working relationship with tony blair.
    ( It pains me to say these things because I know how close @ Bomber is to Jacinda. )

    Indonesians have a saying: “ Same-same but different. “

    We should all be freaking out about now.

    • A Countryboy shouldn’t be mixing his countries!
      Thais have been saying “Same same, but different” since I first visited over 30 years ago and the Viets picked it up when they realised communism was a dead duck and started to seriously court the tourist dollar.
      Have never heard it after years in Indonesia. The Indos haven’t developed their thinking that far yet so it’s still plain “Sama, sama.”

    • Hey CB,

      We dealt with Michael Cullen when we asked him over two years 2006-07 to buy the rail back.

      Every three months I would arrange for the committee of our Napier Transport Group to turn up at his house in Napier and talk with him.

      He was astoundingly hood to us all and invited us inside his home every time.

      He spoke so softly and respectfully so we never had any problem with him so your experience I was so sorry you had a bad deal with labour over the farm but he was so good here.

      Now we just need to dump National and get labour to restore our broken rail that national caused.

  5. Labour’s “adults in the room” would also have had something to say about the young Jacinda Ardern’s rash statement about climate change,

    “This is my generation’s nuclear-free moment, and I am determined that we will tackle it head on.” Jacinda Ardern.

    Tackling climate change “head on” would mean withdrawing Labour’s support for, and putting an end to, deep sea oil and gas exploration in our waters.

    Deep sea oil drilling is one of the unconventional fossil fuel technologies, (alongside fracking and Tar Sands, and Arctic Drilling).

    When already, existing conventional accessed fossil fuel reserves contain enough carbon, that if released will seriously degrade the bio-sphere.

    Added to conventional sourced fossil fuels, oil and gas from unconventional sources like deep sea oil drilling will be, as James Hansen described, “game over” for the climate.

    Labour’s “adults in the room” have another view.

    Labour’s finance spokesman, David Parker, says his party’s policies on oil, gas and mineral extraction are close to those of the Government.

    “I don’t think we are much different from National,” Parker said. “They’ve continued on with the programme that we started in respect to oil and gas,” he said yesterday after a breakfast for the Mood of the Boardroom survey in which chief executives expressed strong support for mining.

    “We think that mining outside the Schedule 4 areas is appropriate.

    “There need to be appropriate environmental controls around risk minimisation.”

    The survey showed 74.3 per cent of chief executives supported stepping up mining on the conservation estate, 75 per cent supported the development of iron sands resources and 71.4 per cent backed the development of rare earths.

    Parker was Energy Minister during the last Labour Government and said about $20 million was spent on seismic surveys to supply to big oil companies and entice them to New Zealand.

    “Our position is that mining and extractive industries are important and have their place.”

    Greenpeace climate campaigner, Kate Simcock, says Ardern doesn’t seem to have an understanding about the drivers of climate change.

    “If climate change is our nuclear free moment, then oil, coal and gas are the nuclear bombs. Today Jacinda had an opportunity to walk the talk, but she failed,” she says.

    “The science is clear – we can’t afford to burn the majority of the world’s known fossil fuel reserves if we want to avoid climate catastrophe, let alone search for more. All new deep sea oil reserves need to stay in the ground if we want to keep warming below two degrees. Ending new deep sea oil drilling in New Zealand is the most basic first step you can take when it comes to climate action.”

    • Whilst I agree with the sentiment about the environmental impact of fossil fuel based economy , the assertions you and many of others of the “anti-oil’ activists make re Deep water drilling are trite and very short on fact & substance..
      Yes , the Global economy needs to reduce consumption of fossil fuels .
      Of priority is a substantial , even radical reduction in consumption for private vehicles as is the radical reduction reduction in consumption for air travel.

      Green/carbon taxes are the most direct and effective ways to address this , but god save anybody or any political party that moves to restrict ‘individual freedom ‘ by implementing such measures.

      The productive economy is going to depend on liquid fuels for at least the next 30 or 40 years and the speed at which alternative motive power for the trade in goods will again depend on considered progressive implementation of carbon/green taxes and R&D grants to develop and test new technologies.
      All of this is seriously impeded by neo-liberal/freemarket philosophy and it’s bag full of red herrings.
      As of now deep water drilling/exploration is on the verge of collapse as a result of geo-political machinations by the saudi’s and others and the totally unexpected revolution in tapping unconventional shale oil & gas.

      The environmental and social impacts of headline grabbing incidents in both fracking and deep water are a consequence of laissez faire operations and poor or non-existent oversight by regulatory bodies. Government agencies underfunded and short on technical expertise.

      How do I know this?
      I spent 30 plus years in oil & gas drilling and I’ve seen wide open open ,cowboy ventures and dealt with highly regulated and well inspected operation and it pisses me off when it gets slagged as dirty and environmentally damaging.
      There’s more harm done , day on day by open cast mining and industrial fishing than oil and gas drilling and production.

      • “I spent 30 plus years in oil & gas drilling and I’ve seen wide open open ,cowboy ventures and dealt with highly regulated and well inspected operation and it pisses me off when it gets slagged as dirty and environmentally damaging.

        There’s more harm done , day on day by open cast mining and industrial fishing than oil and gas drilling and production.”



        As the saying goes;

        It is hard to get someone to understand something, if their lively hood depends on them, not understanding it.

        • My Livelyhood no longer depends on Drilling.

          The real classic ,is folks with no practical experience making assumptions about processes and outcomes .

          Kate Simcock
          99% of the ‘management’ I made look good in my 40 years of working life.

  6. ““That is the most alarming piece of intelligence I have received in the entire course of the 2017 election campaign. “

    It truly is, but not so surprising.
    Michael Cullen has no interest in the facts, he has no need to have.
    Grant Robertson will obviously take advice from Cullen because he dare not challenge the group think. And he probably isn’t even aware of this.
    God stiffen the bloody crows, we are, “to use a technical political science term – fucked.”

  7. It cannot be that Cullen and especially Brash do not understand bank lending’s overwhelming contribution to the money supply.
    But under the recent but now abandoned deposit reserve ratio system , the commercial banks individually were restricted to lending only a large but variable portion of their customer’s deposits , and required to hold a portion ; like 5 to 10%. Not even lend it all out. The critical thing to understand is the nature of those deposits, because they are made up out of loans previously made to someone else. You take out a loan to build a house, you pay the builder the plumber the electrician etc. and they in turn take each a part of your loan and “deposit” it in their bank. Their bank recognises it as a new deposit. They don’t care that it originated from your loan, even if it’s the same bank. Its new deposits a proportion of which can be lent out to new customers. So what a single bank manager does not see himself as doing, the banking system as a whole does do in it’s interplay with customers.
    Cullen and Brash both perfectly understand this , and to simply state that the banks do not create money but simply lend out deposits was ( I don’t know in NZ if it still is) technically correct from the perspective of one individual bank. But in respect of the banks as a whole it is a conscious and deliberate obfuscation , not ignorance.
    D J S

  8. Well if you’re all so bloody critical why not vote for National,or is it a case of being cynical of all things political. Looks a bit flakey to me.

    • You know guys. As far as negotiation tactics go creating familiar ground is a power full tool in Labours arsenal. Don’t recall Winston Oeters ever being pushed out of coalition by Helen Clarks Labour.

      Although Micheal Cullen as a Baord Member of The Ngai Tūhoe Baord does scare me. At least in 2 or 3 years all crown appointed Baord members will be replaced by an all Ngai Tūhoe selected Baord.

  9. Come on now, lets not get the knives out before Labour even forms a government and give Jacinda a chance to find her stride before she is hounded by all corners!

    • Totally agree,Labour hasn’t even gained the treasury benches and the left of centre supposed intellectuals and armchair critics starts picking away and cannibalizing it’s self,for no other reason than self amusement.
      Little wonder 46 % vote National ,while the chattering left of centre rubbish everyone.

  10. If the nuances of having Annette King ‘riding shotgun’ in the campaign can’t be seen and appreciated or is an issue then Arden should resign now and let the cynics have English, Joyce and Bennett.

    And anyone thinking that Ardern should be an expert on everything, run the show totally by herself and not take advice, probably goes to bed with a prayer that Muldoon will return.

  11. and Cullen was right (and is)….Japan is an exporting giant that has run constant trade surpluses and has monumental foreign reserves/savings to call on and manufactures highly desired products whereas NZ runs constant trade deficits and has an appalling savings history and relies on foreign investment and commodity exports able to be sourced from anywhere…..think of the exchange rate and imported inflation or imagine an economy without access to all those foreign sourced products/services before believing in emulating Venezuela (sans oil)

    • Yea me too! Labour is not really Chris’ purist idea of what Labour should be or once was, and contrary to popular belief, they did ekshully build Rome in a day, and any good that could possibly come out of a Labour/Green/NZ1 coalition – even before negotiations have started, aren’t worth shit ….. so yea, I’ll go Neshnool next time.
      Besides, that fucking Jacinta is all show no substance.
      No NO N O!!! Better the next 3 years of National, and then beyond – Labour as a backwater dying force.
      How’s that mid-life crisis going @Chris? Does the collective commentariat have a PERF plan?

  12. There you go folks, that has been one of my main concerns. Jacinda may have good talking skills, may come across well, but I have followed her body language during the campaign, she is not always well prepared when some questions are asked.

    She has entered Parliament nine years ago, has never been a Minister, has admittedly a fair bit of experience in the House now, and from elsewhere, but she looks a bit too unprepared for the top job, leading a government, even with two other parties, one led by a very astute, and experienced, smart fox, so she should perhaps wait until 2020, and run a successful campaign then, to become PM.

    With Winston in the mix, should a coalition or so now be possible, he will most likely be the one who has the ultimate say, and if he does not get his way, it will create tension between him and Jacinda and NZ First and Labour.

    I am not saying this will happen, but it could well happen. With the positive news today, that Labour and Greens get an extra seat and MP each in the next Parliament, this deserves some careful consideration.

    Do we, does Labour, want to risk getting into government now, and end up with a mess, with issues and disputes, and thus looking like a government in disorder, and lose the next election?

    May be I am too negative, and maybe it is possible to hammer out a good deal with Winston and the Greens also, and maybe Winston and Jacinda can work as a good team?

    The talk about the fiscal or money policy, as mentioned in Chris’ post above, does also reveal, the coming government, if led by Labour, will be more of the same, with some tweaks here and there, but no major shift and change, as many had hoped.

    We have reason to be careful, and doubtful, and the coming days may show, what we are likely to get, or what we can expect.

    At least Winston will put the breaks on mass immigration, that will be certain, hence his King or Queen Maker position is a blessing of sorts, even if we may not get a progressive government this year.

    In any case, an early election may also be on the cards, perhaps as soon as late next year.

    • Steven Joyce is invariably well prepared when questions are asked.

      Is being always well prepared when questions asked a construct of having all the information at hand, a construct of being capable, a requirement of modern media, a requirement of modern media consumers, nothing to do with capability but handling the media.

      Does Donald Trump look a bit unprepared for the job? Does he seem to to not always be well prepared when some questions are asked?

      Let’s face it, Ms Ardern is a novice. We need a smooth operator like Steven Joyce.

      • Trouble is, Mr Joyce is a bit like Herr Goebbels, always instantly updated, and informed of what spin to add to the report, so he spins the listeners and watchers into full spin fairy tale territory, while the MSM do not seem to notice.

        That is a skill, I admit, but for ‘smooth operator’, I rather have the apprentice with honest dedication and hard work attitude, to get the job done honestly and properly.

  13. The sad thing is a Labour led government would still be an improvement on the economic and environmental vandals currently incumbent in the Beehive.

    Even with Labour’s conservative caucus leadership, (who Chris Trotter has sarcastically labeled “the adults”, presumably because that’s how they see themselves), the same personalities once upon a time called the “ABCs”. Going back even further some of these “adults” i.e. King and Cullen and Parker have a history going all the way back to Roger Douglas’s neo-liberal revolution.

    These conservative “adults” have again played their role in delivering us up to another three years of National. Attracted by Winston Peters anti-government rhetoric, and disappointed by Labour, many older and Leftish, alienated and disgruntled, Labour supporters have given their vote to Winston Peter’s New Zealand First Party. And Winston Peters in an act of political Jiu Jitsu that would shame Machiavelli will turn this anti-government vote in to support for the government.

    • The lesser of two evils, once again, we have voted, we now have little more input, they will negotiate what they can, and will do as they see fit. The only alternative would be, once the first disappointment sets in, to hit the streets, but that is something that does not happen often in NZ Aotearoa, does it?

    • Sad Sad Sad

      It is a bit pathetic that Chris Trotter and his hangers on, slam and kick and whinge and grizzle like stuck pigs all because Jacinda is taking a conservative approach to spending.

      At the same time they belly ache over Michael Cullen who bought back debt; founded Kiwi Saver (brilliant); set Monies aside to meet Superannuation costs in the future.

      It was not Jacinda’s fault that National kept bringing in 100s of Thousands of immigrants year after year. But built no infra structure.

      It was not Jacinda’s fault that Billy the liar sold off hundreds of houses to friends. Dozens of schools to friends. And overloaded Hospitals.

      But oh no. Chris Trotter wants to sink his venom into Jacinda. Grant Robertson. Parker. Decent productive persons. Who will manage diligently.

      You no hopers Trotter, are sounding more and more like broken records from the 1st world war.

      Jacinda goes with the Positive.

      After allocating seeding monies, Housing Built by Labour will be defrayed by weekly rent, so that more housing can be built. Not so that National can syphon off the money and put into Chinese wallets or Saudi sheep herds or Auckland Casinos.

      Jacinda is offering a future to an impoverished middle class. Overburdened with Billy the Liar’s 18 taxes; Keys GST on everything (the Cockroach); costs of Education; Low wages; and greedy dutch farmers who pay themselves $800.32 Million a year.

      Pull your sox up Mr Trotter. Get with the real world. You’ll love it Chris.

        • for god sack Chris we cant wait for perfection the damage to our society that national has done is going to take a decade to repair
          please give all of us a brake we don’t need Borg perfection. Cullen gave us kiwi saver and a chance to buy the country back and with nzf greens and some labors ideas we have a chance with national there is no chance so please Chris let us start rebuilding what we have lost.
          if you need a reason here it is we don’t want to be Greece thats where the nats fire economy is taking us right into the hands of the IMF

        • Couldn’t agree with you more Observer T and Dave. National lost another 2 seats, I reckon the panic is really settling in now.

      • To be fair the only way to have a simple and corruption proof GST system is to have GST on everything.It makes compliance easier too and heaven knows, small businesses are inundated by compliance of every sort.
        Once you start making exceptions loopholes appear which eventually you can drive an ocean liner through.
        I don’t think those who advocate no GST on say, fresh vegetables, have actually thought it through. People on limited budgets don’t buy expensive organic vegs, for example, so this would benefit higher incomes. It would come as a surprise too how many items suddenly became fresh vegetables.
        This is supposed to be evened out by the benefit system which I am sure Jacinda will overhaul if she becomes PM.

  14. Chris Trotter, a political pundit in his own head, with an

    unrealistic grasp about the complexities of government.

  15. Well if a reputable outfit like Positive Money, whoever the hell they are, say so then it must be true!

  16. So here we all are then two weeks after an election and the
    political platform and ground Labour stood on is suddenly being shall we say
    ” recalibrated” on the face of it, as per the report on Robertson and Cullen’s repotrted utterances.

    So when you view it in the round the conclusion that presents is that for reasons are not made clear using the Reserve Bank to fund housing is not an option and
    following the path of the First Labour government will lead to ruin.

    For who? Not the cadre of Kiwis who are unable to pay rent or are living in a caravan on the sisters’s backyard at Manurewa or Shirley.

    If Ardern and Co are going to play it safe, simply fiddling around the edges or worse on the fundamental issue of housing, when they alone have the poltical capacity to be instrumental in redressing the housing problem then, Labour is finished as a poltical entity of the centre-left or left.

    Let us not overlook history, as 1960 and 1975 show the electorate will be merciless on Ms Ardern if she does not come through.
    And housing is the critical and visible issue of our times that now knows no political respite.

  17. I must ask, where has Chris Trotter been the last decades? Does he not remember Kiwi Saver, who brought it to us, and what it means, and where those funds get invested, by those fund managers, that savers choose to look after their nest eggs?

    Michael Cullen and Labour created Kiwi Saver, good for some, questioned by others, but it means, funds put into plans that are having money put into investment vehicles on stock exchanges and in bonds and the likes.

    So your dollares go there, they get put into investments, that are traded, speculated with also, and you rely on it, for your retirement, dear folks.

    Have you lost trust now, since Chris Trotter puts into question Michael Cullen and his whole approach, then you should NEVER have supported Kiwi Saver and for that sake Labour, as they were from 1999 to 2008!

  18. Methinks Chris Trotter is only playing devils advocate so we need to realize that 🙂

    ‘ But he could cull and crutch and dip and dag though he was only six’ …“But I think it’s best to warn you, she said, he swears a little bit”

    • I do realise that, but do we really need Chris to play such a role as there is plenty of MSM and right wing commentators doing the same, seems a pretty well overdone theme.

  19. As you pointed out Chris, you made assumptions and this article like all the others is exactly that, assumptions.

    • So what practical use is the assumption, other than an ilrelevant intellectual muse. What we don’t need is a reputed left leaning political commentator knitting gloom and doom.

  20. When and where did Jacinda ever say that she wouldn’t have assistance? Even key and English have assistance from their large team of expensive consultants. Annette King has decades of experience and Cullen and Winston Peters have great respect for eachother after working together in the previous Clark Labour govt which Winston thoroughly enjoyed. What does Bill do? disrespects Winston and disregards his advice with a negotiating team comprised of people like Joyce etc that Winston cannot stand. Why is there no focus on that?

  21. I’d have thought it obvious why Sir Michael Cullen and Annette King are there. Sir Michael has Winston’s respect and was part of the negotiating team in ’05. Annette King was Jacindas Parliamentary mentor and has the backing of Grey Power, another important component of forming an alliance with NZ First. In my opinion Grant Robertson is the issue, and I half expect Winston to demand that Robertson be replaced. To put it bluntly Grant is unambitious, bereft of ideas, clueless on policy and lost face during the election debates with Dildo Joyce. Possible replacements for finance could be Winston, Sir Cullen, or otherwise I suppose David Parker would be the likely candidate. Not exactly a generational change but a compromise that would allow Labour time to prepare for 2020 when a younger generation could enter the second term and take over the reins.

  22. Ok – first I think Jacinda is probably right to have Cullen and King in room as heavy hitters are needed and I think Cullen is smart with a good progressive heart.


    Cullen and Robertson are wrong about money creation by banks. The Bank of England says so. The Bundesbank says so. Lord Adair Turner – one of the head honchos of the Bank of England says so. Ex nihlio money creation (not reserve ratios via mythical multipliers, or banks intermediating deposits) is what private banks do and how they make a profit. Economist (well-respected) Richard Werner – a dry finance type – actually followed the accounting involved in creating a loan – it’s true and fully empirically documented- loans create deposits.

    Cullen and Robertson are in good company with their ignorance. Paul Krugman also had a massive debate with economist Steve Keen about this. In general the consensus is that Keen is right – banks don’t lend out savings, they create deposits when they lend. One person’s loan is not someone else’s savings. Loan desk workers in banks confirm they loan first and worry about reserves later. The money supply can expand far beyond any 10% ratio of reserves or paper currency. That’s largely how we have Auckland property prices (alongside cheap money from abroad).

    Who cares? Well it means money creation in our economies is left to the private banks and their incentive is to get us all into debt (which they have done very well in NZ). This is fine for a while but eventually it collapses and we get debt deleveraging and deflation/depression (GFC anyone?). Demand falls as we all to try save at once and the economy tanks. Booms and busts are caused by the de-stabilising money creating power of the finance sector.
    I suspect we are about to enter a phase of deleveraging and this is not going to help our economic situation. Consistent government surpluses equally suck demand and money out of the economy. Yes you can pay down debt with them (and keep money supply the same in the end) or invest in shares offshore in the hope they provide a good return (and don’t tank) – but better yet you could invest government money in the creation of a productive, highly skilled economy and make an economy that can pay for an aging population in 30 years’ time. Where my only child’s labour can produce enough for two aging parents.

    What Chris is getting at here is that NZ Labour’s leading lights (Cullen Robertson) do not seem to be aware of the challenges mounting to orthodox economic thought from Modern Monetary Theory and similar movements. For example in the US Stephanie Kelton – a leading MMTer is Bernie Sanders’s economic advisor. Steve Keen – a major economist writing about debt and the problems of private money creation was recently invited to talk to OECD – because guess what – the private debt system isn’t working and we are facing a world bereft of demand and deflation where just inflation targeting isn’t working. Bill Mitchell has been speaking at UK Labour party conference.

    It’s too hard to go further into detail as to why this is important here but I encourage people to read up on Bill Mitchell’s MMT, Steve Keen’s work based on the work of Minsky about the destabilising role of private debt and Positive Money’s work especially in the UK exploring this.

    There are viable alternatives to the orthodox “government deficits are bad we need to reduce debt therefore can’t spend and if we do it will create hyperinflation or the bond vigilantes will get us” narrative.

    The rest of the progressive world is actively engaging with these ideas. NZ is behind the times. That is what Chris is getting at. It’s not his job to up-talk a Labour government. It’s his job to objectively call it as he sees it.

  23. Chris;

    Certainly back to your best.

    “That is the most alarming piece of intelligence I have received in the entire course of the 2017 election campaign.’

    I so despair that this has gone straight over the heads of so many.

    Tribal allegiances are so blinding.

    The are all fucking Fabians, arn’t they Chris.

    Well done. Could see it a mile off. The ABC’s.

    Sorry I missed the debate.


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