What the collapse in business confidence really says about NZs entrepreneur class

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New survey: Business confidence falls to lowest since 2008
Business confidence continues to slide according to the latest ANZ Business Outlook Survey.

Business confidence, and firms’ views of their own activity, continued to fall in July, reaching the lowest levels since May 2008 and May 2009 respectively, ANZ chief economist Sharon Zollner said.

This was increasing the risk of the economy stalling, she said.

Business confidence dropped to a net 45 per cent of respondents reporting they expect general business conditions to deteriorate in the year ahead, down 5 points.

What the collapse in business confidence really says is the entire entrepreneur class of NZ relied on mass immigration, low wages and an underfunded social infrastructure – this is why neoliberal capitalism is a failure.

As Business tell us they have no confidence the NZ stock market hit 9000 at the beginning of the month…

…look at all that lack of confidence.

Who knew our mighty Titans of Commerce were the real snowflakes and all it took was fair wages, decent working conditions and a woman in charge to destroy their fortitude!

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I take it they would like to go back to the good old days of their high confidence – you know when we had record homelessness, sky rocketing suicide & dirty politics.

‪Could we please start a give a little page to raise funds to buy every one of them 3 years worth of viagra for this sudden loss of  rugged free market self-reliance?

Do they need a trigger free safe space with no references to universal suffrage and democratic majorities?

Shouldn’t we all be concerned that our mighty Entrepreneur class only have high confidence when they’re fucking over workers and people are living in cars?

Let’s put aside our incredulousness at the sudden lack of confidence by our mighty business leaders and look at the 3 real reasons why business confidence in NZ is plummeting.

1: Echo Chambers

Remember when right wing fixer Jordan Williams bet that he would walk down the main street of Wellington naked if Winston didn’t go with National? This false certainty was an example of how highly polarised NZ is now as a culture, with few broad platform media outlets able to give a wide enough perspective of what is really happening. We have mistaken a small population for a connected one.

The reason business are reeling was because they honestly believed their own echo chambers and didn’t think Labour, the Greens or NZ First could get to 51%. They have no real excuse for this level of ignorance because the moment the election result came in, it was always abundantly clear to anyone who had actually read NZ First’s policy platform that Winston was always going with Labour. Also, any basic understanding of the special votes always concluded Labour & the Greens were the ones who would pick up numbers.

So the first reason why business confidence has been shaken is because they were genuinely blindsided by the result, and a spooked business community loses confidence.

 

2: Wilful Spite

The second reason why NZ Business confidence is plummeting is pure ideological spite. There are rich elements within NZ who despise the Left with the kind of hatred of communism that McCarthy would feel embarrassed expressing in public. They are the same forces who triumphed over Helen Clark during the Winter of Discontent when the same elites forced Helen to dump closing the gaps policy.

Remember, there was no real reason at all to force Clark’s Labour Government to dump the closing the gaps policy, it was a pure domination move to let the Labour Government know the business elites, not Helen’s Government,  were the ones in charge.

Brutally strangling social justice policy aimed at lifting Māori out of the depths of poverty meant Labour wouldn’t dare tamper with the neoliberal settings of the economy.

Those same forces are at work in purposely spiking business confidence now. This is why Grant Robertson has been so fastidious in keeping the spending promises in place, despite the grotesque underfunding of the last 9 years under National. Any opportunity to attack will be seized upon by these elites and the new Government are doing everything in their power to limit those targets.

The truth is that this most malicious element within the business community won’t be sated by anything other than the total destruction of everything Jacinda represents.

The Government should quietly note those who are causing the most venom and with cold blooded precision, nail those captains of Industry with specific taxes or expensive regulation.   For these players of the game, there can only be a ruthless response, because you can’t negotiate with cancer.

 

3: Correct analysis of the looming meltdown

Of course the third reason why NZ Business confidence is tanking is because they are correctly reading the external economic signs of the impending reckoning.

Central banks around the world responded to the Global Financial Recession by printing billions and pumping them into stocks and bonds. This falsely created the lowest inflation rate in 5000 years. The entire last decade of growth has been built on hope wrapped in snot. When the collapse comes, it will have the force of a possible depression…

Comment: World at risk of a borrowing hangover
World debt ratios have spiralled to record levels during the era of super-easy money and markets are showing telltale signs of late-cycle excess, leaving the international financial system acutely vulnerable to a jump in borrowing costs.

Any reversal in our fortunes could be “quick and sharp”, says the Bank for International Settlements, the global watchdog based in Switzerland and the scourge of dissolute practice.

The warnings cascade from the BIS’s annual report released over the weekend, always a sobering read for investors and central bankers alike.

Europe’s ‘death wish’ has never been stronger
Emmanuel Macron’s “grand plan” to relaunch the euro on safer foundations lies in tatters after Europe’s northern bloc refused to contemplate any form of fiscal union, and exhausted leaders kicked the crucial issues into touch.

After battling deep into the night over migration there was no energy left at the Brussels summit for a fight over fiscal architecture.

The paralysis means that Europe is likely to stumble into the next global economic downturn disastrously ill-equipped. It will have no shared fiscal instruments of any scale to fight recession, leaving the weakest states vulnerable to collapse.

Could New Zealand’s economy survive a China crisis?
In July 2018 China’s economy falters sending shockwaves through the global banking sector. Commodity prices plunge and the world faces its first global financial crisis since the meltdown of 2008.

What happens next is pretty ugly for most New Zealanders – job losses, soaring mortgage rates, falling house prices and a sharp recession.

As a forecast it would be unnecessarily gloomy, although not implausible.

But the grim situation painted by NZ Treasury is not meant to be a prediction – it is a model designed to offer a stress test of our economy under extreme conditions.

A Chinese financial crisis is one of three “large but plausible shocks” modelled by Treasury in its 2018 Investment Statement, along with a major Wellington earthquake and an outbreak of foot and mouth disease.

…so those are the three forces feeding into our falling business confidence. Ignorance of the wider electorate, wilful idealogical spite and a sober reading of the economic indicators warning of a meltdown.

That’s a potent cocktail of grief right there and it will be up to the Government to provide the leadership our mighty captains of industry have walked away from.

As if Jacinda didn’t have enough on her plate.

28 COMMENTS

  1. Jacindas chance is to follow the Roosevelt directed the federal government during most of the Great Depression, implementing his New Deal domestic agenda in response to the worst economic crisis in U.S. history. As a dominant leader of his party, he built the New Deal Coalition,

    https://en.wikipedia.org/wiki/Franklin_D._Roosevelt

    FDR Roosevelt model of invest in jobs to restore our broken infrastructure of rail, roads ports and all underground draining systems as our country is now at after nine years of National ‘deferred maintainence.

    • How is that Gisborne railway Cleangreen, up and running yet, according to you it was promised in the election campaign…no money left I assume as free fees for 1st yr students and a billion a year for Shane’s splurges up near where he lives…disappointed yet? 🙂

      • Muppet! Listen carefully, the 1st year student payments were from the failed National party tax bribes. And now listen carefully again, National took us from 10 billion debt to 90 billion. Should Labour take us from 90 billion to 170 billion and therefore have copious amounts of money to splurge on the business round table? Do not talk to us about broken promises, otherwise you will come across as an outrageous hypocrite.

      • no money left I assume as free fees for 1st yr students and a billion a year for Shane’s splurges up near where he lives…disappointed yet?

        You’re quite correct, Imright. There’s not as much money in the tax-pot as there used to be.

        That’s because National squandered several billions in two unaffordaqble tax cuts in 2009 and 2010. What followed was under-funding of all government departments (except, curiously, the Prime Minister & Cabinet Dept, under John Key); cuts to NGOs; minimal pay increases for essential professionals (police, nurses, teachers, et al); and using some SOEs as cash-cows by issuing a decree (from Simon Power in 2010) to increase borrowings and remit that extra income back to National (which was partially to blame for the collapse of Solid Energy).

        That’s why everything seems so run-down… because it is.

    • +100 CLEANGREEN…well said….This coalition government needs to take BIG bold steps forward ( not pussy foot around…we dont want stale old prejudice and laws)

      They should listen to their Agricultural Minister Damion O’Connor on hemp…this would be a king hit with the farmers

      https://www.stuff.co.nz/business/farming/105355293/hemp-champions-move-industry-a-step-closer

      https://farmersweekly.co.nz/section/arable/view/advocates-keen-for-hemp-crops

      They need to listen to the Greens on cannabis legalisation…and do it before the referendum

      They need to listen to Winston Peters on medicinal cannabis..and do it sooner rather than later

      https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12098519

      https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12095931

  2. most of them are hardly entrepreneurs. mainly inheritors or have mortgaged their house to buy a proprietorship.

  3. When the economy is “Rockstar” and “business” is confident, real people are;

    Living in cars
    Living on the street
    Living in squalid overcrowded tin garages
    Nomadically moving from one place to another just to get shelter
    Less and less likely to ever do anything but rent someone else investment and pay well above top dollar for the pleasure.
    Begging
    Having their Globug rip off power cut off
    Trying but failing to survive off zero, 1, 2, 3 hour type contracts
    Being fired, well, because “business” just can
    Working in lethal conditions with no comeback on “business”
    Being paid sub minimum wage as “independent contractors”
    And the coup de etat………working on because the banning of tea breaks.

    If that’s confidence “business”, please, stick it far up your arse!

    Given their total hold your breath, 2 year old tantrums, reward their petulance with a 50% + top tax rate please!

    • Listen to right wing Business head Kim Campbell and he will tell you if National was in power there would be no recession. That alone tells me the corrupt nature of Nationals smear campaign.I now know what Bridges was doing on his NZ tour.

  4. Of course, it’s not much different with the farming community. Their confidence collapsed the moment National lost power

  5. Brilliant article, Martyn !

    So much pointed material it is hard to know just what to highlight. What grabbed me was the wimps ‘loss of business confidence’ , – and then that self mocking NZ stock market graph.

    It is very , very hard to feel pity for these weasels.

    Very hard.

    Perhaps a small selection will suffice ,…

    —————————–

    [ ”What the collapse in business confidence really says is the entire entrepreneur class of NZ relied on mass immigration, low wages and an underfunded social infrastructure – this is why neoliberal capitalism is a failure

    Who knew our mighty Titans of Commerce were the real snowflakes and all it took was fair wages, decent working conditions and a woman in charge to destroy their fortitude!

    I take it they would like to go back to the good old days of their high confidence – you know when we had record homelessness, sky rocketing suicide & dirty politics ” ]

    ——————————-

    And this :

    [ … ” it was always abundantly clear to anyone who had actually read NZ First’s policy platform that Winston was always going with Labour ”]

    It was the height of arrogance of the far right and their lackeys in the National party that they could expect Peters to come running to them after leaking his personal affairs to the public, of Key spending 9 years putting him down along with his media mates, – and although Peters has a tough hide, working alongside such a bunch of creeps would test anybody. That and the fact they honestly thought Peters constant denouncement of neo liberalism was all just hot air…

    They soon learnt the hard way , and since then we have been treated to them exposing themselves as the champions of autocratic rule and privilege. According to them , – democracy is good only when it works in their favour.

    And just how cancerous these people really are shows in their efforts to inhibit social democracy ,- as if they haven’t caused enough damage already over 34 years :

    —————————–

    [ ” The truth is that this most malicious element within the business community won’t be sated by anything other than the total destruction of everything Jacinda represents ” ]

    —————————–

    And I am in full agreement with this statement and have advocated for years :

    ——————————

    [ ” The Government should quietly note those who are causing the most venom and with cold blooded precision, nail those captains of Industry with specific taxes or expensive regulation. For these players of the game, there can only be a ruthless response, because you can’t negotiate with cancer ” ]

    —————————-

    Excellent article.

  6. damn straight “You cant Negotiate with Cancer” I agree totally, best to treat it with Pot oil lol

  7. Insightful column by Martyn

    “We have mistaken a small population for a connected one” heh, patently true observation

    the business parasites totally “don”t like it up ’em”…

  8. Confidence is a subjective emotion.

    Maybe it was a slow news day that a subjective emotional feeling is being given so much air time. But why are only the feelings of National Party voting business people being reported on? Why not the confidence of the whole nation? Why not other sectors of the population?

    Nobody ever measures the confidence levels of beneficiaries, the homeless, or the working poor. No statistician ever puts their feelings of confidence on a wall chart, or graphs them over time to see whether their feelings of confidence are going up or down. No frowning TV news reader reads out their falling levels of confidence in threatening tones….

    Here are a number of links to a self help messages that may be of some help for the poor wee dears of the business community who find themselves lacking in confidence:

    How to control your emotions and feel confident

    Science backed ways to build confidence

    Confidence: This article is about the emotion

  9. Free market economics for slavers and monopolies always turns out like this. Real free market capitalism is free from slavers and monopolies.

  10. Fair enough, but a lot of us know this stuff, so why isn’t any meaningful action being taken to rectify this state of affairs? I know, don’t tell me, most of us are all too well off, apathetic, gutless & safe & secure in our own individualistic bubbles with too much to loose.

    The problem with our innocent, adolescent island paradise is that we’ve never been overrun by marauding foreigners, bombed into submission or smashed ourselves to bits in a blood curdling civil or race war. If we’re to grow up & avoid such horrific scenarios its imperative that we regain control of our destiny & shape a truly independent, localised, long term survival vision.

    These are desperate times that require visionary leadersip, innovative solutions, steely solidarity & willful action. Unfortunately our ineffectual parliamentary democracy & liberal party political system is now unfit for the job at hand. The time for careerist tinkering, liberal & identity politic musings, obsessing over equality & rights for everything in sundry is over, as the survival & ultimate destiny of our species is at stake.

    Whats needed right now here in Godzone is a radical ‘ALTERNATIVE NZ MOVEMENT’, a supportive cadre & some well planned direct action aimed at bringing down the liberal globalisation dictatorship that is threatening the survival of nation & all humanity.

    • i agree esp with your first paragraph but having NZ take on the global elites would not happen because of this…..its gunna get rough before it gets better or sorted.

      • You’re probably right when you say “its gunna get rough before it gets better or sorted”. But keep in mind we’re a subservient link in the globalisation chain & if we had the guts to reject neo-liberalism, remove the liberal elite from power & go our own trail blazing, fortress NZ like way, we could break this enslaving chain & lead by example.
        Becoming the poster boy/girl for a sustainable, more localised post-globalisation world, I believe is our nations true destiny. I know, as John Lennon said, “I’m a dreamer, but I’m not the only one”.

  11. What we need is an investigation into the banking industry to see how many kiwis are being rob of their hard earn low income. National did not care and allow banks to do what they want so now is the time to investigate just like Australia did.

  12. Martyn you refer to “Grant Robertson has been so fastidious in keeping the spending promises in place” as if it were a positive that would stop an avalanche of criticism of the government from all the trolls & MSM. But the shit keeps pouring over the government and its own followers resent the non-delivery of election promises that Robertson can’t afford. He can’t spend the money because he is following a ridiculous neo-liberal policy on adhering to a ridiculous budget. So many TDB contributors point this out but you seem stuck on praising this idiotic practice.

    Seems pathetic to follow a policy aimed to appease the Opposition. Isn’t working!

  13. Good point. Hope this isn’t disturbing the stools of Labour politicians, otherwise we are lost, like ’00. A poll of who bosses vote for.

    You should have a MSM column Martyn, but that falls under the same shadow that has sent Chris Trotter to the furtherest south newspapers.

    National’s safe 40 % is at least not America’s majority. Indescribable how close we are to that vile country. How much force is needed! When our leaders are comfortable with their career progressions.

  14. In my experience having a baby daughter made me very confident , bold and radical and jet- propelled me into new initiatives…lets hope little Neve has the same effect on Jacinda

    What we need is a new bold government that listens to New Zealanders , sorts the chaff from the wheat, and is unafraid to cut new principled directions for New Zealanders and the New Zealand environment

    Go Jacinda and the new Left coalition government! Lets make this a great government for the history books!

    You have your chance NOW!

  15. Good stuff, Martyn.
    And Mr ‘Rockkstar Economist, ex Senior Banker, Cam Bagrie, now self titled as ‘Independent Economist’ said on RNZ, that he disregards business confidence surveys! Lol

  16. Who are these people? Which industries do they represent? Why do they matter?

    And which industries are actually confident under a centre-left government? Could we listen to them, too?

    If it’s the construction industry we can only hope their diminished confidence is matched by rising fears that their intolerable incompetence is coming to light in bad bold ways.

    Until they can demonstrate for years at a time they can actually ‘self-regulate’ under tight supervision, without dipping their snouts, and standing back when the small folk go to the scaffold, their opinions are worth less than plastic waste.

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