Inflation Cost of Living Crisis: Political Winners, Losers & Predictions

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As TDB has been pointing out from the beginning, the 3 Tsunami waves of Covid are:

1 – The immediate cost in human life and sickness from the virus.

2 – The economic carnage from the virus.

3 – The psychological impact of a unique universal event and the isolation and alienation and mental stress that has created.

We have passed the first peak with global deaths and sickness, we have just started the second wave of economic carnage and the psychological impact of all of this is barely beginning to be recognised. 

To date Grant Robertson and Labour have told everyone listening that the inflation spike is but a blip and life will return to normal in the 3rd or 4th quarter of this year.

Really?

Inflation is but a spike and the economy will get back up on its feet with hyper tourism, exploitation of migrant labour and more international student language school scams.

TDB Recommends NewzEngine.com

That’s what will save us hu?

Y-e-a-h.

Bout that.

Look at China right now...

Nearly 400 million people across 45 cities in China are now under full or partial lockdown as part of China’s strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world’s second-largest economy

…add the Ukrainian war and the instability to wheat and base line manufacturing in metals prices alongside the impact on developing economies

Smaller countries are also struggling. Many borrowed heavily over the past decade to deal with the effects of the 2008 financial crisis and the pandemic. Now, interest rates are starting to rise, just as the prices of essentials like food and fuel leap.

…and you have geopolitical shockwave after geopolitical shockwave hitting us and snapping neoliberal free market global supply chains.

Don’t believe me? Well ask the World Bank and IMF then...

The World Bank has slashed its forecast for global growth in 2022 to 3.2% from 4.1%, anticipating a sharp deceleration from estimated growth of 5.5% in 2021. The IMF’s latest outlook arrives later Tuesday.

World Bank President David Malpass told journalists that “severe overlapping crises” are weighing on the recovery.

“There’s Covid-19, inflation and Russia’s invasion of Ukraine,” he said on Monday.
Developing countries, many of which are facing high levels of debt and a plunge in the value of their currencies, as well as soaring food prices, are of particular concern, he added.

Breaking it down: Around the world, engines of growth are sputtering as prices rise and the war in Ukraine wreaks havoc on strained supply chains.

…the ramifications of this can’t be underestimated…

Europe, which relies heavily on Russia to meet its energy needs, is especially exposed. There, much could depend on Russian President Vladimir Putin’s next move. If supplies of Russian natural gas to Germany were suddenly cut off, Europe’s biggest economy would lose a shocking $238 billion in economic output over the next two years, the country’s forecasters have said.

…these pressures are impacting America as well…

In the United States, inflation has hit a level not seen in four decades. That’s forced the Federal Reserve to consider an aggressive pullback of its pandemic-era support for the economy, boosting fears that it could hike interest rates so much that it causes a recession.

…all of this is screaming inflation and economic stagnation and recession, so Grant’s optimism that Treasury are right and that inflation is just a temporary spike that will be fixed by hyper tourism, migrant worker exploitation and international student language school scams seems less glass half full and more shards of glass half in your mouth.

I don’t think we are ready for this jelly.

There are of course winners and losers.

 

WINNERS:

Luxon: Has led the Cost of living Crisis well enough, if he can manage to stop shooting himself in the foot could build National vote.

ACT: Will manage to spark the anger and resentment coming.

David Parker: Talking about taxing the rich when people will feel their poorest, will win populist resentment.

 

LOSERS:

Mortgagees: Will become the sacrificial lamb to the market as OCR keeps going up.

Renters: Will be screwed by Landlords as they try to stop the mortgagee sale from the rising OCR.

Beneficiaries: Will get screwed over regardless.

Working Poor: Inflation will push them deeper and deeper into debt.

Small Business: As the downturn cripples consumer spending, any business that has survived to date will be on life support.

Treasury: Their advice that inflation is transitory seems so far from reality they may as well have a base on the moon. Will be damned when the Black Swans land.

Adrian Orr: Damned if he does, damned if he doesn’t.

 

PREDICTIONS:

Unemployment Insurance: This is an outrageous sop to the PSA and allows for white collar members to enjoy a 6 month taxpayer funded holiday between stints at MSD and Treasury. There is no way the Government can justify pouring billions into holidays for Wellington bureaucrats. This is gone.

Public Transport: The Cabinet have realised that money they pour into the bureaucracy goes no where and rather than raising benefits that then get clawed back by MSD, fully subsidising public transport puts money directly into people’s pockets. Expect more of this.

10% Inflation by December: It’s going to get worse.

Political radicalisation: The economic stress of what is happening will push people right off the edge of their rabbit holes.

Crime wave: The economic stress will trigger the gang violence and ongoing crime waves.

 

CONCLUSION: 

The Governments decision to pump billions into the banks to fund property speculation has seen the wealthiest amongst us $1Trillion richer…

Wealthy nearly $1 trillion richer since Covid began – Hickey

An economic and political commentator says since the Covid-19 pandemic reached Aotearoa, the rich have become richer and the poor have become poorer – in part due to the Government’s policies.

…if we can look after the rich, we have an obligation to the poor.

This is why the Government must seize the possibility of fully funding universal services as a means to counter the cost of living crisis.

Free public transport, free lunch and breakfasts at school and breaking the Supermarket duopoly by setting up a new 30% player will do more to lower the cost of living than any tax cut.

Labour must have courage and vision to make fundamental bold policy changes that directly impact the pockets of renters and first time home buyers alike.

If they don’t they will get blamed come December and that will set like concrete for the election in 2023.

 

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28 COMMENTS

    • This is a thread about the looming Labour induced skyrocketing inflation (you don’t print 80billion bucks with out inflation!)
      And you post a USA link…..ohhh look a squirrel!
      C’mon Bert, tell us all how this is Sir John Keys fault…c’mon….and how it’s nothing to do with St Jacinda, we all know you want to!!

      • Wow still trolling , you don’t like context then back to the Whailoil site.
        Go on tell us inflation in the USA is Jacindas fault, go on, we know you want too.
        I pity you.

        • Berts like one of those Russian TV propagandarists who will say absolutely anything to protect their dear leader.

          • No he’s not one of those!!!!! Don’t be so mean y’all!!!! He’s only doing his job, what with being employed by Labour’s social media dept (of 3750 employees) to fend off the nasty righties. Even when all his fellow lefties, and I include TDB here, rightfully shout down a bad Labour idea or clearly terrible performance, he won’t join in – he’ll deflect it right on queue by digging up some old forgotten John Key fact. YAWN!!! John Who? It’s 2022 and Jacinda is in charge – the buck stops with her. What will he do when she’s gone? I know, he’ll switch sides and deflect any Luxon criticism by digging up some old Jacinda fact hahahaha. Can’t wait.

            • YAWN!
              We can only hope they never lift the restraining order on you and Jacinda will be safe.
              We can have a story on Luxon’ head and it will be Jacindas fault eh cabbage ?

          • AND ex is

            just another brain dead trumpanista parroting half understood fox news talking points whilst drunk on gasoline and coke RTDs

            jeez this groundless personal insult stuff is fun huh ex?

      • is giving shed loads of cash to business/ landlords inflationary too tighty whity?

        no, cause those billions go into overseas investment funds. and are completely lost to to NZ business and the economy….HUZZAH

  1. LOL. The biggest loser is the government and poor man’s Gordon Brown. His legacy will be shit canned if there is a sustained recession because in the traditional of Little Aotearoa the peasants need someone to blame.

    Covid is dead. Long live cost of living as the new crisis. One not even our Glorious Leader and her followers in the feckless can spin despite Dr Wiles spending 8 hours a day on the net in her quest to become a financial expert along with her expertise in covid.

  2. “Free public transport, free lunch and breakfasts…”

    I always love the word “free” is thrown around here like it is actually free. You do realise, I’m assuming, that the inflation chaos right now is because we paid people to do nothing for months, right? Last time I checked, buses, trains and food all cost money so where do you propose it comes from?

  3. One thing is for sure, the rich pricks will get through this with their fortunes intact, while the rest of us will have austerity and wage cuts forced on us.

    • There’s a difference between the black market and the free market, if you can call it free. Rich people can only do what the regulatory landscape allows. Of course of the business party of New Zealand actually regulated the markets it would no longer be free to (in there words) “reduce taxes.”

    • Yes and Luxon wants to cut spending of the allotted budget spend whilst still recommending tax cuts that will deliver us $2 extra a week whilst giving himself and the well off an extra $346 a week. Nicola Willis you should be ashamed, the new Ruth Richardson of the National party.

  4. Hold on a minute! Crisis? How many have we now?

    Poverty!

    Housing, Homeless and that motel bill. $365m annually!

    Health-Covid and workers shortages.

    Education. It’s been shite for the last 30 years and has got much worse in the last 15. The yoofs are more dumma than the previous generations.

    Terrorism. More people have been killed on LINO’s watch.

    Inflation. It’s not temporary or trans-national. It was created by MMT, money printed and pumped into wealth creation for house buyers and speculators.
    Then the war started creating an energy crisis, added to the covid supply issues and international inflation increased prices of consumer goods.

    Poor Governance, LINO.

    LINO’s 26pt lead has turned into a 2pt-4pt deficit.

    After the pending budget, later on, this month I’m sure there will be a few more Crises created to add to the list.

    • Oh, dear! Someone has brought her holiday slumber brain home with her?

      Thomas Coughlan, May 1, 2022

      Q: Would you resign rather than put in a wealth tax:
      A: It’s not in play so there is no need for the hypothetical. It won’t happen.
      Q: That is something that has been put in place before over raising the super age so would you resign before you put in a wealth tax
      A: I won’t allow it to happen as Prime Minister

      So is she going to stand aside for Robo or Anaru to take the top job?

  5. Martyn you’re wrong about Luxon being a winner. Jacinda already has the upper had again after today. In fact Luxon kinda lost the tax cut argument the day he came out with. Why? He got the brackets and numbers wrong and now it sounds like it’s a policy for the rich. You see, 150K..180K is now perceived as rich, that’s how low the bar has gone. Luxon butchered a good idea right tyere. So when Jacinda says the tax system is unfair in parts she is right. It is. It’s unfair on her own people…the first 20..25K should be tax free. Over 250K should be 45%. In the middle is where the cuts should matter the most but they don’t yet. I think Luxon is counting on all the tradesmen, self employed, small businesses and all people with investments who are seeing their lifestyles and retirement investments attacked by Labour policy. He would have done his numbers and come to 50% of voters falling into that category. Hope it works.

  6. “3 – The psychological impact of a unique universal event and the isolation and alienation and mental stress that has created.”
    You’ve just described a young man living on a high country sheep station while knowing there are parties going down in the city with pretty girls, drugs and booze. Don’t ask me to explain how I know that because I might get triggered.
    There’s nothing about recent events that compares with the slow-burn brain death of many years of boring blokie slang-yak in the Pisser surrounded by massive posters of half naked men clawing at each other on a muddy paddock while using a pointy ball as an excuse for the most homoerotic displays ever seen since Roman times or the sound of wind in the tussocks or the ‘she’ll be righting’ can compare in terms of praying for death as all hope seeps out into the bone dry, shit spattered dirt of the wool shed sheep yards when you know, that’s the best socialising one can hope for this coming Saturday night.
    If I was the kid I was then today? I’d a been leaping into the ute drenched in Old Spice to do a non stop burn out to the nearest pub to get laid and fuck the diseases!
    There’s only one thing worse than a life threatening virus and that is turning into a compliant little minion to a rotten system known for giving less fucks than a 85 year old golfer with a side line interest in bingo.
    I’m desperately worried that the logical fallacy virus will force us to conform to inside out scrutiny by a bias to the core and corrupt fascist state having been hijacked by money fetishists who also insist we step aside and let the virus in on tourists, and who of them welcoming tourists will care who the virus they will certainly carry kills, or how many? A double dastardly deed indeed.
    Our entire politic is fucked. Our systems favour the plutocrats who’ve redesigned the systems to best suit them. We don’t matter. We haven’t mattered for decades. But we must work harder! We must expect less! We must die to make the money. Work! Work! Work! Money! Money! Money! Die! Die! Die!
    Banks out! Lets try something new like crypto.
    Mandate voting. Don’t vote? Fuck off then and leave all your rights and privileges at the front desk when you leave.
    Royal commission of inquiry into our politics and economy please? You naughty, naughty little old boys. With your sticky little fingers fingering away in our agrarian exports earned money. Syphoned off into all sorts of moist little places for you to get naked and dirty with later. Cook Islands, Panama… All you fancy little soft pink fingered men with your flashy, plasti facades in Remuera, Sydney, NYC. Aye boys? Seedy, diseased tourists coming in to hide your treachery.

  7. as far as food goes is it inflation or gouging

    food is an inelastic demand..ie you’re not likely to eat more next week than this and I would guess most peoples weekly shop is the same as last weeks..
    so at least for home produced food there is no reason other than more expensive ‘inputs’ fertiliser etc, now foreign goods may become restricted by supply chain issues but if they are resolved once again who uses more olive oil this week than last..plus the same constraints on imports constrain exports so that should mean more home products in the shops…

    as I say food demand can go down but the chances of anyone drastically increasing personal consumption have to be pretty low…do we really have a supply side issue in NZ as far as food goes?

  8. Should Jacinda now go into the loser column? Consider this from a Herald writer regarding Jacinda’s ‘not in my lifetime as PM’ pledges:
    <> Will it cost her the election?… Or is ‘brilliant leadership’ as Bert (formerly JacindaFan) would call it? Labour fans, brilliant minds, enlighten us.

  9. Who ever thought that the property bubble wouldn’t come to an end needed to have their heads tested. You can blame the banks for this heavy mortgage lending but you can also blame the estate agents for pushing up prices for the gullible. Remember the heady days of 18/20% interest rates. This left wing blog is becoming more right wing by the day is nothing sacred .

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