The post delta NZ economy meltdown, can Orr’s big bazooka stop supply side inflation & where NZ really fell over with Covid
As TDB has been warning from the beginning, the economic shockwave of Covid is here driven by supply side inflation caused by just in time global capitalism grinding to a halt.
The knock on effect of 5% inflation plus mortgage hikes caused by interest rates being forced up over the ocean of private debt is a fucking maelstrom of damage.
Small business owners who have been alphas all their life and have grown attached to the liberty that liquid gives them are about to go belly up and that bitter resentment will feed ACT.
The poor are suffering beyond the financial fears of the middle classes, food banks are spiking 500% more demand and their overcrowded existence is ripe kindling for covid.
So can Orr’s bazooka help the economy as the real pain starts?
If all Orr has is a sudden jump in the interest rate to try and slow the almost 5% inflation, the ramifications of the true gravity from all that private debt becomes realized.
The problem as I see it is the inflation is being caused by unique supply side constrictions, so the only tool left is the ‘bazooka’, which Adrian Orr used last time with a .75 cut. If he needs to get ahead of a sudden spike in the cost of basics because ports are jammed solid it would need to be one enormous hand break.
And if he has to pull that hand break, we best hope there are airbags for everyone.
The steep rise in repaying the ocean of debt will suck money directly out of the pockets of people, many of whom are on the tipping point between functioning and desperate.
This leads to a plunge in consumer confidence, enormous financial pressures and the economy built on hospitality, tourism & retail withers as wave after wave of sickness and death trips the country back into a steep recession and brutal self imposed lockdown.
Without some radical package to help everyone rebuild from this pandemic, the economic carnage will mutilate whatever survives.
All of this was predictable and my only criticism of the Government’s response was the lesson we didn’t learn from the 2019 measles epidemic and that was the failings of their community outreach.
Maori and Pacifica health providers can reach communities that cracker DHBs can’t. When they are directly funded, public health goals can be achieved, that it’s taken so long to get them resourced is the main mistake and problem we have right now.
Otherwise, I applaud this Government’s desire to put people before money but taking that road means we have an obligation to help those damaged economically.
It’s time to think about taxation aimed at the wealthy, the banks and speculators to fund the rebuilding we need.
A financial transaction tax is that solution and Labour must consider it in a post Delta economy where Billionaires are flying to space on self funded rockets.
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“….where Billionaires are flying to space on self funded rockets.” Should this have /sarc beside it?
The billionaire wankers do it on everyone else’s money that they have purloined by extortionate charges and tax havens.
When the patient is dying from loss of blood, the central bankers’ solution is to apply leeches.
You can print computer digits but you can’t print an energy supply. Nor can you print a livable environment.
The LINO government and central bank will do what governments and central banks they always do: make everything that matters worse. And this time they will collapse the economy as well.
I love a column like this because the Nashnull and ACT fans, and the ‘woe is us’ individualist libertarians have no answers. Their parties would hammer the working class and alienated working class harder than Labour!
People like Dave Brown and other commos and anti imperialists and eco socialists do have the answers. It is objectively past time to retire the parasitic Capitalist and Finance Capital system and confiscate all assets from the squillionaires.
Yes we are so lucky that we are allowing foreigners to plant pine trees on our productive land and destroying our competitive advantage, the left sure has all the answers.
It’s pure genius.
The big problem is that the market failed over a century ago and has been on life support ever since. Capitalism is now a giant ponzie scheme baled out by workers who make the wealth having their ‘share’ of the national income squeezed dry.
This giant sucking noise explains the Piketty effect, not any set of wrong policy directions.
The solution is for workers to renounce debt, it is not their debt but that of capital.
Let their system go bust and refuse to pay for it.
But to do that we workers have to wake up and unite together instead of fighting one another over some imagined fear, wrong sex, wrong skin, wrong nation, wrong ideas, wrong culture.
All of that detritus is the fallout of capital’s long terminal crisis.
We have to organise to create a new society, not breath their life into the zombie.
Delta is a kind of metaphor for capitalism rotting on its feet. It is the nature that capital raped for centuries to pump out profit, fighting back to extinguish us.
Instead of letting it rip through the masses who live off their labour we need to tame it and make it benign. Use science to restore natural habitats like the Oceans, like Amazon, and end the runaway capitalocene leading to further extinctions.
We need to keep all gains of human civilisation, the technology, the enlightenment, the legacy of pasty revolutions that aim to reduce labour time and produce enough to eliminate scarcity and create plenty.
Mutually exclusive statements there, I’m afraid.
We either have a livable environment or industrial civilisation for a short time longer; we cannot have both.
When the world is increasingly short of energy (which it is) you cannot ‘eliminate scarcity’.
Overpopulation and overconsumption are what have caused scarcity.
The only things we are not short of are ignorance and stupidity.
Yes, yes, yes, TM and DB. How and when do we start? We are more like a bunch of frogs in a pot of heating water.
First step is to break from the Capitalist Parties including Labour and Greens, and form a ‘Workers Party’ of the whole left that agrees, first, that bourgeois parliament cannot solve our problems and, second, that a Workers’ Government necessary to expropriate the ruling class can be formed based on workers’ councils in every city and town.
Wrong, wrong, wrong AFKT.
You are projecting capitalism into the future.
Industrial society is historically that of capitalism.
Scarcity is the creation of class society.
Post-capitalist growth will be planned and sustainable growth.
The excess production which creates waste and pollution will be stopped.
‘Clean and green’ under capitalism is impossible but possible under socialism.
The reason is that the market is anarchic and overproduction is necessary for profit.
Under socialism production is planned and technology used to produce for needs not greed.
As a result the demographic transition will bring a halt to population increase.
Overproduction by definition will cease due to degrowth.
Energy sources, solar and wind will also be reduced as part of planned production.
We are not doomed. We can build a new society and restore harmony with nature.
New Flash: Neo liberal government increases the cost of everybody’s already overpriced mortgages and rents to help reduce the cost of living.
In related news: Banks and wealthy to get richer.
Private debt!
I can remember after GFC warnings against carrying lots of debt.
I liquidated my credit card: zeroed the balance and mothballed it.
It’s a shame others didn’t do the same.
Remember the Global Financial Crisis and private debt warnings?