Major had to acquiesce to their whims or else crash the economy. If it can happen to the Bank of England then I guess the little ol’ NZ reserve bank is venerable. I think this falls within the realm of being held to ransom.

I think you’ve got that a little backward. In a clean float, the only speculators make money is off other speculators.

Now, the problem with the UK and the Euro peg, was that monetary policy in the UK was diverging from (largely) Germany. An exchange rate is nothing more than a price. The UK government was trying to say the price of the pound was different to what would be established in a float. UK government couldn’t be right given that monetary policy was diverging.

People who saw the absurdity of this got out of it (it was sufficiently obvious that I recommended shifting from pounds to US dollars before the speculative attack). The attack on the pound was predictable and the peg basically meant the UK Govt had set up a money pump from taxpayers to Soros and other speculators. They couldn’t lose.

The NZ dollar has been ignored as a target of speculative attack because we have had a pretty clean float. There is no money-pump from taxpayers to speculators. You can only make money speculating on the NZD (now) by taking that money off other speculators. It’s a zero-sum game.

“the idea that markets are the only way is a simple minded false hood of a baby economic textbook or of the bush admisistratiom. It is just not how real economics works at all.”
Jeffrey Sachs from the Chicago School.

He has advised many global economies on implementing Douglas-style reforms. Follow the link and Enlighten yourself Ppaul he is a bit more articulate than I am.

This was evidenced during the 90’s when John Major tryed to stabilise the sterling against the deutsche mark to stop this very kind of speculation. The markets or rather(get the semantics right), a small part of the markets, people controlling hedge funds, insiders and the like, started pulling money out of the English economy. To counter the Bank of England raised interest rates to 15%, Investors saw it as what it was, desperation, and continued to pull money. The short of it, the “markets(or rather a few people…) won, Major had to acquiesce to their whims or else crash the economy. If it can happen to the Bank of England then I guess the little ol’ NZ reserve bank is venerable. I think this falls within the realm of being held to ransom.

With regard this private/public asset/liability issue. So if the organisation is the problem get rid of that not the actual assets. I totally agree fire them. Whatever reforms were made when it was privatised could have been achieved by Govt hiring the same staff. Given that $675 million was leaving NZ annually there is even a buffer for public management incompetence. Lets not forget it was returning $1 billion it’s first year out of sale which continues to this day(qualitatively not necessarily quantitatively.”

Alan Greenspan prediction helped us how? Half of the climate scientist in 20 years will be right as well, doesn’t validate all of their science. I am not sure what “trolling” is. I was just interested how National voters see liberalisation helping them as historically this has led to the dissolving of the middle classes, ‘US, Chile Asia. Hence my original comment regarding Billionaires etc. The government is ours, multi national are not, our toy investments only serve to take petty money from the poor of which they would have spent into the economy anyway. Not to mention the net loss as dividends to foreign owners. With regard the economic model, neo classical, was not a relevant comment, touche.

getstaffed -Ha ha. You don’t need to drink the cool aid if you’re not a socially engineered sheeple incapable of independent thought but really good at regurgitating the tyranny of stock answers thrown up by indoctrinated lectures and text books. Bravo business school! Thanks for feedback, I’ve learnt a bit.

Although superficially both people are still equally wealthy, in terms of their personal utility maximisation we have one person with a pair of jeans when they’d have rather had some more CDs, another person with a CD they don’t want when they wanted more jeans. I guess they could trade to get to where they wanted – but what is trading other than the market satisfying a need the government failed to meet?

Sorry, but this pathological hatred of the market is, to me, really people who can’t manage to think big. Markets are fine when they are small – your local farmer’s market is a great idea. Barter markets are even better. But as soon as the market becomes more abstract, involves too much money instead of barter, involves trading in instruments rather than the assets themselves, it automatically becomes evil. When in fact it is exactly the same construct. Willing buyer, willing seller. Not that markets are the answer for everything – clearly they aren’t. And not that markets should be unconstrained – they should be. But damning all markets based on some sort of schoolboy logic is not particularly smart.

Is is absurd that we are held to ransom by “the market” which is really just a word for a minority of people represented by financial institutes, pension, hedge funds etc.

Wow! Someone mixed their communist kool-aid a little stong this evening. Hint: One scoop, not 10 next time.

The last time you shopped at The Warehouse in preference to Smith and Caughies or Kirkaldie and Stains you helped create the very market to which you claim to be held hostage. Likewase when you eyeballed two cans of beans in New World and chose one based on price, country of origin, colour of label etc.

1. You state that “the economic model to which National subscribes”. What exactly is this model? How does it assume infinite resources and infinite lifespans? So far as I can tell the economic model to which National subscribes (as mentioned by John Key in his victory speech) is that pretty much all wealth is generated by individuals in one sense or another, and therefore that any approach to national wealth that fails to reward individuals will inevitably fail. I’m not sure exactly how this assumes infinite resources.

2. The infrastructure to communicate was never a liability. The organisation structure that ran it, and therefore caused it to return a net loss to the country year after year, despite high prices by global standards, was definitely a liability. Once the organisation was sold (with attached liabilities such as redundancy and restructuring costs), the organisation was restructured. Under new management, it became profitable. I agree with you completely that the assets didn’t change all that much, so clearly the change from loss-making to profit-making was related to the ownership structure and management. In fact, exactly the reason it should have been sold. A substantial error in that process was not creating a structural separation between wholesale and retail, but then again, that apparently was a failed reform in electricity, so people can hardly have it both ways.

3. Being “held to ransom” by the market, and your definition of the market as a small minority of people, is absurd. The market is open to all, and is simply the sum total of all buying and selling decisions made by people. The market for bread is not a small minority of people. It is not at all absurd that we need to lay off staff when people stop buying our products, in fact it is entirely rational. To do otherwise would be absurd. As to why people stopped buying our products – well, when people stop buying houses, we stop selling wood. And people stop buying houses because they were protected from their own stupidity for too long by silly regulations, such that when the crash came it was far bigger than it ever needed to be. Of course, the response is more silly regulations. None so blind I guess.

4. What is the point of economists if they can’t predict anything? Like, for example, their complete failure to predict the current crash. Um, except for all the economists who did predict it, including the Chairman of the Federal Reserve Alan Greenspan (currently being blamed for lots) who told us all some time ago that we had an asset bubble fuelled by “irrational exuberance” that would inevitably crash. The problem is that governments took no action, and in fact actively sought to prolong the bubble. They in turn did it because you never got elected by devaluing the largest asset of most of your voting population. Yes, in fact democracy itself was at fault here – all the people around here who didn’t want their house prices to drop, who were riding high.

I’m sorry, you continue to provide caricatures, and enlighten us not at all. You are asking school kid questions as if they were relevant, and presenting straw men that bear no resemblance to what any actual people think. If I were your university lecturer your statements would get a D- “please try harder.”

I suggest you start by trying to explain what it is you think you are arguing against, and then present your argument. At the moment you are arguing against yourself.

Start perhaps with this one. Most people seem to accept that the rich have better health care. They have this better health care because they can afford private health insurance. It seems unfair that some people have better health care than others. Instead of trying to force everyone to use public health care, why should the government not just buy private health insurance for everyone in the country? What exactly would be wrong with that? If you like, I can be more specific about exclusions for emergency cover, mandatory minimum standards, and a bunch of other things. Deal with the philosophy – why would it be wrong? At least we’d then be having an argument about something I actually believe.

Is is absurd that we are held to ransom by “the market” which is really just a word for a minority of people represented by financial institutes, pension, hedge funds etc. It is absurd that businesses have to lay off workers because contractors aren’t buying supplies because people(the markets) have contracted the money supply. The trees are there to mill, the mill to produce timber, the workers, lorry drivers, retailers… In short we stand still because someone speculates somewhere else.

Further what is the point of economists and economics if it/they can’t predict anything? It takes advantage of few obvious logical commonsense truths; supply, demand, equilibrium etc to give it validity and carries it off in to a ludicrously abstract inaccurate measurement of materialistic/societal growth. It uses Poker machine accounting, the guy who always wins $400 and $800 but you never hear about $4000 lost in between. So as with economics where disasters, wars and crime can be good for economic growth with no accounting of the negative aspects and this is the measurement we gauge our elected officials performance on. This abstract number goes up all the while we are working longer and paying more to live despite all the technological advances supposed to make life easier and give us more time. It sort of feels like we’re locked in this dark(as in dim) age of commerse and we really can’t see the logic for the economic jargon.

On the other hand the broader issue of whether government should be using taxpayer funds to compete with tax-paying private enterprise is another sticky issue.

Deregulation of the telecoms market means it would be wrong to go back to state ownership of Telecom.

I think if the state is going to own a business, which competes with private enterprise (who pay taxes), they need to do so one a purely commercial basis – no state subsidies (including capital subsidies). The rest of us have to borrow money to set up businesses, and a real cost of operation is cost of capital. It’s anti-competitive that the state would use our tax money to set up in competition against us without the same operating conditions we face.

Well said Owen…and it needs saying more often…..there were NO assets….there were liabilitys.An asset brings you value….a liabhility takes value away…the State turkeys lost the taxpayer hundreds of millions till they were sold…..they became assets when they operated by the laws of athe market and either turned a profit or went under and the parts were taken up by new fresh industry.

You have mistake the red areas to support labour, they are in fact designated to be carparks and industrial centers, such is the way of change.

Paul, Thanks for taking the time to respond. The economic model which nationl subscribes assumes some objective untruths in that resources are infinite, that there is perfect information and that we live forever. There are a few economists who are highlighting this on google save Stiglitz et al. I was curious to know how people can have such confidence and faith in a model with such observable errors? Mostly however I am searching for insight, in real terms relevant to this election, not stock answer theory rhetoric, about what happens when we implement these polices to NZers and how national voters see these policies playing out in their lives. Information I can’t get off google. I used an example which has affected us all, Telecom and I want kiwis to ask themselves how did they benefit from that transaction? Touche, I should not expect people to respond.

What would the likely vote be for the Red bit if it were standalone? I’m guessing something similar to Jim Anderton’s party – 1-2%.

What would the likely vote be for the Green bit if it were standalone? I’m guessing closer to the poll results – 10% or so.

I think the Red baggage is holding the Greens back. Not really a huge concern for me – I kind of like them being held back. But it is a gap in NZ’s political maturity.

I get a total of 184,000 voted MP or Maori electorate in 2005 and 168,000 in 2008.. no wonder Tariana was tearful on Sat night. And if you look at the majorities in the provinces where Maori are in high proportions it’s even more graphic.. (roughly) BoP 16,000, East Coast 6000, Northland 9400, Rotorua 4800, Waikato 11700, Taupo 5800 and Tauranga 10700.

Add in that about twice as many Maori as Pakeha are emigrating and I think there’s a movement of a Labour base away from it’s party. Like the US, Labour/Democrat support is concentrating coastal in the immigrant cities and in cities that are slow growing like Dunners and PN.

The feeling I get from this is that Maori may remain attracted to their culture but are increasingly seeking their future in emigration and on the General roll.

I also looked at the minor parties since 2002.. they have been decimated over three elections and the Greens may have only held around the 5-6% because they have shifted to an unembarrassed socialist model.. making them the most dishonest party in the Parliament.

JC

Owen. The answer to give people who claim that NZ voted in a Right Leaning govt as a response to the global credit crisis, is that we did not.

We instead voted in a Right-leaning govt as a response to the attacks on family and basic democracy of the left. The global economic problems are simply a coincidence.