The economic collapse of Middle Earth. John Key's failure writ large.

This article is republished from The Automatic Earth blog site. It makes very revealing reading especially as the writer dissects the economic failure that is John Key and his off siders Bill English and Steven Joyce.

There’s Trouble Brewing In Middle Earth

 

 April 5, 2015  Posted by Raúl Ilargi Meijer at 11:01 am Finance Tagged with: Auckland, China, dairy, Fonterra, home prices, logging, milk, New Zealand, timber, tourism

For the second time in three years, I’m fortunate enough to spend some time in New Zealand (or Aotearoa). In 2012, it was all mostly a pretty crazy touring schedule, but this time is a bit quieter. Still get to meet tons of people though, in between the relentless Automatic Earth publishing schedule. And of course people want to ask, once they know what I do, how I think their country is doing.
My answer is I think New Zealand is much better off than most other countries, but not because they’re presently richer (disappointing for many). They’re better off because of the potential here. Which isn’t being used much at all right now. In fact, New Zealand does about everything wrong on a political and macro-economic scale. More about that below.
I’ve been going through some numbers today, and lots of articles, and I think I have an idea what’s going on. Thank you to my new best friend Grant here in Northland (is it Kerikeri or Kaikohe?) for providing much of the reading material and the initial spark.
To begin with, official government data. We love those, don’t we, wherever we turn our inquisitive heads. Because no government would ever not be fully open and truthful. This is from Stuff.co.nz, March 19 2015:

New Zealand GDP grew 3.3% last year

New Zealand’s economy grew 3.3% last year, the fastest since 2007 before the global financial crisis, Statistics NZ said. Most forecasts expect the economy to keep growing this year and next, although slightly more slowly than in the past year. For the three months ended December 31, GDP grew 0.8%, in line with Reserve Bank and other forecasts. That was led by shop sales and accommodation.

That sounds great compared to most other nations. But then we find out where the alleged growth has come from (I say alleged because other data cast a serious doubt on the ‘official’ numbers):

The economy grew a revised 0.9% in the September quarter, down from 1% reported earlier. Retail and accommodation increased 2.3% in the December 2014 quarter, buoyed by a 15% increase in international tourist spending, as reported on Wednesday. New Zealand household spending also increased 0.6%. [..]
“Spending by Chinese, US, and UK visitors all increased in 2014, though Australians spent less.” Australia is New Zealand’s biggest tourism market, but the New Zealand dollar has been high against the Australian currency, trading at A96.5c on Thursday. The exchange rate was under A80c at the start of 2013. Total visitor spending last year hit $7.4 billion, up 13% on the previous year. [..]

(Note: $1 US = $1.3156 NZ today.)

Increased banking activity was reflected in a 1.1% rise in financial services this quarter, while housing investment rose 5.2%.
[..] The figures also showed the first fall in real incomes since the middle of 2012. The inflation-adjusted purchasing power of disposable income was down 0.5% in the December quarter.

We’ll get back to housing in a bit. And by all means, keep those last few numbers in mind: while the economy ostensibly grew by 3.3%, disposable income was down. That’s what you call a warning sign.
But let’s focus first on tourism and especially on China. While overall tourist spending rose 15% in 2014, as part of a later quote in this article we will even see that “tourism from China was up 40% in the first two months of this year from a year ago..”
Still, that cannot make up for that other big trade with China, exports, in particular of New Zealand’s biggest industry, dairy, and the second biggest, timber. There things are not looking nearly as rosy. And after reading the next piece, I’m wondering how the economy could possibly have grown by 3.3%. More from Stuff.co.nz, dated March 25:

Dairy Slump Hits New Zealand Exports To China

New Zealand posted a small trade surplus of just $50 million in February with dairy exports down heavily, especially to China, New Zealand’s top export market. Some economists had expected a monthly surplus of about $350 million. The trade shortfall for the year ended February 2015 was a deficit of $2.2 billion. Exports to China have boomed in the past few years, but melted down last year as dairy product prices plunged. Total exports to China in February were down more than 36% on the same month last year.
China remains New Zealand’s biggest export market, worth almost $9b in the past year, just slightly ahead of Australia. But the trend for exports to China has been falling for the past year, and is down 45% from the peak in late 2013. In fact, it has returned to levels seen in 2012. [..] Total exports were worth $3.9b for the month, just barely ahead of monthly imports which were also about $3.9b.

So sure, the 3.3% was over 2014, and this piece concerns this year. But it also says ‘the trend for exports to China has been falling for the past year,’ and ‘..The trade shortfall for the year ended February 2015 was a deficit of $2.2 billion..’ and that can only leave me wondering again what real GDP growth was. This is from RadioNZ, April 3:

Export Drop Rattles Companies

Confidence among manufacturers and exporters has taken a hit with export sales in February down 27% compared with a year ago. A survey found net confidence – which includes measures of cash flow, profitability, investment, staff and sales – fell into negative territory for the first time since April 2013. Net confidence was minus 13, down from 21 in January. The sample of Manufacturers and Exporters Association members covered companies with combined annual sales of $178 million, with 68% of those from exports. Association president Tom Thomson said currency volatility was the biggest issue for exporters, with the big jump in the US dollar forcing up the price of some raw materials.

Now I’m wondering which raw materials this fine man has in mind. See, I can imagine currency volatility being a bit of a drag, but not too much for New Zealand manufacturers, because as far as I can see the country’s exporters don’t seem to import much in the way of raw materials. The main exports, as I said, are dairy and timber, with a bit of meat thrown in, none of which require raw materials imports, and what the US dollar drives up in there would help New Zealand more than hurt it. That the New Zealand dollar itself has gained vs various other currencies, while true, is a whole other story.
New Zealand’s dairy industry has been thrown together since the start of the century in co-op Fonterra, good for 30% of global dairy exports – most dairy farmers are shareholders (mind you, no country the size of New Zealand should ever even think of exporting 30% of the world’s anything, of course, unless it’s something unique on the planet and it comes in small quantities). Fonterra’s by far biggest clients are the lactose-intolerant Chinese, who import about all the milkpowder – for their babies – they can lay their hands on, following a domestic tainted milk scandal a few years back. Still, to establish your biggest industry around one single client is obviously a very risky venture. And now there’s the added problem of dropping prices. The New Zealand Herald, April 2:

World Dairy Prices Slide 10.8% On Supply Concerns

International dairy prices continued to reverse gains made early this year at this morning’s GlobalDairyTrade (GDT) auction, putting downward pressure on Fonterra’s $4.70 a kg farmgate milk price forecast and raising concerns about next season’s likely payout. The GDT price index fell by 10.8% compared with the last sale a fortnight ago, when prices dropped by 8.8%. Big falls were recorded for the key products of wholemilk powder – down 13.3% to US$2,538 a tonne, skim milk powder – down 9.9% to US$2,467/tonne.

That 10.8% price drop occurred in just 2 weeks. There can be no doubt that if your economy depends so much on one sector and one client, you’re vulnerable. Probably as much as oil producers, who saw their prices drop more, but who mostly have higher profit margins. What hasn’t helped New Zealand dairy farmers is the Russian ban on EU milk products; these will now have to be sold on world markets. What won’t help either is the recent lifting of EU milk quotas, which will bring a huge flood of additional milk on the market. A market that is already drowning in milk. RadioNZ, April 2:

World ‘Awash With Milk’

The Government is blaming a slump in milk prices on the world market being awash with milk. But New Zealand First leader Winston Peters said National’s economic policies and the high value of the New Zealand dollar were not helping dairy farmers. In the Global Dairy Trade auction prices dropped 10.8% overnight to $US2746 a tonne, the second fall in a fortnight. Mr Peters said he predicted the fall and it was a sign of rural areas lagging behind. “I’ve been saying it for a long long time – what you’ve got is a fixation with Auckland, hollowing out the provincial economies and sucking all the attention and money to Auckland and that is not going to go on any longer.”
Mr Peters said New Zealand had a free market system that no other country followed and he would legislate to control the exchange rate, similar to Singapore’s system. “The one country that’s not devaluing at the moment is New Zealand – every other economy has. [..] Economic Development Minister Steven Joyce firmly rejected that idea. “Well, with the greatest respect to Winston I am old enough, and so is he, to remember the last time we tried to set the exchange rate in this country and it wasn’t that successful…
“What he is basically saying is that he would legislate, presumably, to put the exchange rate at a level it won’t naturally go and that means effectively increasing costs for the consumer and decreasing costs for exporters.” [..] Meanwhile, the Fonterra Shareholders Council said some frustrated farmers were considering leaving the co-operative due to the price slump.

For more than a few farmers, the situation has already proved too much. NZ Herald, Jan 11:

Stress Too Much For Farmers

At least four farmers have taken their lives since Fonterra cut its milk payout forecast for the coming season. On December 10, the dairy giant dropped its payout forecast for 2014-15 to an eight-year low of $4.70 a kilogram of milk solids. That’s nearly half the $8.40 paid in the 2013-14 season and is estimated to mean an income drop for farmers of $6.6 billion. Federated Farmers dairy industry group vice-chairman Kevin Robinson confirmed to the Herald on Sunday that it was aware of the December deaths. “There’s been discussion through Federated Farmers email about them,” he said.
Several industry experts blame high levels of rural debt for increased stress on farmers. In total, 14 farmers have taken their lives in the past six months, Chief Coroner Judge Neil MacLean said. The most recent four deaths were also confirmed by Te Aroha farmer Sue McKay, the administrator of a private Facebook-based support group. She added: “I also know some local hospitals have a number of farmers in them from attempted suicide. If there’s three in one ward alone, there will be more in other hospitals.”
Whole milk powder prices were down 11% in the month and 52% lower than a year earlier. Cheese also dropped 5% over the month.

But New Zealand also has a whole different side. If anything could explain the 3.3% GDP growth number for 2014, I’m guessing it must be this: a real estate bubble that would put most of Charles Ponzi’s heirs to shame. Not 10 years ago, mind you, Americans, but today. Will they never learn, you ask? No, they will have to have their faces pushed squarely through the stucco walls. And they’ll probably still have hope for a recovery when they come out at the other side. NZ Herald, April 5:

Hot Properties: Auckland Valuations Out Of Date Within Months

Council valuations are already out of date, with homes selling in Auckland’s overheated property market on average for more than 15% above their figure of six months ago. And previously unfashionable suburbs have recorded some of the biggest spikes as desperate buyers look for their first home. Mt Roskill made the biggest jump in the Real Estate Institute figures, which are based on Auckland sales in February and compared against capital valuations made in July last year. The valuations, which do not involve a property inspection or include chattels, were made public on October 1.
Even suburbs among the 10 with lowest rises, such as Remuera and Te Atatu Peninsula, were up 13%. Properties sold by Bayleys Real Estate last month included a West Harbour home bought for $700,000 more than its capital valuation of $900,000 and a Glendowie home with a capital value of $1.13m that sold for $1.575m. An Avondale home sold for $590,000 — $130,000 above valuation.
REINZ chief executive Colleen Milne wasn’t surprised because city fringe suburbs were now out of reach for many. The hot market made it hard for capital values to keep up, Milne said. “There has been a 19.9% median movement in Auckland in the last 18 months. I thought the CVs seemed to be quite appropriate at the time, but the whole thing is just supply and demand — we have a lack of houses,” she told the Herald on Sunday.

A ’19.9% median movement in Auckland in the last 18 months’ is about 13.25% per year, a doubling time of just over 7 years. Auckland apartment prices in the Trade.me graph below, which covers February 2014-February 2015, would double every 3-4 years.
It must be an Anglo-Saxon disease. You can see it in London, in Sydney, Melbourne, New York, Toronto. The new normal way to make your failing economy look ‘healthy’ is to sell assets to any rich foreigner or investment fund who comes knocking, no matter what the consequences, short term or long term. In all these cities, young people can forget about buying a home, that allegedly government supported dream.
And everyone but the rich are pushed out ever further into the boondock burbs. It’s a ‘policy’ that kills cities, of necessity. Cities need people, real people, all people, poor and rich and old and young, that have grown up where they live, they love where they live, they are interested in making it look good and feel good. This is an ongoing and organic process, because cities are alive, and yes, you can kill them. But that’s for another story.
Back to New Zealand’s reality for the vast majority of people, who will never be able to fork over 100s of 1000s of dollars for a house. People like the workers in the timber industry, who see slowing Chinese demand translated into job cuts both for those who cut the trees and those who transport them.
Again, a dumb idea to base a whole industry around one client, but the men and women who did the job were just glad they had work. And now they don’t anymore. Jobs that in all likelihood will never come back again. China won’t have another debt-financed growth spurt, and there are no other candidates waiting on the horizon.
And that’s all a big shame. New Zealand is not poor, but it’s by no means as rich as Australia or Canada or Germany or the US. What it does have is the potential to be largely self-sufficient. A potential that is being squandered in order to play with the big boys of globalized trade.
New Zealand has only 4.5 million citizens, one third of which live in Auckland. It has vast tracts of productive land that are now used to feed export oriented cows and American pines, neither of which are even native. It could have a great shoe industry, plenty of leather, and a textile industry, plenty of wool. But New Zealand, like everyone else, imports such basic needs from China. While having scores of unemployed people. When will that light go off?
The country’s prime minister since 2008, John Key, used to work at Merrill Lynch and the New York Fed, and that sort of background guarantees valiant efforts to sell anything in the country that’s not bolted down, and take an axe to what is. It also guarantees zero initiative to become self-sufficient.
But then there are many tragic countries and societies in the world who all suffer from the same maladie. I’ll leave you with some reflections by the man who I’m told is New Zealand’s best business writer, Bernard Hickey in the NZ Herald:

New Zealand’s Economic Winds Of Change

Chaos theory calls it the butterfly effect. It’s the idea that a butterfly flapping its wings in the Amazon could cause a tornado in Texas. The New Zealand economy has plenty of its own butterflies changing the weather for GDP growth, jobs, interest rates, inflation and house prices. [..] One of the flappiest at the moment is the global iron ore price.
It’s barely noticed here but it’s an indicator of growing trouble inside our largest trading partner, China, and it is knocking our second-largest partner, Australia, for six. It fell to a 10-year low of almost US$50 a tonne this week and is down from a peak of more than US$170 a tonne in early 2011.
China embarked on an infrastructure spree after the global financial crisis. Over the three years to 2013, China poured 6.4 gigatonnes of concrete, which was more than was poured in the US in the entire 20th century. All that concrete needed reinforcing with steel and China didn’t have enough iron ore and coking coal to make it. That building boom created a glut of apartments and debt, which China now needs to digest. [..]
.. iron ore production in Australia has only now ramped up to its peak levels. Weak demand met high supply to produce a price slump. This all may seem irrelevant to New Zealand, but it’s not. The Australian dollar has fallen in response to the iron ore crash, while New Zealand’s dollar has remained strong because our economy is humming along, thanks to building surges in Christchurch and Auckland and plenty of spending and investment.
That divergence between the Australasian economies drove the New Zealand dollar to a record high of well over AUD$98 this week. Dollar parity would make all those winter holidays on the Australia Gold Coast and trips to shows in Sydney and Melbourne cheaper and generate a fierce headwind for manufacturing exporters and tourism businesses here that sell to Australians.
President Xi has reinforced the contrasting effects of the changes in China on Australia and New Zealand by encouraging consumers and investors to spend more of China’s big trade surpluses overseas. Tourism from China was up 40% in the first two months of this year from a year ago, and there remains plenty of demand from investors in China for New Zealand assets.
The dark side of this tornado in New Zealand after the flapping of the butterfly’s wings in China was felt in Nelson this week. The region’s biggest logging trucking firm, Waimea Contract Carriers, was put into voluntary administration owing $14m, partly because of a slump in log exports to China in the past six months.
That’s because New Zealand’s logs are now mostly shipped to China to be timber boxing for the concrete being poured in its new “ghost” cities. The Chinese iron ore butterfly has flapped and now we’re seeing Gold Coast winter breaks become cheaper and logging contracts rarer.

Robert Reich on why austerity and tax cuts for the rich are bad economics.

This talk by Robert Reich, courtesy of Social Journal Europe, demonstrates the fallacies that underpin the economic policies entrenched in the National Party and their fellow conservative poltical allies.
It makes rivetting viewing and provides even more reasons why NZ needs to be looking at more socially responsible and responsive policies.
http://www.socialeurope.eu/2015/03/the-3-biggest-economic-myths/

The scandals that hang around John Key's neck

John Key's cabinet has been the most scandal ridden in recent political history

The writing is definitely on the wall for the Key owned National Party. The list of disgraced MPs and forced resignations from the Cabinet from this administration is the worst in recent political history.
From Richard Worth, Pansy Wong, Nick Smith, Phillip Heatley, John Banks, Hekia Parata, Judith Collins and, now, Maurice Williamson the scandals are clear demonstrations of John Key's inability to act as a responsible and ethical PM. The questionable behaviour by the rank and file MPs like Garrett (ACT) and Aaron Gilmore add more to the public concern about the National-ACT government.
In the light of these scandals it should become obvious, even to the usually deaf John Key, that Judith Collins is, like so many of his cabinet, a liability not just to the National Party but to the reputation of the country and as such she must go and go quickly. (When Fran O'Sullivan, who usually shills loudly for the Key owned National Party, declares that Collins is a liability to the National Party & Government then one knows that the skids are truly under the PR created government of John "Smile, wave, scuttle and run" Key.
Despite Bill English's protestations at this weekend's National Party regiona conference it would be hard to find anyone who would believe in the competence of Key or his corporate crony hugging ministers especially as rumours of discontent, fueled by National blogger, Matthew Hooton, with Key within the National Party have begun to swirl in the blogosphere.
The disarray and sense of panicked lack of direction in the National Party was in clear evidence in the Judith Collins- John Key linked blogger's attempts to muddy the waters around the scandal of Maurice Williamson's ties with the $22000 Chinese donor to the National Party and, after being told that her complaint to TVNZ about the reporting of her Oravida dealings had been rejected
(Television New Zealand's rejection of a complaint from Justice Minister Judith Collins is another blow to the Justice Minister's battle with the media.
The complaint relates to a TVNZ Press Gallery report on One News in March, looking at revelations in Parliament about Oravida, but the state broadcaster has rejected her complaint following an investigation.
TVNZ declined to spell out the findings of its investigations, or the date of the rejection letter.
But it has been confirmed the minister was told well before her altercation in the weekend, when she accused TVNZ political journalist Katie Bradford of seeking intervention in a personal matter in 2010.), Collins' own vicious outburst attacking a TVNZ journalist by name followed up by trying to accuse the NZ First Deputy Leader of actions similar to that engaged in by Williamson and the messages of impending defeat on September 20th delivered by English at the Waipuna Lodge this weekend may have been supported by the substantial earthquake in Wellington which would have shaken Key's belief that he is truly a national treasure.

Raising the Minimum Wage- How the White House argues the need.

This presentation from Slideshare provides the rationale for an increase in the minimum wage from the White House's analysis.

The points made are as relevant in New Zealand as they are in the US and provide the ammunition necessary to demonstrate the instrangence of the Key-English-Joyce arguments that demand an even lower wage regime in NZ despite the Key released recent election year offer of half a stick of chewing gum an hour increase in the minimum wage in an attempt to defuse the traction being gained by Cunliffe and the Labour Party in support of the Living Wage Campaign.

Wealth distribution theory according to John Key.

How John Key sees the world the justification for tax cuts for the uber wealthy.

Despite all evidence to the contrary John Key, Bill English and their asset stripping mates persist in believing the myth of the golden deluge or trickle down economics to justify increasing taxes on the workers while cutting tax for the uber wealthy money speculators.

 An even more graphic demonstration of the social structure that corporate feudalism has imposed on our society. As the countries assets are steadily hocked off to the corporate raiders and asset strippers the concentration of the country's wealth and benefits in the hands of the top.0001% of the population will be even more pronounced.

Neo-Liberal Economics survives because politicians believe inthe Easter Bunny and other Fairy stories.

Why Are Neo-liberal Ideas So Resilient?

30/10/2013 by Vivien A. Schmidt and Mark Thatcher Leave a Comment

Vivien A. Schmidt

Given the abject failure of the Neo-liberal policy offer, why has it persisted as the dominant approach to European policymaking and is there any way out?

Despite the economic crisis that hit the US and Europe full force in 2008, political leaders have made little attempt to rethink the neo-liberal ideas that are in large part responsible for the boom and bust, let alone to come to terms with how immoderate the ‘Great Moderation’ really was. Much the contrary, neo-liberal ideas continue to be the only ideas available.  In the financial markets, where the crisis began, reregulation remains woefully inadequate, while the only ideas in play are neo-liberal, either for more ‘market-enhancing’ regulation or in favor of greater laissez-faire. The biggest puzzle, however, is the response to the crisis by Eurozone countries that have embraced ‘market discipline’ through austerity and, in so doing, have condemned themselves to slow or no growth.   This is in contrast to the US, which has posted better economic results, despite being torn between Republican fundamentalists advocating austerity and a more pragmatic leadership focused on growth.

Mark Thatcher

Our question, then, is:  How do we explain the resilience of neo-liberal economic ideas?  Since the 1980s, why have such ideas not just survived but continued to be dominant? Neo-liberalism entails belief in competitive markets enhanced by global free trade and capital mobility, backed up by a pro-market, limited state that promotes labor market flexibility and seeks to reduce welfare dependence while marketizing the provision of public goods.  The watchwords for such neo-liberalism are liberalization, privatization, deregulation, and delegation to non-majoritarian institutions such as ‘independent’ regulatory agencies and central banks.  The touchstones highlight the importance of individual responsibility, the value of competition, and the centrality of market allocation.  The neo-liberal mantra presents the state as the perennial problem, the market as the solution – even today, despite the fact that the crisis was caused by the markets, not the state.

So why, in light of the crisis, has there been no major shift in ideas, either back to the neo-Keynesianism that brought the postwar ‘Golden Era’ or forward to something new? How do we explain the fact that neo-liberalism continues to permeate how people think and talk about state and market?  We propose five lines of analysis to explain such resilience:  the flexibility of neo-liberalism’s core principles; the gaps between neo-liberal rhetoric and reality; the strength of neo-liberal discourse in debates; the power of interests in the strategic use of ideas; and the force of institutions in the embedding of neo-liberal ideas.

First, the generality of neo-liberalism’s core principles, focused on competitive markets and a limited state, make it highly adaptable to changing circumstances and needs.  Thus, neo-liberalism has been able to move from ideas focused on the ‘rollback’ of the state to free up the markets in the 1980s under conservative leaders to the ‘rollout’ of the state to make markets work more freely under progressives in the 1990s.  It has also been able to absorb seemingly contradictory ideas, as in the case of the welfare state, where after an initial clash with social democratic ideas, through attempts at passive reduction of social spending and job protections, it incorporated such ideas in programs that sought to make active use of the welfare state to promote market efficiency via ‘active labor market policies.’ Finally, it has equally been able to undergo metamorphoses such that ideas discredited in previous periods recur, returning in new guises, such as the 1920s discourse of ‘sound money’ reappearing in the 1970s as monetarism and in the late 2000s as ‘sustainable debt.’

Second, neo-liberalism often works only in the rhetoric, not in the reality of implementation.  Notably, many neo-liberal policies – such as cutting public spending, reforming welfare, and reducing regulatory protection – are difficult to implement and extremely unpopular politically.  This helps explain why promises to cut back the state for the most part turned out to be hollow, in particular as state restructuring did not lead to a decrease in its size, nor did it necessarily reduce public spending.  Deregulation, rather than getting rid of the state, simply led to reregulation of a different kind.  But rather than a weakness, this can be seen as a strength, since lack of implementation can serve neo-liberal politicians also as a rallying cry, to call for more neo-liberalism.

Third, neo-liberal ideas have generally been more successful in policy debates and political discourse, winning in the ‘battle of ideas’ against weaker alternatives.  In some cases, that strength may come from the seemingly common sense nature of neo-liberal arguments.  For example, appeals to the ‘virtue’ of sound finances using the metaphor of the household economy—extrapolating from the need to balance one’s household budget to the need to do the same for the state budget—may resonate better with ordinary citizens than the Keynesian counterintuitive proposition to spend more at a time of high deficits and debts.  In other cases, neo-liberal success can be attributed to the reframing of current problems—say, as a crisis of public debt rather than of the banks; to the narratives—about public profligacy being the problem, belt-tightening the solution; and to the myths—for the Germans, that belt-tightening is the only way to avoid the risks of hyperinflation of the early 1920s, thereby ignoring the risks of deflation and unemployment of the early 1930s that led to the rise of Hitler. Equally importantly, it may be that neo-liberals are not so strong but their opponents are weak.  Where, after all, have the center-left parties been in all of this, in particular in Europe throughout the Eurozone crisis?  Notably, only very recently have European social democratic leaders called for growth, even as they continue to dole out austerity.

Fourth, powerful coalitions of interests often take up neo-liberal ideas for their own strategic purposes, whether they believe in them or not.  Economic actors may benefit materially, notably through lower taxes or the new opportunities opened up by ‘deregulation’ and privatization. Bankers have been laughing all the way to the bank.  Politicians also can benefit by using neo-liberal ideas to gain or retain political power while institutional actors—regulators, central bankers, and the like—gain autonomy and increasing power.  All of this, moreover, tends to be self-reinforcing, since the more neo-liberalism takes hold, the more it is likely to consolidate such actors’ commitment to neo-liberal ideas, as well as to create an attitude of ‘if you can’t beat them, join them,’ as in the center-left’s adoption of neo-liberal ideas beginning in the 1990s.

Fifth, the neo-liberal ideas gain force from their institutionalization in rules and regulations, as well as in the organisations, including the ‘non-majoritarian’ independent regulatory bodies such as the independent central banks, the international credit-rating agencies, and the standard-setting bodies that are out of the reach of national state control.  Moreover, in the EU, the successive pacts for stability in the Eurozone – beginning with the Stability and Growth Pact that consecrated the 1990s Maastricht criteria for monetary union and culminating with various pacts during the Eurozone crisis – ensure that neo-liberal ideas about fiscal consolidation will be difficult to reverse, regardless of their failure to solve the crisis.

These five lines of analysis leave us with one final question: given all this resilience, is there any way out of neo-liberalism? One pathway could be collapse from within, as the contradictions inherent in neo-liberalism become increasingly clear—such as between the ideal of a limited state and the practice of the state playing a strong role to enhance markets.  Another could be rejection from without, as the broken promises, indeed the failures, of neo-liberalism become ever more apparent to citizens.   Yet another is that strong ideational alternatives to neo-liberalism gain strength, say, with new approaches to economic governance that put the polity before, rather than after, the economy.  It is also possible that neo-liberalism loses the support of powerful interests, or that new coalitions emerge.  Perhaps the social democrats will begin to coalesce behind a new set of ideas.  Finally, it may very well be that the institutions of neo-liberalism break down, are replaced, or evolve as a result of new coalitions of interests with new ideas about how to solve the problems.  But for any of these eventualities, things are likely to become much worse, before we see any new light at the end of the tunnel.

AUSTERITY ECONOMICS AND BEING ECONOMICAL WITH THE TRUTH

Austerity, Growth And Being Economical With The Truth

This article from From SOCIAL EUROPE JOURNAL.deserves reading especially when we consider the economic policies being followed by the neo-liberal asset stripping government of John, PinoKeyo, Key here in New Zealand.

 

 01/10/2013 by Simon Wren-Lewis 

Simon Wren-Lewis

OK, I know that those more seasoned in trying to present simple economic ideas in a politicised environment know this happens all the time. And damn it I knew it was going to happen too, as I clearly predicted in one of my early posts. But still, despite my attempts to mock, the argument that positive growth proves critics of austerity wrong continues to annoy me. So here is my attempt to say why it bothers me so much, but after this post I really will try to move on.
Just in case you have not been convinced by my earlier posts of just how ludicrous this argument is, think about this. US growth became significantly positive at the end of 2009, and has remained so in nearly every quarter since then. So if positive growth proves critics of austerity are wrong, then the austerity debate in the US would be well and truly dead by now.  Those that refused to admit this would be completely ignored. Yet the opposite is true.
So the amazing thing is how the idea that the emergence of growth after years of stagnation proves austerity was just fine could gain a moments traction. Do not get me wrong. There are some arguments in favour of austerity that should be seriously debated. But this is not one of them. Instead the argument is just silly. So how can people get away with making it?
The first point to make is that although the argument is obviously silly to anyone with a modicum of macroeconomic knowledge, to interested people without that knowledge, but who get to listen to (or even interview) people like George Osborne, it is not immediately obvious. It becomes pretty obvious once it is explained (my example of deliberately shutting down part of the economy was designed with that in mind), but you need to be exposed to someone who can explain that. So, for those just interested in scoring political points, there is a temptation to make the argument if they think they can get away with it.
However I do not think that excuses George Osborne, or European politicians who have done the same for the Eurozone. We may pretend to believe that all politicians lie through their teeth all the time, but actually we do expect people like the UK or German finance ministers to avoid talking economic nonsense. At the very least we expect their civil servants to stop them saying things that are nonsense. Well not this time.
But there are limits to what politicians can get away with.  The interesting question is what those limits are, and what governs those limits.
Sometimes politicians can get away with bad arguments because they are based on half truths. The example that comes to mind is the idea that current austerity is required because of fiscal profligacy on the part of the past Labour government. While that myth annoys me because (a) it is used to support a damaging policy, and (b) because having crunched the numbers I know it’s untrue, the existence of the myth does not surprise me in the same way. As I have said before, the half truth here is that Gordon Brown was a little imprudent by being overoptimistic about tax receipts. Furthermore, if he had known in advance that the global financial sector was going to blow up he would have been much more cautious before that happened, so any data that is by construction wise after the event will suggest he was not cautious enough. This all means that for those who want to mislead there is the seed corn with which to grow this myth.
Nothing like this is true for the ‘growth proves austerity right’ idea. Instead it is an example of completely misrepresenting the argument of your opponent. The overwhelming majority (maybe all) of the economists who criticised austerity said that fiscal contraction would reduce the level of output in the short run. They may also have been concerned that this short run deflation might have negative longer term consequences. The deception is to morph that into ‘critics of austerity said that the economy would never grow again as long as austerity lasted’. Now I’m sure you could find some person (call them X) who was foolish enough to say the economy would never grow while austerity lasted. But everyone knows that Paul Krugman, or Brad DeLong, or Jonathan Portes are not X. Yet those making the ‘growth proves austerity right’ argument deliberately talk as if all critics of austerity were like X. It is a deliberate deception. It must be particularly galling for Martin Wolf to find his own newspaper doing this to him.
Economists whose job involves communicating with others, and media organisations that purport to have some economic expertise, have I believe the equivalent of a duty of care. It is their job to make sure people are not misled by arguments that they know are obviously wrong. What makes me cross is seeing some who choose not to exercise this duty of care.
Let me use an analogy. You are a science reporter for a newspaper, or even a reporter working for a magazine like the New Scientist or Scientific American. You have to comment on a politician who claims that because it snowed a lot this winter, climate change is clearly rubbish. What you would do in those circumstances is patiently explain why the politician was talking nonsense, discussing trends and noise and the like. You would not say as a prelude that the politician ‘makes a serious case’. You would certainly not write a leader in your paper saying the politician was absolutely right!
Just imagine it. A leader in the New Scientist or Scientific American saying that politicians have won the climate change argument because of recent heavy snow. So why is that idea inconceivable, but a leader in the Financial Times saying that recent UK growth proves critics of austerity are wrong goes without comment? It has nothing to do with economists being divided about the wisdom of austerity: as I said, there are arguments on austerity that should be debated, but this is not one of them. It cannot be because austerity is so politicised, because climate change is also highly politicised. It cannot be excused by saying that leaders are just opinions: you do not expect opinions in serious newspapers to be based on deliberate misrepresentation. So what is going on here? Would anyone from the FT care to comment?
This post was first published on Mainly Macro

NACT Humour

The Economy is So Bad under a NACT Government that....

• I got a pre-declined credit card in the mail.

• I ordered a burger at McDonalds and the kid behind the
counter asked, "Can you afford fries with that?"

• CEO's are now playing miniature golf.

• If the bank returns your check marked "Insufficient Funds,"
you call them and ask if they meant you or them.

• Parents in Remuera fired their nannies and learned
their children's names.

• That NACT MPs have to take their girlfriends on holidays to preserve their emotional stability as the evidence that their policies don't work stack up.

And finally...

• NACT says they are looking into this Perk Abuse scandal.

Oh Great! The guys who have their hands deep in the taxpayers pockets are
being investigated by the people who claim they don't own the house their family trust own and can therefore rort the taxpayer for rent and who take their girlfriend on an all expenses paid overseas trip to attend a wedding and visit an amusement park while claiming to be a "perk-buster" and have their noses even deeper into the trough!!!
Really makes you feel confident doesn't it?

Hypocrisy and Idiocy in NACT

The recent headlines coming from the NACT government are hardly ones to write home about.

First we have the erstwhile PM pontificating at the CTU conference telling the teachers that they should take a salary cut so the NACT govt can then pay the school support staff properly, then we have "Double Dipton" declaring that the change in "ownership"of his family home in wellington had nothing to do with him being able to rort more of the taxpayers' money in "accommodation allowances" so that he could be a permanent resident in Dipton - a township that hasn't seen him as any more than a temporary resident since he left there to go to school. adding to that rort we then are witness to him being paraded in an election campaign style advertising blitz by none other than the state broadcasting corporation as the front man for a programme named after him and all being declared as being honest and transparent!

Add to that the revelation that the NACT govt is now going to privatise ACC, flog off local body assets, especially water, in the race to "super-size" Auckland and the path to corruption gets even smoother.
Then, today, we get a report that the Herald's favourite "perk buster" and supporter of local democracy, Rodney Hide, has been caught rorting the taxpayer as well. As this story demonstrates:

ACT leader Rodney Hide says he disagrees with the perk that gives MPs a taxpayer-funded 90 percent fare discount for themselves and their partners - but he still used it to take his girlfriend overseas.

The air fares for Louise Crome's trip to London, Canada and the United States are reported to have cost $25,163.

Mr Hide's fares and accommodation cost $26,872.

He said today the perk was "a silly anachronism" but it existed and he couldn't change it.

"I don't agree with that rule but I'm not a martyr," he said on Radio New Zealand.

"I checked twice with the prime minister that it was acceptable. It got all the ticks."

To make it worse Rodney "I'm a little piggy too" Hide declares that because it's alright with Key and the others are doing it too he'll dig his hands into the public purse to entertain his girlfriend with overseas trips again.

Lapsed perkbuster Rodney Hide says he will use his MP's travel expenses again to take his partner overseas.

The Act leader was making no apologies yesterday for the public purse paying $25,163 for his partner, Louise Crome, to accompany him as Local Government Minister on a Super City fact-finding visit to Britain, Canada and the United States, and some domestic travel.

Mr Hide is the second Act MP to run up a big globetrotting bill on the taxpayer by using a travel perk for longstanding MPs.

In July, it was revealed that Act's Sir Roger Douglas, Parliament's most vocal campaigner against wasteful spending of taxpayers' money, had spent $44,411 on travel - most of it on a trip he and his wife took to London to see their son and grandchildren. The figures emerged under a new quarterly reporting regime of transparency for parliamentary spending.

If this isn't hypocrisy in action and being given the "BIG TIC" by the John Key I'm at a loss to discover what might be.

Isn't it about time there was a real public outcry at the high handed manner this NACT government is behaving?

Double Dipton's State House

An exclusive picture of Bill English's new home. This will soon be copied by Phil Heatley and others in the NACT cabinet.

Proof that The Past gives birth to the Present.

I was browsing through a book of Tom Scott cartoons - "In a jugular vein" recently and came across these cartoons commenting on the National government social and economic policies.
Apart from changing the facial features of the social welfare minister (the build is the same) there appears to be little difference between Shipley and Bennett.

Then if we look at the social policies of the Engkeylish government we see echoes of the following.

Then the noises from the Treasury and the Brash consulting group provide reminiscences of this failed economic policy.

The Engkeylish Government crumbles?

Commentary from the right wing and Granny Herald indicate that disillusionment with their favourite sons is beginning to set in.

First: Rodney's favourite: Mr. Garrott: (sorry...... Garrett)

A Government MP has been reprimanded for lewd conduct just weeks after the resignation of National's Richard Worth.

Act MP David Garrett was spoken to by party leader Rodney Hide after making sexual comments to a female member of the party's Parliamentary office.

Hide said last night he had cause to speak to Garrett after learning the fledgling MP had made "off-colour" remarks. He said he hoped the incident would not lead to the end of Garrett's career as a member of Parliament.

Garrett is one of the drivers behind Act's "Three Strikes" policy - and this incident makes for his own second strike. Garrett also came under fire when he compared homosexuality to paedophilia on TVNZ's Eye to Eye show, after he had been drinking.

The new allegations have earned the National-led government a warning that it risks becoming branded as a "government of sleaze". INDEED!!

Second: Key Apologist - Bill Ralston:

In dismissing the need for better political management he shows he is not really a politician. After almost three decades in the business Goff is truly a politician.

Goff understands that a government can be slowly undermined by all the "white noise".

He served as a minister in two governments in which that happened. Labour lost power last year, even though the economy was still strong and it was continuing to deliver the goods to its constituency. It lost because it was gradually overcome by the "white noise" and the public lost faith.

The Government needs to learn it might ignore the "distractions" but that doesn't mean they will go away and the consequences can be fatal.

Third: Matt McCarten: on the Melissa Lee fiasco:

The campaign was deserted by the leadership

Does Key get it that by-elections are national campaigns? Anyone can hold the job as leader when things go well. The test of a leader is when things are not going well. Key failed. He picked Lee against the wishes of the locals, he didn't get his experienced people taking ownership of the campaign and he just wasn't there. But the unforgivable act was Key's holiday on by-election weekend. The best he could do was send Lee a text. None of his senior ministers or even his president was there. Lee was left to face the massacre alone, like a stunned possum in a car's headlights.

If this is how National copes under stress in a campaign, I hope the recession doesn't get too difficult. This by-election shows us that our Prime Minister and his Cabinet can't be counted on when things get tough.

Fourth: Rodney Hide's puppet master - the Nosferatu of NZ politics- Roger Douglas:

"This only enforces the emerging trend we have seen between Mr Key and Mr English. Mr Key announces a stupid idea - be it a cycleway or forced investment in New Zealand - Mr English realises the idea is stupid, and distances himself from it.

"The Prime Minister then becomes hell-bent on scoring another symbolic victory over the Finance Minister - who backs down and Mr Key gets his way. But these battles are only resulting in pyrrhic victories - neither the cycleway nor forced investment will make New Zealand better long term.

"The trend is towards an obsession with massaging Mr Key's political image, at the expense of New Zealand's long term prospects.

Fifth: Brian Rudman: On the decision to waste the Rate Payers' money on a grandiose booze barn or John Key's "Party Central"

Brian Rudman: Government bullies pushing city a wharf too far

Sixth: Christine Rankin's decision to front the support whacking your kids campaign despite the assurance from John Key that she would not be involved in actively campaigning on the issue:

Families Commissioner Christine Rankin's decision to be a face of the "vote no" campaign for the smacking referendum is "quite incredible", Green MP Sue Bradford says.

Ms Bradford was the architect of a 2007 law change which removed the defence of reasonable force in child abuse cases. Ms Rankin vehemently opposed the law change and was spokeswoman of For The Sake Of Our Children Trust.

Tomorrow Ms Rankin will front at the launch of a campaign urging voters to vote no to the question "should a smack as part of good parental correction be a criminal offence in New Zealand"?

That is despite Prime Minister John Key last week saying he would not expect Ms Rankin to continue to campaign against the law change, and the Families Commission saying it supported the new law.

One can only echo the favourite word of the National Party Bloggers: "INDEED!!"

A review worth Reading-How the Money speculators took the world for a ride.

From the New York Times comes this gem of a book review recounting how the money speculators thought they had a magic solution to make debt disappear.
http://www.nytimes.com/2009/06/14/books/review/Barrett-t.html?_r=1&8bu&emc=bua2

One wonders if the Engkeylish NACT government has learnt anything about economics considering that the PM was a key player on the money speculation market and his present puppet masters English & Hide are devotees of the mysticismof speculative policies, privatisation and the mantra "the market will regulate itself."

Can John handle the Jandal?

Now that the election is over and the decision to move N.Z. to the right of the political spectrum has been made the NZ Herald will pull back from its hysterical panicking about Left wing conspiracies and fall into its usual position of campaigning against Trade Unions, State servants and environmentalists of any colour while claiming that it has no bias in any of its editorial directions. Garth George will descend into his monk's cell to contemplate a bluer heaven and worship the apotheosis of John Key and to congratulate himself in self justification for his righteous belief that women are on earth to tempt men from the path to salvation and that with Helen Clark stepping out of the political sphere another temptress has been taken from his dream of paradise here in the Pacific.
However, while the transition proceeds one can offer some comment about the possible stability of the new government.
With a record of policy and position shifting throughout the period since becoming leader of the National Party and in the build up to the election John Key may find that he will be in administrative difficulty once his colleagues get their feet under the Cabinet Table. The difficulties will be compounded with the presence of ACT's Rheinfield - Rodney Hide within the coalition. One recognises that there is no way ACT will want to be sidelined away from its traditional hardline free marketeering, retributive policies beloved of its Nosferatu founder, Roger Douglas and that there will be determined efforts from this quarter to drive National into more radical conservative policy directions.
As well, Hide is very similar in nature to his nemisis- Winston Peters. Both men are driven by ego, both are driven by a single minded belief in their own rightness, both have the natural instinct to hone in on a person or policy with one inclination - to destroy it or come crashing down in their own self destructive nature. One cannot but believe that within 18 months Hide, Rheinfield like, will, with his master, Douglas hive off into the extremities of Friedmanite economics and force a division in the hydra that is the National-ACT-United Futures coalition.
For Key this will mean that he will resort to his usual escape mechanism of making the unacceptable palatable in order to bring Roger and Rodney back into the crypt by flip-flopping on policy, pleading as he does so "political expediency and economic necessity because of the crisis created by the money traders and other free-marketeers."
One predicts that the fallout and consequent retribution on the electors will occur over the following policy areas: Employment Law - as workers rights are scaled back in a return to the elements of the ECA ACT will claim that the process isn't fast and hard enough and agitate for more punative legislation to bring the workers to heel.
Finance - the attacks and raids on both Kiwisaver and the Cullen Superannuation fund will continue with the extreme right of National siding with ACT to reduce both funds to mere shadow of their intended purpose. This will be done with the catch cry of "teaching the worker self sufficiency" and "to reduce reliance on nanny state."
The international credit collapse will be an excuse for the more extreme of the National-ACT coalition to allow Rheinfield Hide open Nosferatu's coffin and allow Roger Douglas to emerge and demand asset stripping, further reductions of workers' rights and conditions, slash and burning of Social Welfare programmes, privatisation of Health, Education, Prisons, Roading and Water reticulation ... so that the "books can be balanced" and "sanity restored to the free market."
The privatisation of ACC - the confusion and fallout as this occurs will see the entire scheme collapse into a miasma of conflicting and reductive insurance policies that extract a lot but provide little while taking the profits overseas.
Education - here the introduction of a failed Bush scheme of National Testing and Reporting (the No Child Left Behind policies) will create tensions in the teaching profession, confusion and resentment among parents and a media frenzy of "let's bash the teachers" which will again lead Key to drop the leader's jandal.
Crime and Civil Liberties - in this area the public will soon come to realise that National - Act cannot deliver on its promise to reduce crime in the community. They will also come to appreciate that the State will intrude even more into their lives as civil liberties are reduced and surveillance becomes a norm.
For Key these tensions will prove difficult to manage as so many of his bench and MPs like, Ryall, McCully, Williamson, Wong, Smith N & L, Brownlee and English, have deep seated and firmly held political beliefs that can be evidenced by their past involvement in retributive legislation that will not be able to be controlled under his natural instinct to gamble for a gain by short term expediency thus opening the possibility of a push by Key's controller, English, to make a push for more overt control of power and a consequent hardening of policy initiatives and true nanny state legislation.
So while the polls may have spoken they spoke for an image not for what lay behind it so that as the next three years unfold and Key's instinctive flip floppery management style fail to control his coalition it should not come as surprise to the more astute observers to see what appeared to be a comfortable majority faction into self destructive quarrelling while Hide and Douglas, like the ghost of Adam, gibber at the table.

Tax Cuts??? John robs the peter to gamble again.

National leader John Key today revealed his plans to destroy KiwiSaver and its long-term benefits for New Zealand for the sake of his own pursuit of power, Finance Minister Michael Cullen said today.

"John Key's announcement today that National would slash by half employer contributions to New Zealanders' personal savings, and cut into many employees' contributions, exposes National's short-term agenda and proves how hollow National's so-called economic growth plan really is.

"National's first instinct is to destroy a programme that will help promote growth and to remove important employment rights that protect employees in KiwiSaver.

"If implemented, this would gut KiwiSaver and sells the 800,000 plus members down the river. It would mean the sell-out of many Kiwis' hopes of buying their first home. It would mean the sell-out of many New Zealanders' opportunity to having a little bit more in retirement," Dr Cullen said.

"The past 18 months of major stress in international financial markets has highlighted very clearly that New Zealand needs to strengthen its savings culture and needs to strengthen its savings and investment record. This is why KiwiSaver is so important.

"The short-sightedness of National's proposed attack on savings is matched only by its attack on investment in research and development and in infrastructure. John Key proposes to axe the R&D tax credit that is a fundamental ingredient in raising the nation's productivity and non-inflationary growth rate over time. John Key also proposes no offsetting increase in public sector research and development," he said.

"All for what? A poorly-designed tax package that delivers nothing to 370,000 New Zealand households that receive Working for Families, reduces legislated tax rates and thresholds for the lowest and highest earners and claws back as much as it gives in tax cuts – and more – for current KiwiSavers.

Note: Impact of National's proposals on modest income KiwiSavers

A person earning $30,000 in Kiwisaver under Labour would save $750 a year themselves, receive a $750 contribution from the government and a $750 contribution from their employer: That is $2,250 a year in their account. Labour has protected workers against employers clawing back their (employers') contribution.

But under National's anti-savings plan, the same person would pay in 2%, that is $375, receive $375 from the government but the $375 from their employer would be paid by the employee because of reduced wages: In other words, that worker would still have to pay $750, but their return would only be $1,125 in their account after a year.

Because these people would not get any additional tax relief under National's plan, they would end up losing $1,125 a year from their savings account in order to pay for National's tax cut package which, by design, mostly benefits those already on high incomes, without children and who do not have a personal savings plan.

Something Old, Something Blue, Nothing new

Recycling is back in fashion with John Key, in typical engkeylish speak, the National Party's "Welfare" policy promises to deliver advantages for the "righteous" and disadvantages for whom righteousness has not been thrust upon.

This article from The Standard is a solid examination of the logic or lack of logic that underpins the National Party's policy position.

Dog whistle politics to some, beneficiary bashing to others. But is there logic to National’s policy on benefits? Gordon Campbell asks:

Will John Key’s policy announcement on welfare this afternoon do much to resolve the problems it claims to address? Hardly…

It is as if National felt the need to beat up on beneficiaries somehow, and somewhere - and so it picked primarily on solo parents, the group of beneficiaries widely recognized as being in LEAST need of extra motivation to get off the benefit.

One angle I thought was interesting was a study done by the Ministry of Social Development which looked at the health (and mental health) status of sole-mothers. If they are already more likely to be sick then sending them out to work with penalties if they don’t is not likely to lead to good outcomes, for either the parent or the children.

And one question I was hoping to hear asked - what are the penalties planned for those who do not abide by the rules? And what happens if there are others (like children) living in the household?

There’s a fundamental difference in approach here with both sides arguing that the studies back their logic. However as Simon Collins suggests:

…there are other factors besides welfare in the breakdown of the traditional family, and forcing parents into paid work may not be the answer.

The Truth Will Out - Secret agendae the not so hidden policies!

Enough Said!!

Check out Rod Oram's comments in SST.

Conflict in the Engkeylish camp of Tax Cuts, asset sales and increased Borrowing.

A simple question: How does a party leader this answer these questions and maintain logic:
"How will you fund the infra-structure building you plan to do with a reduced tax take from the large tax cuts you have promised?"
Answer""By borrowing thus increasing the public debt."
Question: "But aren't you borrowing to fund the deficit created by introducing huge tax cuts?"
Answer: "No we'd be borrowing to build infra-structure."
To any intelligent listener the logic of this series of answers is as somewhat tenuous and revealing of the speaker's fundamental lack of economic logic as the increased borrowing must logically follow from the reduced income created by the tax cutting programme that he espouses. If the Government has a decreased income flow because the tax take doesn't fund the planned spending then the borrowing is necessary to fund the tax-cuts.
Then the real answer must be that given by the man John Key says he'd be happy to resign to after one term holding the reins of power - Bill English who declared in a taped interview at the National Party Conference "We'll sell State assets - i.e. KiwiBank." (Un-said by underlying the message: at least not until we've been wielding power for a term... and have convinced the public that asset stripping, like the cane was said to be, good for the state as the country's assets are best held by foreign companies.) After all selling the family silver will allow National to reduce state taxes and allow private enterprise to levy taxes in the shape of tolls and increased charges and prices.

Pigs might fly and other political tales.

cartoon from The Observer.

A recent story in the Herald trumpeted the “news” that Engkeylish had released a fourteen point policy platform which was a proof that National actually had substance and that pigs actually flew over Kumeu.
The platform was so apparently momentous that the Herald’s editor forgot to include it in the paper’s unpaid for pro National advertisement - the “unbiasedly” labeled “Porkometer” but then there was only one substantive policy among the 14 points - a pledge to award the American owned Telecom $NZ1.5 Billion to provide ultra fast broadband so, according to the reports from the New Plymouth papers, “people can access and download Mr. Key’s Bebo pages faster.”
Based on this rationale one would have to question the logic behind such a policy. As a Waitara High School student very perceptively pointed out “Anyone over 12 with a Bebo site is seriously lacking in judgement.” To argue, as Mr. Key reportedly did, that a $1.5 Billion grant to Telecom to facilitate such activity is certainly not a wise investment in the “knowledge economy.”
The rest of the Engkeylish policy positions were a series of snap frozen, ready prepared instant noodle “solutions” to poll driven asserted social issues. When one looks closely at the “solutions” one re-reads old policy recycled from the National Party policy pamphlets from the past 20 years which, no doubt, reflects the ages of those the Herald would picture as the “young faces of a Key lead National Party.” (Gerry, Lockwood, Hone Carter, Maurice, Tony, Bill, Nick.....who have been around the political traps so long now they qualify as historic trialers.)
Which, of course, brings one back to the waiting for evidence that there is substantive and credible policy coming from the National Party and that one doesn’t have to believe that pigs do fly over Kumeu on a regular basis.
However, it is allegedly getting more and more difficult for journalists to get access to John Key, to listen to his addresses to interest groups and to question him in any depth on policy as the spin-meisters are sealing him off from scrutiny so that his political inexperience and propensity to perform position flip-flops and other gaffes is not revealed to the public. His recent meetings with Business leaders in Dunedin were, reportedly, declared media free zones with the local press being invited to cover his spinmeister controlled walk-abouts which are designed to show John Key as a “real man of the people” who can “relate at the social interface with the working voter.” Unfortunately for the controllers these exchanges are proving to be as gaffe prone as before.
The Dunedin walk-about apparently had John, prompted by his spin-meister, front up to two young women at a cosmetics counter and engage them in a deep and meaningful conversation about their purchases only for the young women to ask the reporter covering the event, “Who was that again?” immediately John had been ushered away from the “photo opportunity.” Ah well he can, perhaps, take solace in the Herald stable-mate publication’s - North & South - headline story that he is “N.Z’s sexiest politician” with 28% of the polling group voting to award him the title.
With such an impact on the electorate no wonder that he is being sheltered and having to have all his positions explained by his controller in chief - Bill English.
Although Mr. English must be finding it hard to convince people that his protege has believability when the public hear him declare one thing on Monday and then contradict himself on the Tuesday because the audience has changed or the poll wind has blown past his office. One is forced to ask how can any National Party policy position be credible if on one day John Key says things like: “Climate Change is a complete and utter hoax.” then, on a different soap box, declare “I firmly believe in climate change and always have.” Or on Kiwisaver ( a policy initiative National voted against.) “Kiwisaver is fundamentally flawed and merely a glorified Christmas Club.” and, on a different soapbox and to a different audience, “Kiwisaver is probably gonna be successful and not too bad.” However he won’t commit himself to stating the exact policy position National will take on Kiwisaver given National could form a government under MMP. (Another issue he can’t make his mind up on - whether to retain MMP or lurch back to the arrogance enhancing FFP system.)
So, the electorate waits for the flip-flop maestro to announce clear, unequivocal policies that are unchanged from day to day, unchanged from audience to audience and remain open to full public scrutiny and a continuously unbiased analysis from release to the election day and beyond and, of course, the pigs will continue flying over Kumeu.

MMP & Tory Policy issues

This comment on the release of the National Party's electoral law "policy" was passed to me - I thought it worth sharing as it reveals the commonly held perception that Key and his ventriloquist - English are but empty vessels when it comes to real policy development.

"Key policies" take on a different hue to what one normally expects leading up to an election. Instead of the profundity of detail and sharpness of focus that should be the hallmarks of well-thought-out ( even idealistic ) policy statements, we are subjected to Key’s announcements which are either knee-jerk critiques or envious blandishments in the form of promised higher tax cuts. How can the electorate possibly vote for a party with hollow or no-existent policies?

Never has so little been offered by so few to so many!