Tuesday, 24 January 2006

Exporters pay price for 'inflation fighting'

From our "told you so, but wish I didn't have to" department: Last time Reserve Bank Governor Alan Bollocks hiked interest rates I asked Reserve Bank supporters: "Does anyone else wonder at the sanity of strangling the backbone of our economy -- producers and exporters -- in order to deal to 'the profligate household sector'? Is that sane?"

Lots of people said lots of things in lots of places about how producer and exporters just had to be strangled in order to save us all from the inflation monster... now we're starting to see Alan Bollock's strangling taking effect -- not on inflation, but on producers and exporters.
HERALD: Jobs lost as high dollar hits exporters
The high New Zealand dollar has claimed the jobs of 177 workers after three exporters said they could no longer compete against cheaper overseas competitors. Companies in Auckland and Christchurch yesterday announced layoffs as the high dollar made them unable to foot it on international markets...
But 'too fast growth causes inflation' you say? Interest rates just had to be hiked, you say? Well, no it doesn't. And no they don't. Alan Bollocks -- strangling producers and exporters for no reason other than economic ignorance.

Links: Jobs lost as high dollar hits exporters - Herald
Denying prosperity by misunderstanding inflation - Not PC
Too-fast growth is bad. Right? - Not PC

1 comment:

Anonymous said...

Yes the high dollar doesn't help, but exporters are not blameless either. It is absurd for any manufacturer in NZ to try to compete with China on price. Yet that is what so many are doing and falling by the wayside as a result. Instead they should aim for the top end of the market making high value high profit goods. Try getting that message across to footwear clothing and furniture manufacturers who still believe that selling goods as cheaply as possible is where it is at.