Sunday, April 29, 2007

Time to wake up. A storm is a'coming, and smoke and mirrors ain't gonna save us.

"A rising tide will lift all boats," said a euphoric Helen Clark before the last election, promising a steak on every plate through the beneficence of Labour rule. "A rising tide will lift all boats"? But it hasn't, has it.

Not every boat has been lifted.
  • Not the 300,000 still on welfare after two-and-a-half terms of Labour rule.
  • Not ratepayers, suffering under year-on-year exponential increases in the depth to which petty councillors raid their assets.
  • Not taxpayers, suffering under the two-dozen (and still counting) new taxes -- taxes brought in by a Government who had pledged in 1999 to add no new taxes -- and feeling the effects of a spending binge that's achieved nothing except rampant stagflation.
  • Not would-be first home-owners, priced out of the market by a perfect storm of regulatory restrictions on land supply, and by exponentially increased costs of land and building and interest rates.
  • Not ever-extended borrowers enduring mortagee sales (which doubled in number last year) as those hugely inflated interest rates bite.
  • Not producers, suffering under those hugely inflated interest rates.
  • Not exporters, suffering under exchange rates artificially inflated by Alan Bollard's economic ignorance.
  • Not creditors, attracted by all the extra credit in a marketplace awash with investors cashing in on Bollard's rates, credit piling up in more and more malinvestments just waiting to be washed away in the next storm.
  • Not the many young New Zealanders who emerge from the state's factory schools functionally illiterate and unable to function in a high-skills economy.
In fact, barely anyone except those who've taken advantage of the bumbling, for after seven-and-a-half years of Labour Government our national boat has been sinking beneath the OECD waves -- as their report this week shows anyone who bothers to read it, we are enmired near the bottom of the list of 30 countries measured, and going backwards. Real per-capita income here is diving like a sick man with a snorkel (see picture at right). All the great successes trumpeted out of Helengrad have been smoke and mirrors -- the unemployment figures massaged by the enormous increases in sickness and disability beneficiaries; the growth figures massaged by the government's multi-billion dollar spending binge, and by the massive credit attracted by inflated interest rates and the Reserve Bank's printing presses; the 'prosperity' financed on that credit and on the back of a housing 'boom' that's really an over-inflated regulatory bust.

Except for recipients of taxpayers' largesse -- those unemployed 'artists'; Welfare for Families Beneficiaries; subsidised film-makers -- and all those productive New Zealanders who've done well despite the regulatory and fiscal shackles placed upon them, we are as becalmed as those boats in Valencia were earlier last week.

The tide is high, and the world is moving on -- but it's leaving us behind. A world of economic golden weather has been pissed away in a sodden downpour of politically correct government, and the OECD has just shown us all the tab.

It's high time to wake up.

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7 Comments:

Blogger Greg Bourke said...

Good new photo.

Here's a thought, heard Chris Moller (NZRU CEO) mention on NatRad that all their cash reserves are offshore. ALL of their 70 million. ALL. None of it was in Provincial Finance. None in 42below. None in Charlies. None in Digitech. None in W(almart)arehouse and other famous NZ innovators.

There's a lesson there if you'll take it. If a parochial Kiwi organisation doesn't invest in NZ and leave its cash open to xrate risk and a drippy sharemarket then why should you?
...

4/29/2007 12:48:00 pm  
Blogger Matt B said...

Or, Greg, you could exercise your ability to make your own decisions and do that instead.

What NZRFU does with their money is really nobody's business. Almost by definition, I'd have more confidence if anyone's investment decisions when grounded in performance rather than parochialism.

4/29/2007 04:01:00 pm  
Blogger Greg Bourke said...

Please engage humour and irony!!

The NZRU yarn (Friday pm Panel Discussion on National Radio) was just a timely, vaugely ironic, anecdote to back up the tone of PC's post and, indeed, my personal financial position. I think I can mention the sensible investment style of the NZRU without a discourse on the CAPM and linear algebra!?

Goodness sake, as if anyone takes major financial advice from NatRad Panel. Give a reader of this blog a little credit!

4/29/2007 10:13:00 pm  
Blogger Greg Bourke said...

PC's is spot on. Indeed, this singular topic gets me so angry and most of my rancour is directed at teh politicians sitting fat and cosy on tax funded sinecures.
Trev Mallard makes me laugh with his talk of "innovation and design". How long has that spiel lasted?

"Design" in the 'real world' is not putting three circles on a T-shirt and charging thrice the price. Neither is "innovation" being an advert 'creative' who dreams up Tui bilboards.

We are going down becasue we are dummies. Dumb! We are not good enough at math, physics and the hard sciences, which are what drives real modern economies. 2cents.

4/29/2007 10:31:00 pm  
Anonymous Anonymous said...

I wouldn't get too excited about the 'storm'. A correction in the housing market, if coming, is likely to be no more than 10% and will mainly impact developers, traders and the over geared.

Re exporters - I love offshoring to low cost countries - as should all capitalists.Yes, NZ manufacturing will be hollowed out, but it's not just the kiwi making it hard. Australia has the same thing going on. Globalisation is good.

4/30/2007 01:57:00 pm  
Blogger PC said...

Anonymous, you won't find me complaining about globalisation, and that's not what I'm doing. What I'm attacking is not globalisation but statism, specifically the statism that fucks with the economy and people's property.

5/01/2007 11:13:00 am  
Anonymous Anonymous said...

I know you're not against globalisation. People are starting to realise that we cannot have true globalisation with sovereign borders as they are now. The immigration bogeyman is being trotted out with increasing fervour worldwide -- Utah republicans said the other day that immigrants are "Satan's minions [who] want to eliminate national borders and do away with sovereignty."

I have long said that immigration is the litmus test for those who claim to be libertarians, or objectivists for that matter. We are now starting to see who is a 'liberal' and who is a garden variety conservative.

The issue of globalisation and immigration is an issue I would like to see get some MSM air.

5/02/2007 09:15:00 am  

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