NZ economic 'recovery' stalls - Christmas 2010 will be grim

For the love of god, THERE IS NO RECOVERY. This is 1932. In 1929 the stock market collapsed, it took until 1934 for the full impact to be felt in the economy, we are going through the exact same 'correction' now. Yesterdays shocking revelation that we didn't grow.7% and in fact almost stalled at .2% should be a hard kick in the head of reality, the 40 year bubble that has been allowed to grow in the deregulated financial market courtesy of Milton Friedmans neoliberal philosophy has popped. In the 1970s the real economy and the financial economy were valued evenly, now after 40 years of neoliberal deregulation and moving away from Keynesian economic theory, the real economy was valued at $8 trillion, the Financial economy was valued at $330 trillion. Apparently a growth uber alles economic approach fuelled by consumer consumption of plasma TVs, SUVs and cosmetic surgery all on the credit card wasn't sustainable.

Who woulda thunk it...

English says tax package will help after GDP shock
New Zealand's economic growth hit the brakes in the second quarter, falling short of expectations, and supporting the Reserve Bank's decision to pause in tightening interest rates. The kiwi dollar tumbled.

Gross domestic product expanded 0.2 per cent in the three months ended June 30, according to Statistics New Zealand, a quarter of the 0.8 per cent pace predicted by a Reuters survey of economists and the 0.9 per cent forecast from the Reserve Bank.

The neoliberal social reforms in the 1990's by National helped cripple the NZ labour market and doom it to the low wage economy we suffer from now, Labour's tenure in office replaced that poverty with debt and now we have debt AND poverty under National with less public services to cope with.

That all our financial guru's missed the fact we almost stalled rather than grew reminds us these people are out of their depth in terms of experience, NZ hasn't suffered a crises of capitalism since 1929, their models, their formulas, their tried and tested truths are all dead.

The basic dynamics of capitalism demand a 'correction' and when the real economy is valued at $8 trillion and the financial economy is valued at $330 trillion that 'correction' has a long way to go yet...

IMF fears 'social explosion' from world jobs crisis
America and Europe face the worst jobs crisis since the 1930s and risk "an explosion of social unrest" unless they tread carefully, the International Monetary Fund has warned.
"The labour market is in dire straits. The Great Recession has left behind a waste land of unemployment," said Dominique Strauss-Kahn, the IMF's chief, at an Oslo jobs summit with the International Labour Federation (ILO).

He said a double-dip recession remains unlikely but stressed that the world has not yet escaped a deeper social crisis. He called it a grave error to think the West was safe again after teetering so close to the abyss last year. "We are not safe," he said.

A joint IMF-ILO report said 30m jobs had been lost since the crisis, three quarters in richer economies. Global unemployment has reached 210m. "The Great Recession has left gaping wounds. High and long-lasting unemployment represents a risk to the stability of existing democracies," it said.

The poor are hurting, the TV keeps flashing them shiny things they can't buy and when the October 1st GST tax rise which is funding a tax cut that the Merchant Banker Prime Minister and his Sam Morgan mates will benefit most from come into effect that anger will only build as we see more desperately needed public services slashed.

This is 1932.