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Tuesday, November 02, 2010

It's the economy stupid

Stats point to stalled economy - Labour
The first decrease in the number of businesses in New Zealand for nine years is a powerful indicator that the economy has stalled, Labour says.

Statistics released today said the provisional total number of businesses in February was 470,000, down 1.7 per cent from 2009 and the first decrease recorded over the past nine years.

The largest drop, 2800, was in the construction industry.

"National has just presided over the first year since 2001 in which business closures have exceeded business start-ups," said Labour's finance spokesman David Cunliffe.

"National's rebalancing of the economy is all about tipping it over the edge into double-dip recession."

What’s that I can hear? Why it’s the Economy stalling. Brothers and sisters I don’t wish to sound cynical, but is John Key really doing anything for the economy about to collapse other than tell us he’s positive that Summer will make it all better?

Last week it was revealed that the first decrease in the number of businesses in NZ in nine years had occurred. To use an economic phrase, the neoliberal freemarket model has been well truly rooted and other than bennie bashing, union bashing, tax cuts for the rich and rivers of corporate welfare, John Key’s all out of ideas.

Sadly his hard right stormtroopers are not. In the intellectual vacuum I like to refer to as John Key’s leadership, his Milton Friedman admiration glee club inner caucus have set in place all the mechanisms required to privatize the continental shelf of NZ. The slashing of public services when desperate NZers need them most is more sadist than masochist even though the long term consequence of their actions is corporate coercion over the State.

The 2011 election will be fought on economic ideology, which will be difficult as every news reporter in NZ is banned from ever using the words economic ideology on TV for fear that concepts more complex than eating bugs guts while bathed in maggots will be too difficult for the most educated generation in human history .

As Gordon Campbell points out. the economy is in freefall...

On the Government’s bogus victory over price increases
Out in the real world, it is hard to see why anyone would want to take credit for the current state of the economy. Economic growth is barely registering a pulse, and unemployment is forecast to stay above 5% for the foreseeable. Government policy is failing young people in particular – with 45% of those out of work being aged between 15 and 24 and unemployment among the young is around 18% overall. Faced with his dismal situation, most politicians would be hiding their head in their hands. Not Finance Minister Bill English, though. There was English yesterday, pointing to an inflation rate of 1.1% – the lowest annual rate since 2004 – as a sign of the good times under a National government.

In fact, English looked more like Wile E Coyote pedaling out into mid-air, and saying ‘So far, so good’ just before he plummets to the canyon floor. Not only did that 1.4 % omit the full impact of the GST rise – while reflecting how retailers deferred price rises until they could be passed under cover of the GST hike – the average CPI figure was an illusion that obscured far more than it revealed. Yes, the prices of non-essentials (eg major electronic appliances) have been slashed to lure in consumers, but meanwhile, the price of essentials rose at a rate well above the average. Here for instance, is the actual release from the Statistics Department on the CPI, and it showed vegetable prices – for instance – rising by nearly 20%, and power prices rising at more than double the inflation rate.

...with the economy in meltdown and the only answer National having is privatization, John Key will have to go early to the polls next year to fight the next election on the 2011 budget, National wants the election in deepest darkest winter and will use ACT's impending implosion as the excuse to go early, blaming small parties along the way and hoping for a swing against MMP so they can cement their hold on power.

The danger for National is that John Key told people they would be better off from the Tax cuts funded by a rise in GST, they are not and John Key's brand of vacant aspiration politics can't work in a recession and attempting to implement free market deregulation low tax policies to counter a global economic meltdown caused by free market deregulation low tax policies is the very definition of farce and with Labour offering a real economic alternative to Nationl's bankrupt mix of corporate welfare and neoliberal pretensions, voters for the first time in 25 years have a choice.


At 2/11/10 6:14 pm, Anonymous kingi said...

I find your likening of Bill English to Wile E Coyote quite offensive. I happen to admire Wile E Coyote very much.

At 3/11/10 9:30 pm, Anonymous Anonymous said...

kia ora Kingi! :)


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