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Monday, January 10, 2011

We understand the economy Mr English, the question is do you?

English confident voters understand economy
There are two things Finance Minister Bill English dreads most happening this year. One is discovering that China has a credit and property bubble. The other fear is of a European banking meltdown.

As part of Audrey Young's growing list if uncritical interviews with high ranking National Party goons, we get this shocker with English, it's not the us needing to understand that the global economic crises is a crises of capitalism on par with the 1929 economic collapse, 'we' get that fine and dandy thanks Bill, the question is 'do you get the depth of the economic crises'? Because implementing Milton Friedman, neo-liberal, low tax, deregulation, free market dogma domestically to solve a global economic meltdown caused by the very same Milton Friedman, neo-liberal, low tax, deregulation, free market dogma is the very definition of you not getting the economy at all.

Years of global slump ahead - Mr Yen
In an era where forecasts by permabears have got ample attention and vindication, few are as disturbing as this: a world recession until 2018.

It comes from Eisuke Sakakibara, Japan's former top currency official, known as "Mr Yen" for his ability to move markets.

Because Tokyo's revolving-door politics often sends a new face to each Group of 20 meeting, he is one of the few Japanese constants in market circles. Sakakibara was a key player when Japan faced everything from the Asian crisis to Russia's default to the onset of deflation to a banking collapse that saw the demise of Yamaichi Securities.

So, when an economist as well known as Sakakibara says "the world is set for a long-term structural slump reminiscent of the 1870s", when average global annual growth was about 1 per cent, I can't help but listen.

The reason for the slowdown? Governments put fiscal austerity ahead of restoring stable growth.

Massive cuts to social welfare and austerity measures are the exact wrong position to be adopting and add to this the usual privatization agenda National always concoct to help their wealthy mates buy state assets and we have the exact wrong direction for the economy. What National are banking on is redneck hate to see them through as they start to punish the most vulnerable and weakest in society for a global economic crises the weakest and most vulnerable had no hand in making.

Personally I find it INCREDIBLE that Audrey Young gets an interview with the Finance Minister and doesn't ONCE question his dodgy deal with PEDA. I mean this is supposedly the Finance Minister telling NZers that we all know there isn't any money, and yet here he is trying to hand over $4.8 million in a dodgy deal.

Thank God for a compliant mainstream media, I'm surprised the Polls aren't 75% in favour of John Key with this kind of uncritical coverage, why bother with Crosby and Textor when the corporate media are so terribly willing?


At 10/1/11 1:35 pm, Blogger sdm said...

I am starting to think you are right bomber. Maybe we are in for a decade of the economy treading water.

Question though: Why is the Keynesian approach adopted by Obama made things worse?

" Unfortunately, Faber said, the next bubble is already here. This time it’s government spending and fiscal deficits that Faber thinks will double the government’s debt during the next six years or less.

“The U.S. government is largely deranged,” he said. “The private sector is the dynamic one, and that’s why I object tremendously against building up fiscal deficits because (they) shift economic activity into unproductive government instead of leaving it in the private sector.”

“The whole economic expansion driven by a bubble in America has been a total disaster and has shifted wealth from the ordinary people who work … to the Wall Street elite,” he said…“The Fed, in my opinion, has zilch idea about monetary policy,” Faber said."

At 10/1/11 11:16 pm, Blogger dave said...

The reason that Keynesianism has been a failure in the US is that it hasnt been tried. Even the most bizarre form of state spending Keynes suggested was building pyramids. The point being that this would put people to work and generate sufficient demand to encourage the employers to invest in production.
What Bernanke et al are doing is the opposite of this. They are giving tons of money to the banks who Keynes himself said would the problem. Failure to invest in production is what causes the crisis, giving tons of money to them so they can hoard it, pay big bonuses and buy up other banks, is nothing to do with Keynes. None of this money is being invested in production and jobs to create demand and stimulate production, but the opposite, its bailing out big business and paying for it with the future wages of workers.
It exposes completely the farce that capitalism is based on market forces and proves that state force is the only thing that keeps capitalism going.


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