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Friday, February 18, 2011

John Key's vacant optimism will be National's downfall

John Key sells aspiration. He is the cheese on a stick slightly out of reach of the rat stuck in a mouse wheel. In 2008 he swept to power with promises of 'change' under the guise of Labour-lite policy that wouldn't spook any of the electorate horses.

In the three years since his election he has built a massive smile and wave political capital that gets amplified via the cheap deeply flawed political poll brainfarts which are breathlessly reported by a mainstream corporate media who have had their news rooms budget cut of critical analysis.

Key has achieved that vast smile and wave political capital by only doing two controversial things in 3 years, the first was his attempt to mine conservation land, the second was his lie about not raising GST.

That Coke and Pepsi sameness is now over and the Labour Party and National Party go into 2011 using the word Guyon Espiner, Mark Sainsbury, Duncan Garner and John Campbell are banned from ever using on Prime Time broadcasts - ideology.

In what I think is their largest political misstep since gaining office, Key announces his privatization of assets and goes 'all in' poker styles with his threat to resign if he loses. He is betting his smile and wave political capital and believes his aspiration is enough to win over the sleepy hobbits.

The problem (as I've been pointing out for the last two years) is of course his aspiration starts looking utterly disconnected from reality...

Key 'out of touch' over use of food banks
Prime Minister John Key reaffirmed his stance yesterday that people on the dole who opt to use food banks were failing to budget properly.

...while the Prime Minister has his arse massaged by the new car seat massages in his brand spanking new BMW, he is telling the poor that the reason they are going to food banks is because they choose poorly. It's not his Government's buggering up of the economy with a GST rise that was supposed to 'turbo charge' the economy, it's not his Government's fault for the double dip recession or 6.8% unemployment rate - it's all because the poor 'choose poorly'.

English admits 'double dip' possibility
Finance Minister Bill English yesterday conceded that the country could have entered a "double-dip" recession.

Retail sales shrink in December
New Zealand retail sales tumbled more than expected in the Christmas season as spending on groceries, hardware, gardening and building supplies tumbled.

Residential consents plummet to new monthly low
The construction industry has been thrown back into crisis with building consents for December plunging to record lows. Residential building consents took a surprise dive to a record low for December, with just 994 new homes and apartments approved for construction, according to Statistics New Zealand.

House prices hit low as prices snag
House prices are still falling, down 2.6 percent last month, and economists estimate that the volumes of sales dropped 8 percent to a record low

Key's vacant optimism starts looking like he is a bit touched and wide eyed. We'd all be optimistic if we had $40 million in the bank plus a Hawiiaan holiday mansion, but we don't and Key with comments like “If we cancelled welfare to 330,000 people currently on welfare, how many would starve to death? Bugger all” shows what a bubble world he lives in.

NZers don't need a Phd in Economics to know that despite how hard they work each year, they are in fact going backwards every week, this is because since 2008, the free market that Key puts so much faith in has suffered a crises of capitalism in the exact same way the 1929 stock market collapse caused a crises of capitalism. This recession hasn't bloody well finished, all that is passing over us right now is the eye of the recession hurricane, and in another couple of months the roar will begin and the other side of this hurricane recession will hit us. It wasn't until 1935/36 that the full social impact of the 1929 collapse was felt (and that required a second world war to give authority to the new economic hegemony), our collapse was 2007/2008, we are barely half way through this recession.

As Bernard Hickey points out...

The powers-that-be have been telling us for a couple of years that the economy needed to be transformed.

They spoke about a rebalancing from being a borrowing, importing and spending economy to a saving, producing and exporting economy.

The theory is we will start saving, the money will be invested in new export businesses, higher-wage jobs will be created and the economy will grow faster.

Nice theory, but is it happening and how much might it hurt before we get there?

Prime Minister John Key, Finance Minister Bill English and Reserve Bank Governor Alan Bollard have done the theory part. And they've painted a rosy picture of the future. Higher wages and a lower current-account deficit are, of course, a good thing.

But this transformation isn't going to happen without disruption, dislocation and pain.

Not much has been spoken about the pain or disruption.

John Key and his team are suffering from hubris, they have believed that they can win a FPP Government in a MMP election, they believe they can score an increase on their 2008 high tide mark of 44.93% and achieve an outright majority at 47% and are pushing privatization as hard as they can.

I say hubris because the weak arguments they have established to justify privatizing our assets using a debt bogeyman and 'mum and dad investors' as a guise are a joke when the reality from Treasury is that those shares will end up with overseas investors. The arguments Key is using are so weak they will be whipped way to nothing within 10months by critical analysis...

Asset sale arguments on wobbly ground
The Government's case for selling down its stakes in the three state-owned electricity generators, Air New Zealand and Solid Energy sits on a three-legged stool. On examination it is not particularly sturdy.

Election 2011: GO!
Yes, you can sell your house to pay off the mortgage, then you’ll be mortgage-free. But you’ll also be minus a house. In New Zealand’s case, we can sell our SOEs to pay off debt, which means we’d pay less interest to overseas creditors. But if we sold the SOEs to foreigners, then we’d just end up paying dividends to foreign investors instead.

John Key's 'Smile and Wave' on asset sales won't cut the mustard
Both the media and the public need to look deeper than the carefully constructed sound bites coming from the government on its asset sales plan, because the long term consequences for New Zealand are massive. In effect John Key has, by resurrecting a failed strategy from our past, signaled that he and his government have no idea how to grow the economy and demonstrated that National’s ideological views are driving its decisions without reference to the reality of the situation we find ourselves in.

...and in a story utterly missed by the mainstream media because they care more about entertainment than information, the international ratings agency Standard & Poor's publicly stated yesterday that the Government's boasts of public service lay offs weren't a solution because there is no fat left to trim in our public services...

However, unlike Key, Curry said Standard & Poor's did not regard the state sector as "bloated and inefficient".

"Generally, we look at the Government in New Zealand as being relatively small and compared to its peers it's quite efficient."

Furthermore, Curry said New Zealand was "relatively light" in government related entities.

He noted the Government's plans for partial asset sales, "but if you look at what's left, the sorts of government related businesses in New Zealand are quite minimal compared to a lot of other countries".

In 2008, tens of thousands of NZers who voted Labour in 2005, flocked to John Key because he chanted 'change' while no one really knew what that change meant. In 2011, you know what that 'change' now means, it means a political agenda for the wealthy at the cost of social equality.


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