Hello double dip, here comes the second stage of the W recession
Dow Jones down 514 points, Nasdaq down 136 points, VIX up 30%, S&P down 60 points, gold and oil prices in collapse - it's a bloodbath, a god damned bloodbath.
And it's just about on time. The second part of the W recession is now on and the crimes of corporate greed that destroyed the global economy in 2007-2008 due to the madness of neoliberal, low tax, deregulated Milton Friedman free market dogma need to be remembered when John Key attempts to implement the exact same failed ideology here in NZ.
Some middle class NZers are about to not feel middle class for the first time in their life, and for the poor, that massive $2 billion deficit that Bill English intends to make with massive cuts into welfare don't really suggest much of a solution when austerity clearly doesn't work...
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.
...the austerity measures being promoted by the right wing to justify deep cuts to social welfare and public services will only serve to drive the economy into deeper recession.
As the economy continues to collapse, the splintered political spectrum will need to capture the newly awakened sleepy hobbits who will be terribly unimpressed that they will be cutting back so that the wealthy elite of NZ (John Key included) can take more.
In the screams of anguish on talkback radio at how much we are borrowing, no mention of the tax cuts that National are funding or the fact that this GST tax rise to fund a tax cut for the wealthy was supposed to 'turbo charge' the economy but didn't. All John Key has as a solution is a vulgar economic Darwinism.
The splintering of the political spectrum will now be followed by furious voters demanding change as their standard of living suddenly implodes, this is why Labour's economic plan would make much more sense than National's free market worship at a time when the free market has been revealed for the corrupt corporate manipulation it really is.
Labour is fighting this election at the kitchen table where those NZers trying to make ends meet are doing their weekly budgets. Key want's to try and fight the election at the middle management water cooler with knowing nods about how the tough decisions to cut back on social welfare need to be made.
Sadly for John Key and his free marketeers, this is a crises OF Capitalism, and we're all Keynesians now.