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Wednesday, October 19, 2011

John Key's aspirational economic poverty

Politicians in the gun as crisis drags on
Voters will rise up against short-sighted decision-makers, writes Andrew Gawith, a director of Gareth Morgan Investments.

The global financial crisis is proving worryingly difficult to shrug off. That partly reflects the nature of the crisis and partly political dysfunction that continues to dog effective responses.

The crisis was triggered by a monumental build-up of debt, helped along by a fair bit of financial chicanery and the bursting of the housing bubble.

In November 2008, a few months into the crisis, a group of IMF economists (Claessons, Kose and Terrones) concluded from an analysis of previous financial crises that they tend to be long-lasting - much longer than the accompanying recessions which also tend to be relatively long and deep. Moreover, house price collapses lead to more costly recessions and financial crises are often global or synchronised.

As I have been saying since the 2008 collapse, we are suffering a unique crises of Capitalism akin to the 1929 stock market collapse that will herald the same social and political stresses brought about by the Great Depression.

The low tax, deregulation, Milton Friedman free market dogma has failed by collapsing in upon itself through venal corporate greed that has created an event horizon of debt.

The resentment at how the free market pirates of Wall Street destroyed the global economy with their immoral corporate greed has spawned a global occupation movement that will only build as the economy goes into further meltdown.

This Governments response to implement more low tax, deregulation, Milton Friedman free market dogma to counter the crises caused by the very same low tax, deregulation, Milton Friedman free market dogma is nothing short of an ideological fart looking for a match.

How privatizing our assets, borrowing to give rich people a tax cut and corporate bail out after corporate bail out is supposed to make the type of structural changes in the economy required to weather this recession is anyones guess, and seeing as Key never faces much media scrutiny at the best of times, the rest of the electorate sure as hell isn't that much more the wiser either.

Apparently smiling and waving works over hard question answering every time.

We don't want to borrow more, we need to generate more income. A Capital Gains Tax, a Financial Transaction Tax, the need to rebalance the tax burden onto those who have built up so much wealth and power in the last 30 years is what is needed, not more wealth class protection that the current Government seems so hell bent on.

And it is a 'class war' to parrot the Republican Party, John Key is utterly disconnected from the poverty many NZers face. Few of them were speculating on the Wall St stock exchange, yet they are being asked to sacrifice and do with less...

Charities' food handouts at record after Govt cuts
The Government has slashed the number of food grants to needy families by 20 per cent, driving record numbers to seek food parcels from charities instead.

Work and Income NZ data supplied to the Council of Christian Social Services shows that taxpayer-funded food grants almost doubled from 71,189 in the June quarter of 2008 to 133,153 in the same quarter last year as families reeled from the impact of the global financial crisis.

But grants have been cut back to just 106,767 in the June quarter this year after the rules changed in March to make people complete budgeting activities, and show they have taken steps to increase their income or reduce their costs, before they can get more than two food grants a year.

...and what about Key's aspirational promise to lift those in poverty out of poverty, and thuse decreasing the total number in poverty, well, John admits now that hasn't really happened...

Key admits underclass still growing
Prime Minister John Key has acknowledged that the "growing underclass" he promised to tackle in 2008 has probably grown further - rather than decreased - during his first term in government.

...for a Prime Minister who said people who need food handouts are responsible for the position they find themselves in (not his mismanagement of the economy or borrowing for tax cuts) and who told Church leaders that if he stopped the benefit 'bugger all would die', his disconnect from the grim reality of many in the electorate of poverty may well bite him in the bum come November 26th.

With ACT in meltdown in Epsom and Peter Dunne looking likely to be toppled in Ohariu, the Maori Party may well be the only possible coalition partner the Nats can find, that is if they survive the attack by MANA.

The mainstream media punditry and their brainfart landline polls have already written Goff off, so he enters the TV debates as the under dog. The performance of his life and his mastery of policy could surprise the electorate.

The voice of the poor may well be heard this election, much to the blindsided mainstream medias surprise.



At 19/10/11 11:17 am, Blogger chinook said...

"let them eat cake" - history shows us what that attitude can lead to. The rich and super rich need to step out of their bubble world and accept that their free ride on the backs of the poor & middle classes MUST come to an end. Warren Buffet has made a move - more people like him need to do the same

At 19/10/11 1:49 pm, Blogger Nitrium said...

Bailouts and tax cuts are NOT, I repeat NOT, in any any way shape or form part of a free market economy! You really need to look up what a free market is supposed to be. Bad loans should be allowed to fail, with borrowers AND lenders going bankrupt. The reason we are in this mess has absolutely nothing to do with a failure of free markets, and everything to do with blatant FRAUD carried out by banksters with full government complicity. Communism/Marxism/Socialism offer nothing to address this (why is Socialist Europe having the EXACT same problems as the US?). John Key and his ilk are oligarchs in service of what can only be described as a kleptocracy. Unfortunately, they are not alone.

At 19/10/11 1:53 pm, Blogger Tim said...

The electorate is still in a stupor, but I wonder JUST how close to the wind the politicians are sailing - I don't think they realise they actually are - and if and when they ever do here - they have this over-confident attitude that makes them believe they'll somehow be shielded.

I watched the last Citizen A (online). Max Taibbi et al...
Do you actually think a JonKey or a Spud...what's his name Minister of Finance and all things expert in an economy.. are aware? I think not.
BUT... will they wonder why they become "victims" when it all turns to shit.
NO - not until the're strung up in some revlutionary backlash that ONLY EVER HAPPENS ELSEWHERE

This state apparatus is so over-confident, so embouldened by repressive legislation that is intent on controlling the rising masses.

Jesus H CHrist....have they not learnt ANYTHING from history?

Obviously not.

Ah...yea well...we now know what the opposistion is that is confronting us.
Yea....sure you do when the most simplest of opposition could actually destroy your frikken infrastructure in totallity with a very simple act - what's more - they could claim a total innocence.
I've no doubt any regime would be anxious to label any culprit a terrorist. (Some consultant expert tho' has convinced then otherwise - probably at $ great cost).
I'll remain mum - except to say that all the consultants that have collected thier overinflated fees, all the corporatised departmental "Heads" - (talking Max Headroom ones at that), are so frikken out of touch that they deserve any surprises in the future.
But Rest assured...I'm taking a lay down and a cuppa.

I just can't believe the naiivety...but in 3 or 4 years, I'll not be surprised if I have to walk past some greedy asshole rotting on a lampost - actually - make that 5 -6 years.

Smile and wave...smile and wave...smile and wave.

At 19/10/11 11:06 pm, Blogger Canichett said...

I agree Bomber. There could well be some big surprises this election. Yet, every time John Key messes up, National rise higher in the polls. I've come to the conclusion that Nzers are confused and think they are watching a real life version of the Brit show "Big Brother"! And kiwis being so nice, we just don't want to vote them off!

At 20/10/11 11:05 am, Blogger Fern said...

@Canichett's comment "Kiwis being so nice" - someone said to me that John Key can't be all bad because he watches Coro St! I said, he only wants you to think he watches it, I don't suppose he actually does. She was surprised at my cynicism.


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