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Monday, September 06, 2010

John Key's moral hazard didn't exist bailing out Mr Magoo but does exist bailing out 10 000 uninsured Christchurch quake survivors

Let's get this straight, $1.6 billion to bail out Mr Magoo was not a moral hazard even though once National included him in the guarantee scheme for political reasons, SCF went onto behave and lend in the exact manner people knowing they will be bailed out by the Government do.

THAT WASN'T A MORAL HAZARD, oh no, that was prudent arse kissing for the wealthy wankers who jumped in to milk this system for as much as they could, we had to bail out National's well connected money mates for the 'National Interest'. I'm not sure how propping up a mythical and romanticized vision of Mr Magoo that so many South Islanders tied themselves to for the sum of $1.6Billion helps the rest of NZ who are bleeding because of the global economic recession, but that's how this bullshit is being spun.

So what about the 10 000 Christchurch residents who are uninsured? What about them? Will we bail them out with the speed John Key bailed Mr Magoo out? Like hell he will, all of a sudden those 10 000 Christchurch residents are a 'MORAL HAZARD' - note, bailing John Key's wealthy chums out with $1.6billion wasn't a moral hazard, but helping the 10 000 uninsured residents from one of the worst earthquakes this country has seen in 80 years IS A MORAL HAZARD.

The unblinking manner Key used to just dump those 10 000 uninsured Christchurch quake survivors on The Nation and Q+A yesterday was jaw dropping in its audacity in the wake of the Mr Magoo bailout and gave a quick glimpse into his cold calculating mind, the sort of cold calculations I'm sure he used when making his fortune by betting against the NZ currency when he was a trader all those years ago.

Bailing out Mr Magoo - NO MORAL HAZARD! Bailing out the 10 000 uninsured Christchurch Quake survivors - MORAL HAZARD! Nice to see where Key's morality actually lies once all the smile and wave news puff pieces are stripped bare.


At 6/9/10 12:52 pm, Anonymous Kelly said...

Agreed Bomber, so rude and full of it. The general comment being thrown around on TV coverage of the quake regarding uninsured individuals is appalling then being chastised by the likes of Paul Henry and co is ridiculous. I asked my boyfriend this morning -is this an insurance frigging commercial rather than a news report. Bail them out John Key, you've said you've got loads in the coffers for e/quakes. A lot of these people are mums and dads too just maybe not SCF investors.

At 6/9/10 7:29 pm, Anonymous Anonymous said...

People who don't pay their insurance make me sick, just like people who don't pay their GST, Tax, etc...

If everyone paid up fairly those of us who do meet our responsiblities could pay a bit less.

If you can't afford to unsure it, you can't afford to have it.

How many times have we seen the same sob stories from those without insurance after these type of events ....

They go on holidays, buy new TV's, go down the pub ...... knowing if they will be bailed out.

Time for people to face the consequences of their choices.

At 6/9/10 8:25 pm, Anonymous Anonymous said...

Just like the finance people a troll...?!

At 6/9/10 10:00 pm, Anonymous Anonymous said...

Why should I go without a lot of things so I can pay my insurance (GST, Tax, Rates etc...) when other people don't bother then they get bailed out with honest peoples taxes.

Am I being honest and responsible or am I a sucker.

Do you respect people who pay their way or do you prefer those who opt out - god not only do I lose financially I don't even get respect for being honest, gee why bother, I really am a fool.

At 6/9/10 10:04 pm, Anonymous Susan said...

Just to be devil's advocate here, I don't think the two are really comparable because SCF did pay their insurance, they signed up and paid the fees for the guarantee scheme. The govt pretty much had to bail them out because they would have been contractually obliged to pay up anyway. Moral hazard is a serious problem and it should have been considered before including finance companies in the guarantee scheme, but as Offsetting Behaviour put it: "it was an election campaign and because nobody during an election campaign wanted to tell a now-bankrupt retiree that his choice to get an extra $40 a month in interest had consequences". As far as I am aware that was Michael Cullen's policy and nobody was really arguing against it, they are all responsible for the SCF bailout but it doesn't mean we should disregard the serious moral hazard problem by bailing out uninsured Cantabrians.

At 7/9/10 6:21 am, Blogger Bomber said...

I very much disagree with your argument Susan. What fees did SCF pay to be included in the scheme? None. They were included as part of Cullens guarantee scheme, against warnings that they shouldn't have been. Offsetting Behaviour has it 10000% wrong, the scheme was put in place in the 2008 crises because there was the immediate fear of banks collapsing, SCF was included in that when it shouldn't have been, using a retiree as the example is cute, but the real winners here were National's well connected investor mates, bailing out Mr Magoo to the tune of $1.6 billion when the majority of that risk debt occurred after SCF got the guarantee is Moral Hazard, allowing the 10 000 uninsured to rot in their own despair is an immoral hazard

At 7/9/10 7:17 pm, Anonymous Susan said...

did you even read my comment? Of course SCF or any finance company shouldn't have been included! I was under the impression that there was a fee for the coverage but I can't be bothered fact checking so I'll take your word for it that there wasn't. My point is that they did not have a choice whether or not to bail them out because they were obliged to pay anyway it is hardly a John Key conspiracy to give money to his mates, all of the politicians who did not stand up and say why the fuck are we covering finance companies is at fault and as far as I am aware that is all of them. And the reason none of them did is because the other would find some poor retiree and make them out as heartless.


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