Economics

How about that manufacturing crisis?

Remember the manufacturing crisis that the Labour party and assorted other opposition parties promulgated?

You know that the sector that was in total decay and was going to fail dooming us to a life of low wage servitude and indentured labour?

Yeah…that crisis…remember?

Manufacturers are flat out and are crying out for more workers, with a survey showing employment activity at record levels.

The latest BNZ- Business NZ Performance of Manufacturing Index showed the sector was expanding at its fastest pace this year in October.

The seasonally adjusted PMI for October was 59.3, up 0.8 on September. An index above 50 indicates the sector is growing and below 50 it is shrinking.

The PMI employment index hit 57.5 points in October, the highest level on record since the survey began in 2002.

BNZ senior economist Doug Steel said the labour market was getting stronger with annual employment growth of 3.2 per cent and the unemployment rate falling in the year to September.

“Today’s PMI results suggest more improvement is likely in the final quarter of 2014.”   Read more »

Rodney Hide on the myth that is child poverty

Rodney Hide slays a few lefty myths…like the existence of child poverty in New Zealand.

Leftists and troughers are working overtime to make child poverty the new reason for funding them and centralising control.

Their catchcry is 250,000 children living in poverty. Their problem is if it were true we would notice.

We know what child poverty looks like. Many of us have witnessed it overseas. All of us have seen it on TV. We don’t see it in New Zealand.

We see children neglected, for sure, and that makes us both angry and sad. But we blame the parents, not poverty. And, if personal responsibility makes us squeamish, we blame welfare for three generations of dysfunctional and non-existent parenting. It’s been public policy for years to sponsor child neglect.

Nonetheless the “child poverty” drums are beating. I was made aware of just how hard by the NZ Initiative’s weekly newsletter reporting classic journalistic over-egging and UN propagandising.

The UN should but out, and start preparing a defence against their global warming scam.

Fairfax’s Stuff.co.nz reported last week that Unicef had “slammed progress” on child poverty in New Zealand.

Really? I didn’t believe it and on your behalf put myself through the agony of reading yet another UN rubbish report. It doesn’t “slam progress” on child poverty. That news was made up.

All the UN report says about New Zealand is that along with the UK and US, we were “moderately affected” by the “Great Recession,” that our big change in the family benefit system was in 2012 to institute a “higher rate but lower income ceiling” and we are reported as middling along in various charts supposedly showing us where we fit in the child poverty stakes.

The news report is puffed out with various child poverty warriors beating the drum and Prime Minister John Key having to defend the government’s record against the false accusation that the UN had “slammed progress.” Such is the state of news reporting in New Zealand today.

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More good news, NZ is third most prosperous country in the world

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While a bunch of professional protestors and losers were marching the streets protesting free trade, a new report was released that shows New Zealand is the third most prosperous nation on the planet.

New Zealand is the third most prosperous country to live in according to an international report.

The 2014 Legatum Prosperity Index ranks 142 nations on their “wealth and wellbeing” in eight categories, including health, education, safety and security, and economy.

Norway tops the list, followed by Switzerland. The lowest ranked was the Central African Republic.

New Zealand has jumped two places from last year’s index and has ranked first in the Personal Freedom sub-index.

The increase in places was put down to the result of a large increase in the country’s Social Capital score, the report’s publishers said.

In all eight categories, New Zealand scored in the top 20.

Our Australian neighbours also make the top 10, coming in seventh on the list and ranking first in education.

The United States is ranked 10th, and has a top score in the health sub-index.

The Legatum Prosperity Index was published by the London-based Legatum Institute, which provided research on different economic and social issues around the world.

None of those loser protestors have ever bothered to stop and wonder how it is NZ places so highly on a prosperity index…it is because of free trade, that allows out economy to grow and recover quicker than other economies.  Read more »

Socialist paradise has highest poverty rates

Everywhere around the world where socialists are in control there is increasing not decreasing poverty.

The basic tenet of socialism is that everyone gets to be miserable equally.

Even in wealthy countries the lure of socialism soon turns to disaster.

The State of California, formerly the most powerful economic force in the United States outperforming the economies of all but a very few countries in the world, is now the nation’s leader in a category that the formerly conservative, but now overwhelmingly progressively liberal and Democrat Party-controlled state, has to find embarrassing.

According to a new U.S. Census Bureau report, California, which has been losing jobs to lower taxed, less state regulated states, now sports the nation’s highest rate of poverty, with almost one quarter (23.4%) of its residents living in poverty.

A depressing 8.9 million of the progressive controlled Golden State’s 38 million population are living in poverty in the once prosperous formerly conservative-run state.

Democrat-controlled Washington, D.C. came in at 22.4%

A similar study by the Public Policy Institute of California affirmed the state’s poverty rate at 22%, with some of the highest rates being in the “progressive” San Francisco area.

Los Angeles, which has been hijacked by the far left, had the highest poverty rate in the state at 26.9%.

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Campaigners to raise the minimum wage busted advertising minimum wage jobs

Socialists are hypocrites the world over.

In New Zealand we have seen political parties on the left advocating for a living wage dreamed up by an Anglican vicar  from Lower Hutt. The Wellington City Council adopted this arbitrary wage and one of the councillors voting for it was busted paying his own staff minimum wage and refused to pay them the same wage he voted the council to pay their workers.

We saw Laila Harre advocating and pushing the living wage as well while in the employ of a fat German man who exploited his workers paying them far below the minimum wage,  for which there will be some fall out in due course via the Employment Court.

Now in Seattle a similar campaign has been busted for being sanctimonious hypocrites themselves.

The website of Seattle’s Freedom Socialist Party lists its most recent presidential candidate Stephen Durham’s political positions, which include the party’s effort to “raise the minimum wage to $20 an hour.” The group also avidly supported a successful push for a $15-per-hour minimum wage in Seattle, which passed this year. However, as Zenon Evans at Reason pointed out, that same political party just got caught posting a $13-per-hour job listing seeking a web content manager with web development skills.  Read more »

Should this man teach economics?

Peter Lyons teaches economics at Saint Peter’s College in Epsom and has written several economics texts.

His article for the Herald started like this

On Monday I made several thousand dollars on paper. The share prices of electricity companies surged following the election.

If I had sold my holdings I would pay no tax on my gains because I am an investor rather than a trader.

Meanwhile a worker who spent the day toiling in a warehouse or factory might earn $15 per hour and pay a marginal tax rate of 17.5 per cent. I am a capitalist with a small c.

…This is the growing divide that is playing out in New Zealand and other Western economies. Wealth generally creates more wealth. This is not an expression of middle-class guilt or angst. I am an economist and see the world in terms of efficiency and equity.

Now, I’m not an economics teacher, but that sets off red flags to me.   Read more »

Using tax cuts to revive the economy – How the poms see NZ

The opposition likes to talk down the economy and the government, yet New Zealand has recovered faster than the rest of the world from the global financial crisis, without the need to slash and burn.

Our economy is the envy of the world.

Even the Poms see that:

In New Zealand, John Key’s National Party romped home to victory on a platform of cutting taxes and balancing the budget, trouncing a Labour opposition that promised to put up taxes. Slashing the top rate of tax has revived the economy, and been rewarded with electoral success as well. True, there are lots of differences between New Zealand and this country. And yet the truth is, there are a fair few similarities as well – and if tax cuts can work there, they can work here.

For a small place a long way from anywhere, New Zealand has a fine history of leading the way with radical experiments in economics. While we were battling over Thatcherism, and the Americans were debating Reagan-omics, the Kiwis had “Rogernomics”, created by the Labour finance minister Roger Douglas. What had been a very 1970s, state-dominated mixed economy was swiftly transformed under Douglas into a laboratory for free market ideas. Financial markets were deregulated, the money supply was brought under tight control, the currency was floated, and industries were privatised. It was a mix that was to become orthodoxy by the 1990s, but Douglas was implementing it while our Labour Party was still planning to nationalise the top 100 companies.

Now it is doing it again – except this time without any encouragement from the US or the UK. Ever since the financial crash of 2008, even centre-Right governments have followed a very narrow path, buying into high taxes, and near-zero interest rates, and allowing budget deficits to balloon, even when financed by printed money, to keep the economy afloat. No one has strayed far from the orthodoxy. Except, that is, New Zealand.

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Is it really too hard for people to bother to feed their kids?

Last night in the debate David Cunliffe delivered a sermon about starving children and how was the messiah who could deliver them from starvation.

He ignored the fact that Labour was in government for 9 years before National’s 6 years and that it is doubtful that so-called child poverty is entirely the fault of National.

There is a letter to the editor in the Herald this morning that looks into these so-called starving children that their parents can’t afford to feed.

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Pimping the poor but not telling the truth

I see that the Fairfax newspaper North Shore Times is pimping the poor again.

Father of two ‘Ofa Ta’ufo’ou can’t spend more than $100 a week to feed his family.

That’s breakfast, lunch, dinner, snacks, drinks – the works. Any more and the Birkdale resident breaks the household budget.

The 43-year-old works “like an animal” for at least 40 hours a week and still struggles to make ends meet.

“At the moment I can’t afford to take my girls to the movies. So I have to ask: Who has failed my family? The system has.

“And I’m not the only one struggling. A lot of people in the community can’t function as a family because of their finances.”

The community worker says the problem is nationwide and something must be done.

“We need to push people in power to do something about the poverty in this country. People are working like animals just so they can pay the basics.”

Ta’ufo’ou said savings is not a word in his vocabulary.

“I work so hard and can’t save any of it. My wife and I budget every single cent.”

Their combined fortnightly income is $2000, nearly half of which is spent on rent.

Humans should live in dignity, he said.

“This is a human rights issue. Everyone deserves to live like a human instead of spending all their time worrying about money.”

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Herald editorial slams Labour’s health bribe

Another day, another poorly poorly designed policy although this one is just a straight out bribe to rip the votes away from Winston First.

People are seeing Labour’s cynical health policy for what it is, a bribe, with money the government doesn’t even have.

When policymakers in the modern world worry about the cost to future taxpayers of ageing populations, pensions are only part of it. Healthcare also contributes to the bill. As is always evident in doctors’ waiting rooms, older people are heavy users of health services. But it is not just their number that is increasing as the postwar baby boom moves into retirement; advances in the care and treatment of organ deterioration are rapidly extending the human lifespan. Welcome and wondrous as they are, the treatments come at ever increasing cost to a decreasing ratio of working taxpayers.

For that reason, younger voters ought to ask hard questions of the Labour Party’s election promise to provide free primary healthcare for everyone over 65. The first question to ask is, how many of them need it? Some with chronic conditions may struggle to afford a fee for the frequent visits they need, but these days general practices are funded for the needs of a range of enrolled patients and doctors can vary their charges. Labour proposes to replace doctors’ discretion with free consultations and medicines to the over-65s regardless of their ability to pay.

It would give the elderly the same benefits provided to children up to age 13 in this year’s Budget, which Labour endorses. It would add pregnant women to the free list too, for any medical attention they might need in addition to the prenatal care that is already free. Not all parents of children under 13, or expectant mothers, need these benefits either. Many can well afford to pay a fee. But at least a case can be made in generational equity for children and young parents. Not so, the older generation.

Labour is offering free doctors and medicines to a generation that grew up in a welfare state, attended university at a fraction of the cost faced by their children, bought houses at lower relative prices, had their top income tax rates reduced by half early in their working years and enjoyed galloping house price inflation in their peak earning period.

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