Rogernomics

Do you know who this man is?

Do you know who this man is?

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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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Labour MPs “not fit for purpose” – Trotter

Chris Trotter laments the situation the Labour party finds itself in.

He has decided that the current Labour MPs are “not fit for purpose”.

Which is a fine sentiment, but misses the point that if he finds them unfit for purpose then there is little reason at all to vote for them, or for the Labour party.

Has Labour ever been so hopelessly lost? Has the path to electoral victory ever been so obscured? Starting from where they are now, how can they possibly get to where they need to be on?20 September?

What is it? What is making it so hard for David Cunliffe and his party to get any sort of political traction?

The answer lies in Labour?s caucus. Not only is a majority of the caucus profoundly unhappy with Cunliffe as their leader, it is also profoundly at odds with the Labour Party members who elected him. Labour?s MPs are torn between their desire to occupy the Treasury benches ? and thus be free of the Party?s influence ? and the realisation that even becoming the government would only postpone the confrontation with the party that Cunliffe?s election made inevitable.

Expressing the problem with maximum brutality: most of Labour?s present crop of MPs are not fit for purpose. A handful are holdovers from the Rogernomics Era ? and thus reminders of the very worst period in Labour?s history. More are the products of Helen Clark?s personal intervention in the candidate selection process; followers of a career-path that began in the student unions (or MFAT) and ended on the Prime Minister?s floor of the Beehive. The remainder are what emerges from the deeply compromised horse-trading that assembles Labour?s Party List ? burnt out trade unionists and identity politicians.

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Echoes from the UK that give insight on New Zealand

People are sitting and watching the debacle that is David Cunliffe unfold before their eyes. They wonder at how the Labour party could have got it so wrong, after the heady days of Helen Clark’s power.

Part of the problem lies with that legacy of Helen Clark. She turned the party into a cult of personality and then surrounded herself with people who lacked ability, colour or ideas…lest they rise up and challenge her. So focussed was she on neutralising threats from within that she didn’t see John Key sneak up on her.

The marks of Helen still pervade the party, and now they seek to purge anyone from the centre right in the party. This of course has already been foreshadowed in the UK where Labour suffers the same issues.

What is it with British political parties? Is there some masochistic tendency ? a perverse self-destruct mechanism ? which invariably makes them denounce the very thing that has provided them with unprecedented success? You must accept that there is an uncanny parallel between the Conservative modernisers? renunciation of Thatcherism after a single electoral defeat which followed on 18 unbroken years of power, and the Labour party?s rejection of its New Labour incarnation after an unprecedented three terms in office.

Somehow the idea became received wisdom that winning three times in a row ? and then losing ? was a kind of moral catastrophe rather than being a simple (indeed, healthy) consequence of democratic life. Since when have politicians assumed that when they lose an election it must be a sign that everything they have been saying and doing is totally unworthy and repulsive to the people ? who had, until that point, been voting for them consistently for nearly two decades?

But here we are again. Labour is roughly where the Tory party was around 2000: in full-on self-flagellation mode ? renouncing the version of itself which had been its most stupendously effective election-winning formula in post-war history. Blairism has become the precise analogue of Thatcherism ? the evil spectre that must be expunged before the party can regain trust and credibility. In the case of Tony Blair, there is a convenient ? and fatally confused ? issue which can be used to justify his disgrace. His foreign military ventures and his association with the Bush ?war on terror? have given licence to his perennial enemies within Labour to cast his whole political programme into disrepute.

That he transformed the Labour message, so as to make it not only electorally attractive but consistent with modern British social attitudes, is deftly buried by the Neanderthal Left, which always hated his reforms and his attempts to break the party?s dependence on the trade unions.

This brings us to Ed Miliband, who was put into the leadership by those unions precisely for the purpose of driving out the last traces of the Blair heresy. So the lesson that Blairism learnt from Thatcherism ? that contemporary British politics is now all about individual aspiration, self-determination and genuine fairness (which is to say, you get out of life pretty much what you put in), rather than the old Left dogmas of class hatred, passivity and state-run collectivism ? must now be expunged from Labour?s message. ?? Read more »

DPB versus Assets Sales ? Economic Game Changers

A Guest Post by The Owl.

I certainly don’t agree with everything he says, but since he went to the bother of submitting it then far be it from me to judge.

DPB versus Assets Sales ? Economic Game Changers

I can?t start to understand how my grandparents grew up through two World Wars, the Great Depression and a period of social change in the world during the 50?s 60?s and 70?s but what I do know is that my understanding of politics and the economy started when I left school and at the age of 23 and survived through the share market crash of the 80?s.

There has been two major periods of economic downturns in NZ and the world during my short but exciting life and both come after two dictatorial leadership reigns. Harsh comments I know but Robert Muldoon and Helen Clark were clearly strong leaders who fought hard for their economic beliefs.

In a weird but unusual way the country celebrated the change of Rogernomics (Labour) and Ruth Richardson (National) period of economic change ? both cold, hard but ground breaking.

These periods of economic change did put the country in great stead and while Labour pushed through assets sales in a major way ? their decisions were right. Ruth Richardson followed up by then adjusting the economy with fewer assets.

We celebrated as a country as the government was effectively debt free.

Then we had the nine years of the ?nanny state? which effectively took all the cash we had and gave it to the ?perceived poor?.? Chuck in a housing boom, a sad few days in the nation?s history with the Christchurch earthquake and we are now all struggling to see the light. They have called it the ?credit crunch? or the ?the great recession?.

The country needs a way forward. Don?t listen to the Greens who want to plant trees to pay for economic policies and hope that the spiders of this world will spin gold in their webs or the Union laden Labour Party who have a hung up on anyone who earns more than them or are deprived of same sex marriages, listen to your heart and head.

The Maoris? claim to the water is right and just. Fortunately I think I know enough of the details to side with the tribunal however timing is everything and in this case the timing is poor.

The NZ economy is in the poo! It will be in the poo for years to come and we need game changing policies as with the Rogernomics and the Ruth Richardson periods.

Assets sales are a mixed model sale ? one that everyone can live with ? for the sake of future generations the country NEEDS a big cash injection and URGENTLY.

The cash injection is to pay for the social welfare policies thrust upon us by Labour, Unions and Helen Clark. This is the same attitude we need now that the Lange government needed to do to pay for the Muldoon Think Big projects.

My calculations are that we need a quick $5 Billion. We have two very simple choices ? partial assets sales (as the Government has always said it was partial ? so I don?t know where the perception of full assets sales has come from) or the policy I would prefer:

From 2014 there is no new Domestic Purpose Benefit (DPB). I would spend 1% of that existing budget on sex education and free contraception.

The stopping of DPB would generate $20 Billion in 4 years ? we can keep the assets.

Here is the Owl?s game changing economic and social policies for 2014.

  1. Halt all assets sales
  2. From 2014 there will be no DPB ? focus towards education and social responsibility of the young
  3. Cancel 7 day a week trading ? impact and betterment on family units and social activities (e.g. sports clubs which do a great and unrecognized social welfare service would increase dramatically). Tourism will not die and the industry would move towards promoting our outdoor lifestyle ? why travel 10,000 miles to get drunk and buy the same label clothes you can get at home ? this logic has never been understood by me.
  4. Just absolutely crash down on crime and gangs ? build 10 more prisons ? remember 99% of NZ’ers doesn?t do crime yet we spend so much money on protecting ourselves. Prisons create jobs ? so should have a huge economic and social benefit.
  5. If you are unemployed then you must be available for work ? Work brokers at WINZ do a fantastic job finding work for the unemployed.
  6. Student Loans ? pay them back ? end of subject

Let?s start living again ? there is a new generation of children growing up now who don?t know how to socially interact ? it is called the ?Me? generation ? we need the ?us? generation to rear its head.

The ?Us? generation needs $5 Billion urgently

Coddington flays academics

Deborah Coddington has had a couple of good weeks. Today she flays a couple of pinko academic rent a quote types:

Why bother with inquiries into disasters when, say noted economists Brian Easton and Geoff Bertram, everything is Roger Douglas’ fault: “Pike River, leaky homes, finance companies – costly in both money and lives – is seen as the belated price New Zealand is paying for chucking away its rulebooks in the late 1980s.”

Easton blames Rogernomics for Pike River’s 29 miner deaths and, furthermore, suicides by owners of leaky homes.

Why? Because Sir Roger’s Government was “too hands-off” with regulations in these areas, Easton said last week.

Bertram reckons New Zealand is “a laughing stock in many overseas jurisdictions. They look at our regulatory arrangements and roll their eyes.”

So that’s why immigration officials wipe away tears of mirth and pick themselves up off the floor every time I enter a foreign country and hand over my passport for stamping.

Complete bollocks. Deborah gets stuck in.

But Easton and Bertram are quite right. All this choice and freedom is killing us. We should repair to Nanny Muldoon’s policies with haste.

By law, only four trading banks were permitted. They opened at 10am and closed at 3pm. There were no ATM machines. If you wanted cash for the weekend, you withdrew money on Friday before the bank closed. Interest was set on savings accounts at 3 per cent.

To send money overseas you bought money orders from the Post Office. Above a certain amount “about $5 a day” you applied to the Reserve Bank. Same for international magazines – you filled out a form, sent it to the Reserve Bank, and got permission from Nanny to send funds offshore.

No lives must be risked in the spending of this money. And marginal tax rates will go back to 66 per cent, kicking in at $30,000.

People forget those days of state control over almost every aspect of our lives. People also forget that Labour increased its vote from 1984 to 1987 because they loved the freedom that Rogernomics brought to the country. The sad fact is though that Labour helped re-write history, along with plonkers like Brian Easton and Geoff Bertram.

Rogernomics should be blamed for the 25 drivers killed while using their cellphones. These are weapons of mass destruction. Douglas liberated telecommunications.

In 1985 the state-owned Post Office stockpiled 2000 spare desks and chairs, and a two-year supply of dial phones nobody wanted.

Before you got a new phone you had to prove the one you had was beyond repair – but that was okay because nobody died and the phones didn’t leak.

When the state owned our assets, the Post Office landed 13,000 faulty telephones, and a further $30 million of PABX equipment stayed in storage until someone felt like fixing the software. The numbers of people on waiting lists for telecommunications services nearly doubled in the three years to 1985, from 8000 to 15,000. But nobody overseas laughed at us.

This is what happens when government departments run things, we wold do well to remember those days. This is what Labour acolytes now pine for. Their MPs even post videos about it.

How comforting were the arms of Nanny, pre-1984, when she decided what we could and couldn’t buy. Government chose who could have import licences, and which local manufacturers should be protected.

It doesn’t matter if New Zealand families can’t afford cheap clothes and shoes for their children. That’s not the point. It’s Nanny’s job – as these two erudite economists will happily point out – to protect the privileged, not the consumers who want to shop around, or go online, for cheaper goods.

Competition hurts producers, manufacturers, banks, supermarkets – goodness, even those selling milk and vegetables. Here, let Nanny put a plaster on it.

Thank you Deborah Coddington for reminding us what Labour would take us back to.

 

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