About righteous little ‘Pricks’ and righteous big ‘Pricks’

Thank God that she made New Zealand small and economically insignificant. Therefore our Prime Minister responsible for our economic direction is only a righteous little Prick.
Remember some time back when John Key rubbished and demonised the Greens’ Russell Norman’s suggestion – to put it bluntly – print money instead of borrowing it from the banks as being cheaper and better for the struggling economy. In modern speak is is called quantitative easing. Everybody has been doing it, the US, UK, EU and all other leading economies sometimes dragged into it screaming. Even Switzerland not known for economic adventurism a couple of years back threatened to print as many franks as it would take to stop currency speculation hurting their economy. It did stop overnight with some speculators ending up with bloody noses.
Here however John Key killed any rational debate by just name calling Dr. Norman and the Greens as irresponsible economic lunatics. Who is the righteous little Prick then who knows better then the (mainstream) rest of the world.

The big contexts is of course austerity with New Zealand’s obsession with balancing the books at a time when the economy actually needed more spending. Thank God for the Christchurch earthquake where spending by the EQC and insurance companies carried us over the damage the government policy was doing to our fragile economy.

The damage of economic righteousness  is now becoming more and more apparent when you have a righteous big Prick, in this case Germany, doing the damage. As the Huffington Post on 13 October headlines: Germany’s Austerity Obsession Could Take Down The Global Economy. Lately it was mostly the Southern European countries suffering under German righteousness. However austerity fever — egged on by a now-discredited research report that claimed government debt is bad for economies — has been hurting economies around the world since the Great Recession.

When is New Zealand waking up to the fact that this government did and does a lot of damage. Instead we still hail the the little Prick as the great helmsman who steered us successfully through the troubled waters of the global economy.

We said our piece. Now go back to sleep again New Zealand.

 

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One Response to About righteous little ‘Pricks’ and righteous big ‘Pricks’

  1. Peter says:

    I believe that the views expresses in the “Prick” post should not go unchallenged.

    Take “quantitative easing”,
    as was proposed for New Zealand by the Green Party, and apparently endorsed by the blog. In the US and Britain quantitative easing was meant to prevent deflation, and was used in a very low interest regime – neither of these conditions apply to New Zealand. The aim was to pump liquidity into the banking system which then was meant to flow through to the business sector. As it happened, 90% of the new money instead went into loans to institutional investors which then leveraged their share purchases. (The need to now unwind these positions is the main cause for the present volatility in share markets, rather than “Germany wrecking the world economy”).

    Furthermore, the need to stimulate the economy does not exist in New Zealand. Our manufacturing sector has expanded for 25 months in row. We are ticking along nicely. Or labour pool is dried up, except for people who do not have the required skills, or are simply unemployable.

    Take “austerity”
    which the Huffington Post chastises, saying that Germany will cause the world economy to collapse. This is hysteria, pure and simple. Germany has the soundest economy in the EU. Countries that have lived beyond their means for decades now request that Germany does as they do. Even if Germany would borrow and spend more money on its infrastructure, the effect on its southern neighbors would be zilch. The only result would be that the spendthrifts would then claim Germany being the same as they are, and using that as an excuse to carry on as before.

    It is also noteworthy that, when the Euro was introduced, all countries agreed to a 3% limit on budget deficits. Yes, this benchmark was overstepped during the financial crisis, even by Germany, but that is no excuse to continue.

    Take government debt:
    The report saying that government deficits are bad for economies was indeed refuted but not to the extent that deficits are good for the economy. The consensus now is that a moderate debt is not hindering an economy but an excessive debt does. This is what the architects on of the Euro zone had in mind when they limited the allowable debt to 60% of GDP. Debts of 100% or more are definitely a millstone around the neck of countries who get themselves into that pickle.

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