tag:blogger.com,1999:blog-3753486518085091399.post6910836908182250190..comments2024-03-29T00:44:42.046+13:00Comments on Bowalley Road: Parker's Stance on QE Bodes Ill for Labour-Green CoalitionChris Trotterhttp://www.blogger.com/profile/09081613281183460899noreply@blogger.comBlogger33125tag:blogger.com,1999:blog-3753486518085091399.post-23142755633231809762012-10-22T13:09:04.414+13:002012-10-22T13:09:04.414+13:00I understand we still need to borrow about a billi...<i>I understand we still need to borrow about a billion dollars a month…</i><br /><br />A government never needs to borrow money as it can print it. Does this devalue the currency? Nope, as long as taxes are increased to cover it. Also, our currency is high because of our, comparatively, high interest rates and not because of good money management or a strong economy.<br /><br />BTW, the private banks print money all the time and that doesn't seem to be causing a decrease in the value of money nor destroying our reputation.<br /><br /><i>Keynesianism works - but only if you apply it at both ends of the cycle. Spending dollars you don't have when times are hard, taxing the excess of dollars in citizens' hands when times are good.</i><br />No, actually, it doesn't. This is due to the Keynesian propensity of borrowing the money from capitalists at interest and often from the private banks which printed it. The money the government uses the government should print with no interest and it should be used to do what the society requires. In other words, the money the government prints should be backed by the resources of the country and that includes the skills of it's people.<br /><br /><i>Printing money to build houses for low income kiwis may be one case where QE is worth it.<br /><br />One problem is, once the taboo on this is broken, governments in the Muldoon tradition could really go to town on it.</i><br />Just so long as there's strict rules the government has to keep to then it shouldn't be a problem.<br /><br /><i>Personally I think the big barrier to the things we definitely need (like improved public transport, diversification of industry, significant investment in public housing and state employer of last resort policy to end intergenerational and long term unemployment) is because of the antipathy to Chinese investment.</i><br />Foreign investment (ownership) is bad for both the economy and the society as it sets up a permanent unending payment for a single purchase.<br /><br /><i>already pay a hell of a lot of tax in NZ ie more than a big chunk or a good slice. Push them too hard and/or throw that money away on wasteful follys, and they might just say see you later (and take their factories and jobs and skills with them)</i><br />That'd be great. Get rid of the greedy arseholes. We have more than enough skills to replace them.<br /><br /><i>We need to get people into work and in turn, the Govt. gets more revenue from taxes.</i><br />We look at taxes the wrong way as we look at them as a means for the government to raise revenue forgetting that the government commands the entire resource base. As such, it doesn't need to raise revenue and taxes are there to constrain inflation.<br /><br /><i>Money from Q.E. will go straight onto the stock market, it will not create any jobs, it will not create any domestic demand and it will not produce any growth.</i><br />That depends entirely upon <a href="http://thestandard.org.nz/not-more-of-the-same/" rel="nofollow">how the QE is done.</a><br /><br />Draco TBhttps://www.blogger.com/profile/06765506075559300004noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-69599383731230418462012-10-16T15:54:55.328+13:002012-10-16T15:54:55.328+13:00I should hope soI should hope soVictornoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-1624160070515309122012-10-16T15:23:53.795+13:002012-10-16T15:23:53.795+13:00Enough, Victor! I surrender!
Who knew we had an e...Enough, Victor! I surrender!<br /><br />Who knew we had an expert in 19th Century French history in our midst?<br /><br />Louis XVIII is duly acquitted of being the target of Talleyrand's disdainful wit.Chris Trotterhttps://www.blogger.com/profile/09081613281183460899noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-74479125014134104952012-10-16T15:04:14.584+13:002012-10-16T15:04:14.584+13:00Memory is fallible and my previous post was wrong ...Memory is fallible and my previous post was wrong in suggesting Louis XVIII ruled without the Chamber for about five years. He and Richelieu managed to clobber together a more moderate majority in 1816, albeit that the Ultras were still a force to be reckoned with and, of course, became dominant when Charles X came to the throne.<br /><br />At stake were real material interests, including the security of titles to property acquired during the Revolutionary and Napoleonic periods. <br /><br />As to Talleyrand, he, more than any other single individual, was responsible for Louis mounting the throne of his ancestors in 1814 and then remounting it in 1815. <br />Metternich and the Tsar had other plans.Victornoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-21605074091453185912012-10-16T13:19:06.606+13:002012-10-16T13:19:06.606+13:00"Nice try"!!!!!
'THEY', Chris, ..."Nice try"!!!!!<br /><br />'THEY', Chris, refers to Artois, to all the Counts, Marquises etc. who flocked back to France in 1814 and 1815 and to other members of the Ultra-Royalist group, who dominated the parliamentary life of the restored Bourbon monarchy and were famously (or infamously)'plus royalistes que le roi'. <br /><br />Amongst their chief objects of hatred were those they viewed as class traitors (e.g. Talleyrand) and the arriviste warrior aristocracy created by Napoleon, whose services Louis (quite sensibly) wished to retain. For his part, Talleyrand cordially hated them back. Hence his celebrated epithet.<br /><br />Poor old Louis seems to have ascended the throne with a plethora of good intentions about binding up the wounds of France. One of his earliest acts was to grant his people a Charter which enshrined many of the great reforms of 1789-91, albeit as the gift of the king and not as achievements of the sovereign people.<br /><br />However, a severely restricted franchise produced an unexpected Ultra majority in the Chamber. Louis and his chief minster , the Duc de Richelieu, therefore ruled without the Chamber for about five years before succumbing to the reactionary tide. <br /><br />Actually, in a sense, even the Ultras had learned something since 1789. However, the value of what they had learned is debatable. <br /><br />They didn't wholly want to restore the autocratic, bureaucratised, centralising, modernising, Gallican monarchy of the eighteenth century. <br /><br />Instead, many of them were influenced by the culturally prevalent tides of Romantic Medievalism. They yearned for a more prominent role for the aristocracy and back country gentry than they had normally enjoyed under the Bourbon crown. And they wanted an Ultramontane church, at war with the perceived apostasy of the age. <br /><br />In other words, they'd learned a load of sonorous, a-historical rubbish whilst trailing round as impecunious guests of their fellow aristos, elswhere in Europe.<br /><br />All of this, of course, only increased the disdain with which Talleyrand, that quintessential child of the Age or Reason, viewed them.<br /><br />Meanwhile, you're quite right about the Green's proposals re: Christchurch. <br /><br />Both Keynesians and Friedmanites believe in QE in certain circumstances. But, as Joe Stiglitz keeps pointing out, it's who the money goes to that makes the difference.<br /><br />Shovelling it into banks when they are, quite sensibly, reluctant to lend, achieves very little apart from the prevention of total collapse.<br /><br />In contrast, shovelling it into banks that are too willing to lend takes you rapidly back to the brink of disaster.<br /><br />You need to find a mechanism for channeling dosh to people who will use it for purposes that are productive, socially benign and stimulative.<br /><br />Whilst not perfect, Dr Norman's proposal is a very worthwhile contribution to the debate over our economy.<br /><br />Increasingly, the Greens seem to show more genuine "bottom" than any other party. No wonder the jibes of "funny money" have been coming so thick and fast. Is this the sound of cages being rattled?Victornoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-45073775303006604942012-10-16T10:37:52.675+13:002012-10-16T10:37:52.675+13:00Nice try, Victor. But the quote attributed to Tall...Nice try, Victor. But the quote attributed to Talleyrand castigates the Bourbons as a dynasty and so includes the first of the restored Bourbons, Louis XVIII, as well as his even more reactionary successor, Charles X.<br /><br />This is readily confirmed by the quotation itself, which uses the plural rather than the singular pronoun to describe the intransigence of Bourbon monarchs.<br /><br />"THEY have learned nothing and forgotten nothing."Chris Trotterhttps://www.blogger.com/profile/09081613281183460899noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-16635694423497861252012-10-16T10:26:18.002+13:002012-10-16T10:26:18.002+13:00To: Anonymous@12:20AM
No. The QE that the Greens ...To: Anonymous@12:20AM<br /><br />No. The QE that the Greens are proposing involves purchasing Christchurch Recovery Bonds and acquiring overseas assets for the Disaster Relief Fund - up to $2 billion. <br /><br />This expansion of the money supply should result in a lower exchange rate which, in turn, should boost exports and preserve jobs.<br /><br />Explain to us where the NZ sharemarket comes into this picture?Chris Trotterhttps://www.blogger.com/profile/09081613281183460899noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-83701731586930429722012-10-16T00:20:34.093+13:002012-10-16T00:20:34.093+13:00Q.E. is not mildly inflationary Keynsianism, Chris...Q.E. is not mildly inflationary Keynsianism, Chris.<br /><br />Q.E. is the last resort of orthodox reserve banks when they have run out of other orthodox solutions to a credit crisis.<br /><br />Money from Q.E. will go straight onto the stock market, it will not create any jobs, it will not create any domestic demand and it will not produce any growth.<br /><br />It is just short term stock market gain for a longer level of debt repayment. <br /><br />An inflationary Keynsian solution would use inflation to reduce the debt repayments. <br />Q.E. just lengthens the repayment term in order to stimulate short term market profits. <br /><br />not at all the same thing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-89055105856834548292012-10-15T16:57:12.292+13:002012-10-15T16:57:12.292+13:00Kat
Thanks for making pedantry respectable on th...Kat <br /><br />Thanks for making pedantry respectable on this thread.<br /><br />You've emboldened me to point out to Chris that it was not the moderate and sensible Louis XVIII who was said to have "learned nothing and forgotten nothing" from the French Revolution, but his brother/successor, Charles X (formerly the Count of Artois), and his "Ultra" supporters. <br /><br />In all other respects, Chris, you are on the nail with this one.<br /><br />Your follow up post of October 12, 2012 3:59 PM is a masterpiece of economic history condensed. <br /><br />Where, as a country, do we go from here?Victornoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-55472712467754641312012-10-15T10:43:40.420+13:002012-10-15T10:43:40.420+13:00Ok, Chris. We will have to agree to disagree. I ju...Ok, Chris. We will have to agree to disagree. I just don't believe you can hold Lange or Douglas to account for the National govt mismanagement and Muldoon's erratic macroeconomic policies up until 1984. What happened after that with the Labour govt, sure, and I have some credit to Muldoon for his later public opposition to Ruth Richardson's policies and the elite of the round table.<br /><br />One other point, it may just be a case of semantics, however 'learning' ones history is quite different to 'knowing' ones history.Katnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-62177132890042465222012-10-14T23:31:47.217+13:002012-10-14T23:31:47.217+13:00Quantative easing may seem risky and unnecessary n...Quantative easing may seem risky and unnecessary now but the global financal crisis may be hitting us later than others. Our biggest export markets in Australia and China have had a pretty good crisis so far. But they do not look so rosy now. <br /><br />If they go down then we go down. Then we will be looking at every possible support. <br /><br />I like the Greens idea of directly supporting the economy using monetary policy rather than the UK/ USA style quantative easing which has helped the financial industry more than the rest of the economy. <br /><br />I agree with all the criticism about neoliberalism, it is a simplistic fairy tale of the good private sector overcoming evil governments. But not all fairy tales are true. The mess we are in globally certainly proves it. <br /><br />P.S I like Steve Keen analysis of the causes of the financial crisis and it is the finance sector 'printing money' not the government that is the root cause. He is worth a google for anyone interested. Brendonnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-53710315877812356352012-10-14T16:03:03.536+13:002012-10-14T16:03:03.536+13:00Of course I do, Jigsaw. He was reluctant to carry ...Of course I do, Jigsaw. He was reluctant to carry out Lange's stated preference for a 20 percent devaluation - urging him to save the taxpayers of NZ nearly three-quarters of a billion dollars in the form of an utterly undeserved gift to currency speculators.<br /><br />He was over-ruled and that was that. He didn't alert the troops stationed at Trentham or send Skyhawks to bomb Lange's Wellington flat.<br /><br />The myth-making is all on the Right. You cling to the creation myth of a Muldoonist gotterdammerung out of which Lange and Douglas bore us to safety.<br /><br />The reality is very different. Muldoon's wage and price freeze had brought inflation down to 4 percent. Under Douglas it would soar to 14 percent and more. The unemployed had PEP schemes at award wages. Lange's Government abolished them. New Zealand still owned over half of its own financial sector. Douglas & Richardson sold us to the Aussies.<br /><br />The list could be extended for some time - but you get the idea.Chris Trotterhttps://www.blogger.com/profile/09081613281183460899noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-86288368266200455452012-10-14T14:25:54.645+13:002012-10-14T14:25:54.645+13:00I continue to be amazed that the left still blames...I continue to be amazed that the left still blames Roger Douglas the guy with (at least some of) the solutions and not the man who caused the problems Robert Muldoon-were you not around at the time?<br /> Don't you recall how reluctant Muldoon was to hand over power? Re touching history is one thing-rewriting it, quite another.Jigsawhttps://www.blogger.com/profile/13906156865367357834noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-56812437115298209482012-10-14T10:27:56.672+13:002012-10-14T10:27:56.672+13:00No, Kat, there was no "rumour". Roger Do...No, Kat, there was no "rumour". Roger Douglas "inadvertently" left a strategy paper behind at an election meeting in which the 20 percent devaluation was clearly signaled.<br /><br />The Reserve Bank advised a devaluation only at the point where the corporate sector's deliberate with-holding of overseas currency in anticipation of devaluation, coupled with a run on the NZ dollar, had thrown the NZ economy into a severe (albeit temporary) crisis.<br /><br />Muldoon pleaded with Lange not to give in to the speculators - to no avail.<br /><br />Labour's first act was to give these "patriots" a $NZ700 million windfall.<br /><br />When Parliament's Finance Select Committee, chaired by Jim Anderton, launched an investigation into the devaluation crisis, Lange and Douglas ordered it shut down.<br /><br />Learn your history, Kat, or you'll end up repeating it.Chris Trotterhttps://www.blogger.com/profile/09081613281183460899noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-38121881740901916692012-10-13T23:58:36.474+13:002012-10-13T23:58:36.474+13:00Yes, Chris, there was a 'media' rumour tha...Yes, Chris, there was a 'media' rumour that Labour may devalue if they won the election however, my recollection of the events were that the Reserve Bank had advised Muldoon to devalue, which Muldoon refused to do, and that was prior to the snap election announcement. The run on the dollar then ensued driven by currency speculators gambling on a devaluation. Nothing Mr Key was involved in of course.<br /><br />I may be wrong, time can test the memory, at times.Katnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-82900837708181115232012-10-13T23:02:02.747+13:002012-10-13T23:02:02.747+13:00No, Kat, what nearly bankrupted the country was Ro...No, Kat, what nearly bankrupted the country was Roger Douglas's "accidental" release of Labour's plans to devalue the currency by 20 percent.<br /><br />Those holding US Dollars, UK Pounds and Japanese Yen held off exchanging them for NZ Dollars until the devaluation was complete and netted themselves approximately $NZ700 million in windfall profits.<br /><br />That's how Labour began in 1984 - and that is how it went on.<br /><br />The neoliberal ideology which underpinned the Fourth Labour Government must be thrown overboard, but it looks as though it will not be Mr Parker who does it.Chris Trotterhttps://www.blogger.com/profile/09081613281183460899noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-76665454084175720822012-10-13T21:10:24.512+13:002012-10-13T21:10:24.512+13:00Labour has completely lost the plot.
It will not e...Labour has completely lost the plot.<br />It will not even engage in debate.<br /><br />Parker, English. and Treasury are united (fruitcakes).peterpeasanthttps://www.blogger.com/profile/07258344040688251441noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-73605661824870843802012-10-13T20:57:46.705+13:002012-10-13T20:57:46.705+13:00http://kjt-kt.blogspot.co.nz/2012/10/printing-mone...http://kjt-kt.blogspot.co.nz/2012/10/printing-money-banking-part-two.html<br /><br />Borrowing money, "printed money" from foreign banks, and paying 14 billion extra a year for the privilege, is sensible?<br /><br />http://kjt-kt.blogspot.co.nz/2...<br />Do I detect a bit of self interest here?<br /><br /><br />In fact "printing money" worked very effectively for NZ in the 30's. So well it was copied by other countries.<br />All the howls about Zimbabwe and the Weimer<br />republic forget that their productive sectors were first destroyed,<br />before they started printing money, When there was nothing to buy with<br />it.<br /><br />Not a lot different from Nationals present efforts!<br /><br />A lot different from lending to ourselves to invest in paying our<br />under-utilised and capable construction industry to rebuild<br />Christchurch.<br />Vital infrastructure which will return the investment many times in future.<br /><br />Also we did exactly the same thing from 1935 until the 60?s. Called the<br />Development finance corporation for a long time.<br />Worked well for us. Got us out of the depression before the US and UK for a start.<br />We are still using a lot of those assets. Apart from the ones our idiot<br />Governments sold, so someone else could profit from them.KjThttps://www.blogger.com/profile/13583435107822078614noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-70410621720953040372012-10-13T18:31:42.905+13:002012-10-13T18:31:42.905+13:00Patricia, may I remind you that the govt controls ...Patricia, may I remind you that the govt controls you are seeking are what nearly bankrupted this country by the PM Robert Muldoon. What David Parker is suggesting is that the Reserve Bank is given a fresh mandate and a new set of targets.Katnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-55190154239034613472012-10-13T16:50:24.315+13:002012-10-13T16:50:24.315+13:00Damn that dictation software. Should be wild gener...Damn that dictation software. Should be wild generalisations. Damn my editing too :-).guerilla surgeonnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-49237799809492955732012-10-13T11:57:56.283+13:002012-10-13T11:57:56.283+13:00Well Parker's comments are, for me, the last s...Well Parker's comments are, for me, the last straw. I will cancel my membership. As far as I can see Labour is now just National Lite. It probably has been since 1984 but I had hope. The World is in an impossible financial situation caused by the very same financial ideology Parker says he will not change. Oh yes he will tinker at the edges which will have no effect but he wants to continue allowing an unelected civil servant to run the Country. Why have a central Government? We could go back to provincial governments except Christchurch's building is is somewhat disarray at the moment.Patriciahttps://www.blogger.com/profile/01509686441858091630noreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-22704929389149515682012-10-13T09:18:33.979+13:002012-10-13T09:18:33.979+13:00"might just say see you later "
If we&#..."might just say see you later "<br /><br />If we're all going to throw around while generations perhaps I could insinuate one or two of my own. For one thing, there are already doing that. As soon as a business get big enough, the headquarters shift to Australia and the manufacturing shifts to China. If it's not just purchased outright by a large multinational. Secondly, this seems to be a lot of crap being spoken lately about international competition for people with skills. Which seems to operate mostly on the level of bosses. I get a bit sick of their wages being compared to the US and mine being compared to India. I think we could probably import a lot of administrators and business people from various countries who might be willing to work for a lot less than what people are paid here. Japanese don't pay their chief executives as much as we do necessarily, the difference between the worker's wages and their wages isn't nearly as great as it is almost anywhere else. The Germans similar. There must be plenty of entrepreneurial people in poorer countries that will be happy to come here and work for less. So let the buggers go, and import some managerial slave labour for a change.guerilla surgeonnoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-16267063769210815382012-10-12T21:17:22.619+13:002012-10-12T21:17:22.619+13:00Parker and Cunliffe are Roger accolites so it'...Parker and Cunliffe are Roger accolites so it's not surprising they would make such comments.<br />QE in a form paid for the State houses built throughout the late 40's, 50's and 60's. It paid for the passes Lewis and Haast etc. If it is done rightly, it can ease the exchange rate as well as create work in our depressed economy. We need to get people into work and in turn, the Govt. gets more revenue from taxes. Its a winner in both directions. Relying on Private Enterprise to cure un-employment is a serious mistake, it is in the best interests of business to keep people out of work all the time; keeps wages down and profits up.Sparkynoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-60482784956439281062012-10-12T21:15:48.781+13:002012-10-12T21:15:48.781+13:00Well Chris, you have given the voters a choice on ...Well Chris, you have given the voters a choice on the left: a Labour left coalition or a Green left coalition. If that is the option I go with the Labour led coalition. Your article explains precisely why that is the better outcome! No doubt Russell Norman would have something useful to contribute as a Minister, but as Prime Minister (which in effect you are proposing), well watch the flood of people to Aus.waynenoreply@blogger.comtag:blogger.com,1999:blog-3753486518085091399.post-77276876261669312542012-10-12T20:57:41.189+13:002012-10-12T20:57:41.189+13:00andremahon123 - I would say the super rich and the...andremahon123 - I would say the super rich and the average rich (pretty ill-defined terms) already pay a hell of a lot of tax in NZ ie more than a big chunk or a good slice. Push them too hard and/or throw that money away on wasteful follys, and they might just say see you later (and take their factories and jobs and skills with them)OneTracknoreply@blogger.com