As a general rule of thumb, whenever someone offers you something for nothing they aren’t telling you the full story – and that is exactly what we have with the Greens stating the Reserve Bank should start rebuilding Christchurch themselves by printing money.
And Nolan concludes his lengthy piece thus:
Conclusion
To summarise I’m saying:
- We don’t need QE in NZ, as we have enough monetary stimulus (and if not we can cut interest rates further).
- What is being suggested isn’t even QE – its the monetization of government debt, effectively a inflation tax to pay for the rebuild in Canterbury.
- It is unlikely that such a tax is the “best” way of raising the revenue to rebuild Christchurch – which should be the primary question.
It's a lengthy but informative piece from Matt Nolan, and it can be read in its entirety here. It's well worth the investment of a few minutes of your Monday.
We wonder if Norman and his Green colleagues have actually considered the implications of what they are proposing (and according to Nolan, what they are misrepresenting), because there will be implications; there is nothing more certain than that.
17 comments:
Norman wanted to front the news and focus the discussion on National's appalling failure with our economy.
He has succeeded in both his aims. Three posts in succession from you, keeping Stock!
Norman wins, hands down.
Remember, explaining is losing as you so often point out.
If we create money here instead of borrowing it overseas, borrowing instead from ourselves as we ought to, we charge ourselves what interest we choose to charge and we pay it to ourselves as well. There is no requirement in fact, to charge interest on it at all as the effective ZIRP of the US, Japan and Eurozone demonstrates. Local money would not as a result, be scarce unless we play it the way the US has done, and use the created $$$ to prop up broken banks.
The US is a good example of what can go wrong if you leave the banksters in charge. It isn’t a good example of anything else and because it is the reserve currency it cannot ( if you read the bit from Triffin I linked to above ) ever break even. Not allowed to.
The Chinese control the value of their currency directly and it has been suppressed for yonks as a matter of policy. Can’t speak to the Aussies… but a country that produces a surplus has vastly different options to one that is perpetually in deficit… so they don’t need QE, they have to do something different to control it.
Go ahead and keep believing the Austrian mythology about fiat currencies and forget that what we all actually have are debt-based currencies issued and controlled by the banks.
Remember who Key used to work for. Ask yourself who he works for now, given his efforts and their results here.
Having to go to asset sales to manage the country’s economy is NOT a sign of competence.
Read all about it!
http://blog.greens.org.nz/2012/10/08/the-damaging-dollar-how-to-ease-exporters-and-save-jobs/
Russel Norman for Minister of Finance.
In a press release from Green Headquarters in Riverton, Mr Norman acknowledged the huge impact his appearance on Q&A has had.
I have taken the Green Party mainstream with my call for devaluing our dollar, Mr Norman said. My call for a NZ dollar devaluation by 15% is right in line with the quantative easing in the USA, Britain, and Australia. Where they go, we go. But our appeal has become broader than that. The last NZ Minister of Finance to devalue our dollar was Roger Douglas. He devalued by 20% in 1984. Before him, Robert Muldoon devalued by 10%. My pitch at 15% places us fairly in the middle of left wing and right wing monetary strategy looking backwards. Our Green Party now has widespread appeal right across Southland from Riverton to Invercargill. While our placard-making industry is at a standstill during school holidays, we expect support to mushroom, and new activist groups to sprout up as soon as schools return.
The Southland call for me to become Minister of Finance is in line with the huge support the Greens are experiencing on local blogs, and new names are appearing en masse on the blue blogs showing their support
for these older policies long since discarded as useless, but like the bicycle, we never forget how to ride them.
This old initiative shall be known as "The Norman Con Quest".
Nicely put, Norman C. I like to read the thoughts of someone with an agile mind, for a change.
Wallacetown, smack-dab in the middle of Green Country, is electric with excitement at your reference to their modest but rapidly greening town. A placard has been hastily painted in your honour.
Could we, they ask, prevail upon you to speak at their up-coming Garden circle meeting? You've a grasp of both language and politics that resonates with the thirsty-for-news Wallacetownians and I suspect you do it for love.
You've seen through Russel's cunning plot, that's certain, and have clearly a more powerful brain than his. We of the South suspect you must be the leader of a bigger political party than is Russel, for you to be so dismissive of his proposal. Can you reveal for us, which party that is? You've not conceded a single point that Russel has made regarding QE, so we of Wallace are entirely convinced that the Green leader's proposal has not one once of merit, and are now willing to back you at the next election, so wise you appear and so confident that National's fiscal management is state of the art and without fault.
There's just one thing we cannot fathom - why haven't you invoked the 'Zimbabwe' factor? It's de riguer for Righties to screech 'the sky is falling' whenever the Greens flex their froggy muscles.
Did you miss that?
"...so we of Wallace are entirely convinced that the Green leader's proposal has not one once of merit..."
I agree entirely Sir William.
It has more than one once of merit.
Once was when Roger Douglas did it.
Muldoon made it twice.
Chippie, why would John Key's previous employment history make a blind bit oif differnece to how he manages the NZ economy beyond making hime more aware that it is very difficult to go against the market?
Gosman
If the Prime Minister had been a teacher all his working life, do you think anyone from your śide might question his working history and whether that would influence his decision making and world view?
So it is with Key.
So do you think someone who was a teacher before becoming a Politician would be beholden to the Teaching profession?
Wasn't Jerry Brownlee a teacher at one stage? Do you think he is beholden to the teaching industry?
I think heś a dullard and a bully. Does that clarify the issue for you?
Itś not a matter of beholden, its about world view. Brownlee is treating Cantabrians like a class of 4th form wood work students. Key is treating his Prime Ministership like a game of roulette or a day at the trading desk.
If you think a politician's behaviour is somehow linked to their previous profession that would make things especially difficult for Labour given the number of ex-Unionists and Teachers in their ranks.
Why?
Brownlee was a teacher and you think he is a dullard and a bully.
Kinda answers your own question, Chippie.
Quite obviously you think someone's behaviour as a Politician cannot be divorced from their previous profession as evidenced by your views on Key and Brownlee. I am merely pointing out this would apply to a number of Labour members of parliament too.
If we do not do some QE then we face a flat line economy (government constrained by debt and budget pressure, and exporters facing marginal futures) – where new activity is based around the Christchurch rebuild. Many jobs could be lost in the meantime – with more workers moving to Oz.
And we face an overvalued dollar for years, before it is then corrected down in value when their QE ends. We are therefore faced with a future inflationary impact (rising cost of imports) by inaction now. That will mean a higher OCR then than optimum for growth in the future.
It’s better to go with the world flow and thus keep the dollar more stable over the longer term. This makes economic planning for business way easier – our yo yo dollar has been a major obstacle to investment.
Previous occupation can influence a politician's behaviour, I believe. Can, not does.
In Key's case, the influence of his money-trading training is heavily influencing his management of the country, to our detriment.
Brownlee is a bully in spite of his teaching years. Had he been a florist before becoming a politician, he'd still be a bully.
KS, this negative stuff is getting tiresome and depressing. Could you please post on some of the positive, encouraging things National has done?
Thanks a million.
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