The Government’s Covid 19 response, mainly via Reserve Bank measures, has enabled a mind-boggling increase in inequality, according to influential financial commentator Bernard Hickey. Covid response has saved multiple lives, but its refusal to simultaneously address inequality via taxes raises uncomfortable questions about how a leftist government has overseen a once-in-a-generation shift in wealth
This government must demonstrate that it has the ability to lead the New Zealand economy where it has stated it wants it to go. It does not want more headlines like the average house in Auckland now being priced at $1 million.
New Zealand, like many other nations, is hurtling towards economic depression faster than Covid-19 spreads. “We are going to have a depression”. “This is like an asteroid hit the global economy”. “We can print our way of this”. Reflections on what lies ahead by Simon Louisson, Bernard Hickey and others.
Grant Robertson gets occasional criticism from the left but it is hard to fault him for his timing or his delivery in seeking to strengthen banking sector oversight.
The Reserve Bank just cut the OCR to a historic low of 2%. And no it’s not good (economic) news.
In The Herald Liam Dann asks – Did the Reserve Bank just give two fingers to the Prime Minister?. That would be a “yes”.
Guest Post: by Simon Louisson The news for cow cockies and the wider dairy industry just gets grimmer and grimmer, but relax everyone, […]
Simon Louisson on the Reserve Bank’s surprise announcement to reduce the official cash rate by 25 points.
Is Reserve Bank Governor Graeme Wheeler so concerned about the bogey of Auckland’s housing bubble that he is underestimating an equally nasty bogey – deflation? Deflation will certainly cure the problem of the property bubble, but that cure will be at a terrible cost.
John Key says New Zealand has options in the face of a share market meltdown and is not like Greece (well that’s a relief). Simon Louisson asks how real are John Key’s options? Thanks to this Government’s profligate past spending, including irresponsible tax cuts, our options have narrowed drastically.
Why is it left to the Reserve Bank to try and tackle the property bubble? It’s true – this government is recklessly complacent.
In the 1980s and early 90s the wisdom of the day dictated that our Kiwi banks were unsustainable. The buyout by Aussie banks saw huge profits and dividends head across the ditch. Russel Norman revealed an unhealthy relationship between our Reserve Bank and Westpac in an ongoing relationship that hadn’t been tendered for. This will now be tendered for and now there is a possibility for kiwi bank to win the tender. It’s about time we restored some real competition and brought more of our banking home!
The most important thing that needs to be learned is that money is nothing. Or, to be more precise, money is a tool that can be used to distribute the resources available to a society. In and of itself it has no value nor does it have a physical representation. Specifically, money is not a medium of exchange but a symbol of exchange and because of this the cost of money, usually presented as interest, should be zero.
There seems little prospect for better wage growth if the Reserve Bank is to be believed. There is a high risk that growth peaks this year without most people seeing any sign of it in their pay packets. People are being forced into the job market because stagnant wages mean more people have to work for the needs of their households. At the same time harsher rules on social welfare benefits and the low level of those benefits force people into a job market where as the bank says, there is ‘elevated unemployment’.
Yesterday the global dairy trade auction was held. Prices are still going down as they have since Feburary. The rate of decrease was less than previous drops. Only 1.1% rather than the colossal drop on April 1st. Also yesterday Graeme Wheeler, the governor of the Reserve Bank did a speech about dairy which has provided some useful reading this morning.
Rob Salmond at Polity just saved me from having to write something like this post explaining economic basics to Steven Joyce. Joyce demonstrated again why his tenure at MoBIE has been a failure for the overall economy. He fixates on one thing like the business selling milk powder to the exclusion of the overall picture. In part that is why we have neither expanding innovation or employment in our economy at present. He is a good tactical politician. But he is a fool on strategy.
The head of the reanimated corpse of Brash should now be spinning furiously along with those fools from ACT who are into simplicity (because they can’t handle the real world). However having the Reserve Bank looking the balance of payments is pretty good. It includes the exchange rate and the export economy. They’re effectively now concerned with the exterior economy with a enforced savings tool as well as the interest rates. The government becomes largely responsible for the structural rigidities we have built up in the internal economy. That is a pretty good mix. Might have to train the MPs a bit though.
Scott prays to the eternally independent Reserve Bank Governor.
Houses are seriously unaffordable, especially for first-time buyers. Labour’s policy settings will help first-time buyers, the Reserve Bank under the current government is proposing tougher requirements that will make matters worse for them. Parties of the Left need to take this issue and run hard!
Because things aren’t quite tough enough for first-time home buyers yet.
I came across this blog called Howdaft written by Darkhorse recently. It consists of five posts written in June. Five of the best pieces of leftwing economic thinking you’ll see anywhere – something we’ve been short on recently. I’ve tried to contact Darkhorse, but no luck. If you’re out there, drop us a line. In the mean time, here’s one of the posts.
House prices are a good indication of how the economy is going. They rose rapidly in the 2000s, stalled in 2007, plummeted in 2008, and made a slight recovery in 2009. Now they’re heading down again. The median house price is over 16% below the peak in late 2007 and I reckon they’ve got a long down way to go yet.
The Reserve Bank has left the Official Cash Rate unchanged; no-one expected a rate cut this early. It’s encouraging that Bollard has firmly […]
The economy is clearly slowing. Fundamentally, it remains strong with high employment, good wages rises, and strong prices for our exports but employment […]
