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1:36 pm, May 22nd, 2026 - 6 comments
Categories: 2026 oil crisis, act, benefits, Donald Trump, Economy, election 2026, employment, Iran, israel, jobs, labour, manufacturing, national, nz first, welfare -
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The coming oil shock is not just about oil. The future is baked in, and its not good. National’s backward-looking budget will make it much worse.
Whether or not Trump and Netanyahu start the bombing again, today’s state of the market report from Radio New Zealand headlines that the two-month effective closure of the Straits of Hormuz will affect us for two years, quoting the last quarterly survey report from Infometrics by Richard Brunsdon.
The body of the report is about the past: the kicker comes at the end of his comments where he starts looking ahead:
The impact of the Iran conflict started to be felt towards the end of the period.
Brunsdon said broader business and household confidence was dented as fuel costs rose and expectations for an economic recovery have been pushed out, once again.
Early signals suggested that higher prices for fuel were being paid for by reducing overall fuel use, and with reductions in spending on apparel and hospitality.
“Softness in construction and manufacturing continue to hold the economy back, with continued higher input costs like energy, restrained demand, and work ongoing to determine what the new normal looks like for these industries,” Brunsdon said. “These two industries have an outsized impact on the economy, being the second and third largest industries for employment.”
He said the big question for the economy would be how long the disruption lasted.
“If we take what’s happened so far with the Iran war and the oil price shock that’s come through, we expect that oil price shock will have reverberations for two years or more, because it takes time for it to flow through to products that use oil an transport, bringing goods to supermarkets, and then it keeps echoing through as it knocks up the prices of other things and then dampens demand for those things as well.”
The disruption is going to last for a long time. If TrumpYahu bombs Iran again, as some are expecting, the outcome will be certain depression instead of certain recession. Either way, the future for us is bleak. The Government’s austerity budget will only make things worse.
As Brunsdon says:
At a national level proposed public sector job cuts were not enough to change the direction of the economy but it would be different for Wellington.
What I want to know is what thinking is going on the Labour Party as to how they will support our communities in this certain future.
The guy in the picture is walking forwards, over the cliff.
He's the Tarot "Fool"; there are 2 ways to see him, doomed through his own recklessness, or blessed by whatever fortune his courage might reveal.
What matters most, is what lies below.
That binary can be extended into a triad. Quest as tertiary element in the set drives activism as process. The image shows a courtly young fool gaily gazing aloft, the next step into the void is pending (in the viewers' mind). Courtier clothing means those who interpret the fool as everyman are wrong. The game of readings was for those at court.
The kind of fool who enters politics with idealistic stance, before learning how to become adept at the game…
Neoliberal government will not react well or quickly enough to the coming crisis – that much can be taken as a given.
When the SHTF, as Richard Murphy points out for the UK, things are bound to get masty – which is all the more reason why we need to kick the Coalition of Cruelty out in November.
22 mins long.
Neoliberalism doesn't really care about the coming crash. When something goes wrong it just creates an opportunity for someone to come along and make money from dealing with the outcome, the disaster whatever. That is why nothing lasts long these days (eg I have a new looking fridge that is faulty, not really cheap boots that fell apart sitting in box before I wore them.) Now who's the clever fellow now; tweet
There is a piece from my favoured Flanders and Swann about the circular nature of business in not doing things well and effectively. 'The Gas Man Cometh'. https://www.youtube.com/watch?v=v1dvAxA9ib0
There's a whole framework for stepping out of the reactive neoliberal trap and instead organising society by taking crises into account and building a resilient society in response to that, instead of waiting for the next crisis to hit, reacting and trying to build back to prior normal until the next crisis.
In other words, our system is a big part of this problem, not just the crises.
If we had a nationalised power supply for instance, it would be easier to manage costs, transition to electric and make that transition resilient and sustainable instead of the overshoot, market led shitshow we have currently. We would become less dependent on oil and if we were smart about it we would drop our GHGs faster.
It’s a wicked problem indeed, which is not short of ‘answer & solutions’ from well- and not-so-well-meaning elements (humans and AI bots). If it were up to me, I’d introduce a short-term temporary tax-free threshold on PAYE even when this means increased borrowing – it’ll flow back to the government over time. This will achieve two goals. Firstly, it’ll give some relief to the less well-off. Secondly, and more importantly, it’s the kernel of a strong story on how Labour puts people first. While they’re at it, cull a few RONS in addition to that LNG terminal.