The Group of 20 has congratulated itself on acting in concert to save the world. But will it?
At the heart of the crisis is a massive imbalance which at some point has to correct. The United States is afloat on Chinese savings.
It wants vast amounts more of others’ savings to stop the unemployment rout — now 8.5 per cent after the loss of 5.1 million jobs in 15 months — and help it spend more even though spending too much on borrowed money got it to where it, and we, are now.
The Royal Commission on Auckland Governance told us last week that “for the future” it “sees Auckland as a unique world city in the Pacific and that high liveability factors will remain Auckland’s most valued assets”. Really?
Royal commissioners have the power to compel evidence and their pronouncements have majestic status. Our accident compensation scheme came from a royal commission. So the Auckland commissioners are by appointment magisterially wise.
Deep in the recesses of New Zealand’s political history lies the A-plus-B theorem. United States Federal Reserve Board chair Ben Bernanke could be mistaken for a disciple.
The theorem was central to the social credit doctrine, which took hold in the 1930s depression among farmers hit hard by the slump and among some professionals not trained in economics. It postulated a gap between what people produced and what they could afford to buy which the central bank or the government should bridge by creating credit.
Cross-dressing: John Key told ACT’s conference on Saturday he was going to have a “red-tape bonfire”; Rodney Hide told the conference he was going to be “surgical and laser-like” in trimming regulations.
Isn’t it supposed to be other way round, Key cool and Hide hot?
Next time we have a big economic up, we might ask just how up it is or whether we are just on a party drug. If it is a party drug, an accident is waiting to happen.
The Accident Compensation Corporation (ACC) has been building funds to cover future liabilities. Those funds performed very well in the “golden years” of soaring sharemarkets. And the economic party times encouraged the government to expand the scheme’s cover and instruct the ACC board to be “fairer”, in part to eliminate injustices and in part to be more generous.
Two different bridges were under construction at the “job summit”. But where do they lead?
One bridge is a swingbridge, the sort boys used to learn in scouts. John Key has flung out guide ropes to where he thinks the other side is and is busily knotting up the V-shaped spacers which he hopes will steady our shaky passage across the valley of recession.
Wanganui Collegiate is not where you would normally go to find socialists. The offspring of the wealthy and snooty go there. But it seems it may have come time to socialise this very private college’s losses.
In the current economic climate, not enough people can, or wish to, afford to pay the fees for exclusivity — and, they would say, excellence — for their kids. The college has been exploring joining the state system.
John Key last week rejected the Greens call for a three-year freeze on MPs’ salaries because the anecdotal evidence he is getting suggests the recession will not go beyond this year. So they settled on one year.
But were the Greens right? There is some reason to think they were.
Jobs are disappearing fast in the big rich economies. International trade slowed abruptly in the December quarter and is expected to contract through this year. And trade is jobs. The International Labour Organisation says 50 million could go worldwide by end-2009.
Parliament reconvenes today. Top of the list is more tax law, to ease businesses’ cash flows in the hope they will lay off fewer staff. John Key needs more chalk-marks before his 100 days end.
His first 83 days have gone swimmingly. The golden weather runs on and on.
He has smiled and joked a lot and been friendly with a disparate range of people, many of them not normally enthusiasts for National leaders, some not for any major party leader. He is likeable, which is a change.
As John Key, Bill English and a swag of ministers head to two days of Treaty of Waitangi commemorations on Thursday they take with them heavy baggage: the constitution.
In the heady post-election days of mid-November they agreed with the Maori party to establish “no later than early 2010” “a group to consider constitutional issues, including Maori representation”. The Maori party is to be consulted on the group’s membership and the choice of chair and is to be represented on the group.