The Dim-Post

March 18, 2013

The Rodney Hide history of modern New Zealand

Filed under: general idiocy — danylmc @ 8:06 am

Apparently we were once an egalitarian free-market state but the last few decades has seen a massive expansion of state control that crippled the economy and created a permanent underclass.

Does Rodney Hide believe this? He might – he seems intensely stupid. Or is this a tacit acknowledgement that implementing ACT’s policies during the 80’s, 90’s and – tepidly –  over the last four years has ruined our economy with devastating social costs and Hide feels the need to shift the blame? Either way, funny stuff.

97 Comments »

  1. i cant decide between stupid or decietfull – but either one automaticlly disqualifies hide from being taken seriously

    Comment by framu — March 18, 2013 @ 8:14 am

  2. Does Rodney Hide believe it?

    I think he sincerely believes it, which is a little terrifying.
    On the flip side I suspect not many people believe (in) Rodney Hide so his opinions likely have minimal effect.

    Comment by Gregor W — March 18, 2013 @ 9:25 am

  3. On the flip side I suspect not many people believe (in) Rodney Hide so his opinions likely have minimal effect.

    David Farrar copy-posted Hide’s “10 reasons” and followed them with the comment “A fair bit of truth there.” Sure, he included the weasel words “fair bit”, but stil … .

    Comment by Flashing Light — March 18, 2013 @ 9:30 am

  4. Funny except that it is in the mainstream media being absorbed into our national psyche, like so much of this economic radicalism. Unlike this blog.

    Comment by nigelsagentinthefield — March 18, 2013 @ 9:46 am

  5. What did Hide get wrong…? And when were we ever a Free market?

    Comment by James — March 18, 2013 @ 9:47 am

  6. Rodney sounds like he’s pinched some pages from someone else’s play book. Guess who said this?

    “I believe in equal opportunity for all, and in the State playing its part to ensure this. How people choose to use that opportunity is up to them. They have everything to gain.”

    ” I do not intend to blindly follow an ideological path without ever challenging the concept or considering its appropriateness in our unique New Zealand setting.”

    Comment by Scintilla — March 18, 2013 @ 10:07 am

  7. “What did Hide get wrong…?” – well… everything, as usual

    for example – the USA had its greatest increase in living standards under a managed economy (post ww2), and ever since the reagan years it (and pretty much the rest of the western economies) have been going downhill. Which is the opposite of Hides little melodrama

    Ok many factors at play there but you get my point

    Hide is arguing for an economic model that is channeling wealth into an elite, and using simplistic, idiotic slogans and strawmen to argue his position.

    I dont mind that i disagree with Hides assertions so much – but for someone in his position dont you think he should be capable of a much better argument?

    Comment by framu — March 18, 2013 @ 10:13 am

  8. The stunning thinking behind Act’s electoral success laid bare.

    Comment by Sacha — March 18, 2013 @ 10:24 am

  9. When has Hide ever shown evidence of integrity or honesty?

    Comment by herr doktor bimler — March 18, 2013 @ 11:24 am

  10. What did Hide get wrong…? And when were we ever a Free market?

    Categorically demonstrating that both Hide and James have had their irony glands surgically removed.

    Comment by Gregor W — March 18, 2013 @ 11:42 am

  11. My favourite bit was when he framed it in terms of helping the poor. The poor have done fantastically out of the pro market reforms of the 80s, obviously. Made out like bandits living on a subsistence wage.

    Comment by awbraae — March 18, 2013 @ 11:56 am

  12. What did Hide get wrong…? And when were we ever a Free market?

    What Hide got wrong is his failure to note that the problem he identifies (poverty in NZ) has grown worse during the time that the policies he advocates have been introduced (free-market deregulation and user-pays service provision). Thus, there is cause to doubt that the underlying claim “the problem would go away if only we became even more free-market deregulated and had even more user-pays service provision” is, in fact, true. In fact, you might think that the real-world evidence as provided to us by the Universe points to the opposite conclusion.

    Comment by Flashing Light — March 18, 2013 @ 12:00 pm

  13. Both ideas are nutty, that we were once paradise and that paradise has been “rooned”, as the Australians say, by the neoliberals or left wingers in thrall to political correctness (according to taste)

    Comment by Roger — March 18, 2013 @ 12:02 pm

  14. “implementing.. policies…has RUINED OUR ECONOMY.”

    Does Danyl believe this? He might – but hysteria is the stock in trade of the political pundit.

    Hyde lists out his concerns in a simple 10-point list, could Danyl refute/criticise each point in turn? Rather than create a strawman: I can’t see where Hyde says we used to be free-market. In fact, the tone of the piece seems to be “it was ever thus with governments”.

    Of course, I’m not surprised to see a lefty ignore concerns about the welfare trap. “We intended good with these programmes, so will not brook criticism”.

    Comment by Clunking Fist — March 18, 2013 @ 12:59 pm

  15. Ah the ‘prove he’s not nuts, go on’ gambit. Randians just can go chat amongst yourselves, somewhere near the scientologusts.

    Comment by Sacha — March 18, 2013 @ 1:04 pm

  16. Flashinglight @12 ““the problem would go away if only we became even more free-market deregulated” some problems might: businesses and their employees pay taxes, more business means more taxes, less unemployed. Does that sound okay?
    A friend of mine recently started her own small business. She was reduced to tears when the WCC held up her opening by nearly 3 weeks, as they couldn’t decide which height standard had to be applied to the toilet under disability regs. The delay cost real money: rent, wages, interest, loss of income.

    “In fact, you might think that the real-world evidence as provided to us by the Universe points to the opposite conclusion.” Eh? The universe points to evolution, survival of the fittest and blind chance as being the ways to prosper… much like in a free-market really. In the animal kingdom, there is no central planner, no government/sovereign favours… although there are parasites!

    Comment by Clunking Fist — March 18, 2013 @ 1:07 pm

  17. yes CF – “simple” being the key word, i would go for “deliberately dishonest” myself

    As for debating with Hide – he appears to be making an argument so powerfull it doesnt need debating (or a connection to reality)

    Comment by framu — March 18, 2013 @ 1:10 pm

  18. “15.Ah the ‘prove he’s not nuts, go on’ gambit. ”
    Actually, i said “prove he said [we was freemarket once] in the article”. But you keep on playing the man, not the ball, eh?
    I’m not a fan, just slightly impressed with what he [or someone on his behalf] wrote. Why slightly? He highlight issues, but doesn’t offer solutions, nor consider the consequences of implied solutions. Such as: would he REALLY vote to end taxpayer funding of the ballet, the racing industry? I doubt it, he lacks balls.
    I am concerned, though, to see no workable solutions put forward by the friends of the poor and downtrodden; you lefties.
    However, we all know that most of you lefties are simply urban elites (or rural elites in the case of Sanc) who are happy in their taxpayer funded jobs, visiting taxpayer funded museums and taxpayer funded ballet.

    Comment by Clunking Fist — March 18, 2013 @ 1:18 pm

  19. Does anyone here remember Patrick Fitzgerald from nz.politics? His usual copypasta would work quite well in this comments thread.

    Comment by kim — March 18, 2013 @ 1:19 pm

  20. framu, what is the dishonesty to which you refer? Do you think that there is NO welfare trap? that the ballet and the racing industry does NOT receive taxpayer funding? That you DON’T have to be well-off to afford a house in a good school district?

    Comment by Clunking Fist — March 18, 2013 @ 1:24 pm

  21. Of course, I’m not surprised to see a lefty ignore concerns about the welfare trap.

    You must be reading a different blog entry, CF.

    I see DMc rebuking Hide for his sloppy logic and (apparently) willful ignorance – reframe them as Hide’s “concerns” if you will – rather than an examination of Hides new-found concern for the ‘heaving, pathetic underclass’ (h/t fellow traveler Cathy Odgers).

    Where was Hide’s soap-boxing for the working poor, unemployed and unemployable when he was in Parliament?

    Comment by Gregor W — March 18, 2013 @ 1:28 pm

  22. I agree with Rodney. There are so many useless and unhelpful policies that it is obvious that social engineering has happened to brred an underclass and the problem, which stemmed from the political sphere, is now cultural. Work&Income do not provide the necessary help available. There has been an increase in part time jobs and a decrease in full time jobs, yet the government has instructed work and income to get every beneficiary, regardless of if they are on a sickness or over fifties benefit or not, to look for fulltime work. How silly is that? The statistics have shown that there are a declining amount of fulltime jobs, the government exacerbates the problem by allowing fulltime permanent staff to be laid off to provide work for prisoners, so not all beneficiaries should be targeted and clamped down on, just those on the Unemployment Benefit and those on the sickness benefit that aren’t actually sick.

    Comment by Daniel Lang — March 18, 2013 @ 1:30 pm

  23. “He highlight issues, but doesn’t offer solutions, nor consider the consequences of implied solutions”
    He most certainly is providing solutions – ACT party policy. To argue that hes just, you know, thinking out loud and not pushing any particular barrow requires you to ignore everything the man has championed since Rodger Douglas turned turtle. But i’ll agree hes not big on consequences.

    and speaking of playing the man and not the ball….

    “However, we all know that most of you lefties are simply urban elites (or rural elites in the case of Sanc) who are happy in their taxpayer funded jobs, visiting taxpayer funded museums and taxpayer funded ballet.”

    ahem

    Comment by framu — March 18, 2013 @ 1:35 pm

  24. CF – the dishonesty i refer to is Hide making an argument sooooo weak and with such sloppy, rubbish logic, that its either deliberate (dishonest) or hes a simpleton. Considering that hes got universty degrees, has been the leader of a political party and a politician for many years – im going to be chartiable and not call him a simpleton

    Comment by framu — March 18, 2013 @ 1:38 pm

  25. Rodney Hide makes very good points. Education for the rich has been increased in its subsidies since National got into power. I don’t believe that the state should fund private schooling. It has done so as the expense of some public schools.

    The cost of houses near public schools has gone up, on average, more than houses in outer suburbs like Rangiora. Hide’s a Rangiora boy, he knows what’s good for the country. Good on him!

    Comment by Daniel — March 18, 2013 @ 2:02 pm

  26. Clunking Fist,

    Reference to “the Universe” was a subtle dig at James’ objectivist beliefs, not intended for rational discussants.

    As for your “prove Hide is wrong” challenge, what do you mean by it? Most of what Hide says is descriptive (although you could question his choice of terms to describe phenomena, or his linking of various issues). So are you asking someone to (say) prove that he is wrong in asserting that: “Rich girls are subsidised to attend university and become teachers, accountants and lawyers. Poor girls are subsidised to drop out of school and have babies”? Well, language choices aside, it can’t be done … publicly subsidised university education predominantly (but not universally) is accessed by kids from wealthier households, while most young women on the DPB (who are but a small percentage of the total numbers of women on the DPB) are kids from poorer households. So, Hide is “right” in making this claim.

    But, of course, that isn’t the point of his piece. Rather, he’s saying that the only way to fix this described problem is to get rid of subsidised university education and abolish the DPB, thus making the poor better off. To which one might quite reasonably say, “prove it”, whilst looking at the past experiences of such reforms in the New Zealand context.

    In other words, it isn’t what Hide is saying. It’s what he’s not saying (and apparently choosing to ignore) that makes his column a target for satire/derision.

    Comment by Flashing Light — March 18, 2013 @ 2:23 pm

  27. Patrick Fitzgerald? This:

    I don’t love you for your graveyard eyes
    I don’t love you for your shaven thighs
    I just love you for that
    Beat-beat-beat-beat-beating

    I don’t love you for your tattered tie
    I don’t love you, and I don’t know why
    I just love you for that
    Beat-beat-beat-beat-beating

    I’ve got a safety pin stuck in my heart
    For you, for you

    I don’t love you for your professed hate
    I don’t love you for your cards of fate
    I just love you for that
    Beat-beat-beat-beat-beating

    I don’t love you for your painted shoes
    I don’t love you for your friends you never choose
    I just love you for that
    Beat-beat-beat-beat-beating

    I’ve got a safety pin stuck in my heart
    For you, for you

    I don’t love you for your many reasons
    Propagandas, doctrines, treasons
    All I know’s that
    Beat-beat-beat-beat-beating

    I’ve got an ear inflamed on my dog chain
    Painted faces, painted names –
    My shirt – it’s all that
    Beat-beat-beat-beat-beating

    I’ve got a safety pin stuck in my heart
    For you, for you

    ~There. Just improved everyone’s day~

    Comment by Me Too — March 18, 2013 @ 2:23 pm

  28. That you DON’T have to be well-off to afford a house in a good school district?

    This is only true, of course, if your definition of “a good school” extends to Auckland Grammar or equivalent. But if you were to read, say, the Education Review Office’s 2012 review of Mangere College, you might be tempted to say that it is a load of horse shit.

    Comment by Flashing Light — March 18, 2013 @ 2:35 pm

  29. As we have never had a free market (and the 80’s reforms were not even close…Douglas himself always remaining a believer in Government control) then apportioning blame to it for whatever followed is redundant. Hides assertion that Government intervention and the incentives and disincentives that it creates for people is perfectly correct….Basically near everything going wrong in NZ has a link back to political interference in the economy and peoples lives.

    Comment by James — March 18, 2013 @ 2:52 pm

  30. No more compelling than debating whether the earth is flat.

    Comment by Sacha — March 18, 2013 @ 3:02 pm

  31. yeah james – but when a crack dealer says to you – you know what will fix your crack problem? More Crack! – you gonna believe them?

    Hides not arguing for what you term a free market (which is a paradox anyway – no market is truly free untill everyone can compete equally, which needs referees to counter power imbalances)

    – hes arguing for more of the same ACT lunacy.

    Comment by framu — March 18, 2013 @ 3:11 pm

  32. As we have never had a free market….

    James – I’ve used this argument myself but from a counter-position.

    Your basic proposition appears to be that something that doesn’t exist (and can never exist without perfect information) would fix everything if it wasn’t for that damned reality getting in the way.

    Comment by Gregor W — March 18, 2013 @ 4:05 pm

  33. “Perfect information”…like “trickle down” and “market failure” are such old worn out lefty strawmen….

    In a free market all one needs to know is the price…..thats the signal that brings together all the important info into one factor to consider. The people and their trades in the market are reality…

    Comment by James — March 18, 2013 @ 4:19 pm

  34. I know the price of bread now at Pak’N’Save.
    Does that mean a free market operates there?

    Comment by Gregor W — March 18, 2013 @ 4:25 pm

  35. “In a free market all one needs to know is the price” – only if you can prove that that is the only motivator for people buying things – and it isnt, so you cant.

    Unforunately for you and every other “free” market cheerleader, people just dont behave in the way your theory says they do

    Comment by framu — March 18, 2013 @ 4:42 pm

  36. The people and their trades in the market are reality…

    What does this even MEAN?

    Comment by Flashing Light — March 18, 2013 @ 4:50 pm

  37. Ah … back to the good old days … Danyl taking the piss out of the ACT Party, and people making fun of James for his views on objectivism. Why don’t we still do this more often?

    Comment by Andrew Geddis — March 18, 2013 @ 4:56 pm

  38. Why don’t we still do this more often?

    All we need now is Pete and Redbaiter to complete the trifecta.

    Comment by Gregor W — March 18, 2013 @ 5:13 pm

  39. The “good old days” fallacy is almost inevitably false.

    Comment by Hugh — March 18, 2013 @ 5:26 pm

  40. Rodney’s whole piece has “concern troll” written all over it.

    Comment by deepred — March 18, 2013 @ 7:11 pm

  41. Also, racist, much?

    ” The Government teaches poor kids their land was stolen and that to prosper they must work on Treaty claims in hope of winning it back.”

    Because white people and other historical or recent immigrants are never, ever poor.

    Comment by Flynn — March 18, 2013 @ 9:29 pm

  42. “Why don’t we still do this more often?

    Comment by Andrew Geddis — March 18, 2013 @ 4:56 pm”

    Fucking tedious but effective trolling by Danyl I agree.

    Comment by teemotay@gmail.com — March 19, 2013 @ 6:18 am

  43. What a lot of sad-sacks there are here. Never mind the message – just attack the messenger…….

    What Hide said is pretty much spot on. OK maybe the wording was a bit wrong (eg: The ‘government’ does something… Actually what he means is the the government oversees the implimentation of a policy – such as welfare – with certain results.)

    I was listening to a couple of commentators on national radio yesterday wailing about the fact that todays younger generation (thats up to 30 or 35) are not as ‘wealthy’ as there parents were at the same age. And its true – their parents mostly had houses and savings at the same age. Today most of those under 35 dont have houses, have no savings and massive student loans and spend every penny they get – mostly on stuff that is a complete waste of time and effort
    I dont know all the reasons – but its not good.

    Comment by barry bourke — March 19, 2013 @ 6:21 am

  44. In a free market all one needs to know is the price…..thats the signal that brings together all the important info into one factor to consider. The people and their trades in the market are reality…
    Flashback to August 2010:
    Rodney was actually a first rate teacher of economics and enviromental science too. He could walk into many high six figure jobs tomorrow.

    Comment by Joe W — March 19, 2013 @ 9:25 am

  45. Yeah, Flynn, I had that exact same thought too.

    Hide has some good points, although he misses the fact that things even themselves out pretty good in this country still.

    He also declined to mention that, when adjusted for inflation, those that the state “subsidised to go to university”, such as Doctors and lawyers and teachers, are being paid less than they were thirty or forty years ago.

    Comment by Daniel — March 19, 2013 @ 1:55 pm

  46. Another piece of terrible writing from Hide, and more terrible defending of ACT’s failed policies from right-whinger adherents like James (“Neo-liberal policies haven’t been applied properly/If you’d only give it another three decades for it to work!”), et al.

    It’s terribly entertaining.

    Comment by Dan Burt — March 19, 2013 @ 9:43 pm

  47. Dan…ughhh. More lies I see…Quoting me saying stuff I never did….tsk. What is this neo-liberal thing you and your fellow statist slave mongers think existed or was supported by free marketeers…?

    Joe W….he could. He chose not to….He had babies and renovated a home for them and his lovely wife. he is enjoying life at his pace….he has the option to.

    Comment by James — March 19, 2013 @ 10:34 pm

  48. @ James: It’s not so much quoting you directly, it’s paraphrasing the entirety of what you’ve said in defence of failed policies. Also, are you denying that neo-liberal policies were followed in New Zealand? Obviously you’ve been hiding under a rock. (And, me, a statist? Haha. Well, obviously you know me better than I know myself.)

    Comment by Dan Burt — March 19, 2013 @ 10:38 pm

  49. Joe W….he could. He chose not to….He had babies and renovated a home for them and his lovely wife.
    No doubt he’ll get around to renovating the living arrangements of his not-so-lovely wives “at his pace”.
    I guess it shouldn’t surprise me that someone who could “walk into” several jobs at once should practice a form of Big Love.

    Comment by Joe W — March 20, 2013 @ 8:55 am

  50. I think considering people as rational maximisers is a useful model.

    But the role of Govt is not about getting people to do what they want but rather to not do what they want – eg renege on a contract – or to do what they don’t want eg save for their retirement.

    Comment by NeilM — March 20, 2013 @ 10:55 am

  51. But the role of Govt is not about getting people to do … what they don’t want eg save for their retirement.

    So … considering people as rational maximisers actually isn’t a useful model? Or, it’s only useful until it isn’t?

    Comment by Andrew Geddis — March 20, 2013 @ 12:03 pm

  52. Grrr … “But the role of Govt is … about getting people to do … what they don’t want eg save for their retirement.”

    Comment by Andrew Geddis — March 20, 2013 @ 12:05 pm

  53. “So … considering people as rational maximisers actually isn’t a useful model? Or, it’s only useful until it isn’t?”

    It’s a usefully model just that the role of the govt is not always to allow a rational maximiser to do what they want.

    Comment by NeilM — March 20, 2013 @ 12:08 pm

  54. Geez, some of you people talk a lot of theoretical nonsense.

    Comment by Dan — March 20, 2013 @ 12:16 pm

  55. @NeilM 12:08pm: It’s a usefully model just that the role of the govt is not always to allow a rational maximiser to do what they want.

    … because their behaviour is not actually rational and doesn’t actually maximise their utility? Utility is measured across all time periods. Forcing ‘rational maxmisers’ to save for retirement when they don’t want to automatically shows that they’re 1) not rational and 2) not maximising their utility. Otherwise we’d just let them do what they want, yes?

    Comment by Vanilla Eis — March 20, 2013 @ 12:18 pm

  56. It’s probably a slightly garbled application of what I’ve been reading in:

    The Bounds of Reason: Game Theory and the Unification of the Behavioral Sciences

    http://www.umass.edu/preferen/Game%20Theory%20for%20the%20Behavioral%20Sciences/BOR%20Public/BOR%20Contents.pdf

    Comment by NeilM — March 20, 2013 @ 12:24 pm

  57. Dan, it’s _____day here on the Dimpost.

    Comment by TransportationDevice A7-98.1 — March 20, 2013 @ 2:06 pm

  58. I think I’ve heard Russell Norman’s “tax is theft” line somewhere else.

    Maybe someone should point out that what was on offer in Cyprus wasn’t a tax and in fact tax isn’t theft.

    The alternative, whereby I as a Kiwibank customer pay a tax inorder to bailout westpac at some future point doesn’t appeal greatly.

    Comment by NeilM — March 20, 2013 @ 4:11 pm

  59. Norman is appealing to his fan base who are in the most part financially illiterate, I mean WTF does he want, the taxpayer underwriting all banking idiocy? English is signalling to the people who fund NZ’s massive debt (thanks M Cullen, you know the guy who said the GFC wouldn’t affect NZ so fuck you NZ I’m spending up large) that our sovereign liability in the case of a systemic banking system failure is contained – that’s a good thing.

    Comment by Tim — March 20, 2013 @ 5:18 pm

  60. Nice try. Russel Norman proposes the banks insure their own losses, not get depositors or taxpayers to underwrite them. Gordon Campbell’s article might help the understanding: http://gordoncampbell.scoop.co.nz/2013/03/20/gordon-campbell-on-the-official-emergency-plan-to-steal-from-your-bank-account/

    Comment by Sacha — March 20, 2013 @ 5:27 pm

  61. You prove the point about financial illiteracy. 1. The banks will increase fees to cover the re-insurance / contingency, 2. You trust the banks 3. Lenders will view the Sledgehammer approach to banking system failure somewhat skeptically (http://en.wikipedia.org/wiki/Sledge_Hammer!).

    Norman’s out of his depth and Campbell is his useful idiot.

    Comment by Tim — March 20, 2013 @ 5:50 pm

  62. Norman’s out of his depth and Campbell is his useful idiot.

    Because the folks who *know* how to do this properly did such a stand-up job right through to 2008, right? And let’s not mention South Canterbury, et al.

    The difference between Campbell and you, Timmy, is that he’s useful for something.

    Comment by Flashing Light — March 20, 2013 @ 6:41 pm

  63. “The banks will increase fees to cover the re-insurance / contingency”

    Like any business covers risk mitigation costs in its charges, yes.

    Comment by Sacha — March 20, 2013 @ 9:27 pm

  64. So….

    1. “Russel Norman proposes the banks insure their own losses, not get depositors or taxpayers to underwrite them” = “business covers risk mitigation costs in its charges, yes so you want the banks to increase fees.

    2. “the folks who *know* how to do this properly did such a stand-up job right through to 2008, right? And let’s not mention South Canterbury”, whats your point with respect my assertion that the banks are shysters and Norman and Campbell are out of their depth and useful idiots respectively.

    Honestly (ahem) I’d like to engage you but it’s like teasing James.

    Comment by Tim — March 20, 2013 @ 10:15 pm

  65. How am I being teased…? The economic illiteracy here is funny to behold…which is why people come to laugh.

    Tax IS theft. Try not paying it and see what happens….nimrods….lol.

    Comment by James — March 20, 2013 @ 10:54 pm

  66. Geddis the tool….maybe if people weren’t robbed of their money in the first place and were on clear notice that saving for their retirment was…like…you know…THEIR responsibility, and the only other options were either voluntary charity or the gutter they might do something about it mmmm? The statist mind….concrete bound.

    Comment by James — March 20, 2013 @ 10:59 pm

  67. “The economic illiteracy here is funny to behold…which is why people come to laugh.”

    Oh, the irony at calling others “economically illiterate”. And people laugh at silly right-whingers who haven’t a clue, and think that because they’ve read a few books by some hack, are superior to others.

    “Tax IS theft. Try not paying it and see what happens […]”

    Tax isn’t theft. It’s for services rendered. If you want to dodge your responsibilities, then that’s fine. Face the penalties.

    “[M]aybe if people weren’t robbed of their money in the first place and were on clear notice that saving for their retirment was…like…you know…THEIR responsibility, and the only other options were either voluntary charity or the gutter they might do something about it mmmm?”

    You want to know WHY public pensions came into existence? It’s precisely *because* people faced “voluntary” charity (only for the “deserving poor”, mind you), or being rendered homeless. Nothing’s stopping you from investing and saving for your retirement; in fact, it’s recommended if possible.

    “The statist mind….concrete bound.”

    Yeah, yeah, “statists”. I’ll save you the trouble of spouting more slurs: “socialists”, “lefties”. Don’t forget “moochers” and “looters”.

    (This is fun!)

    Comment by Dan Burt — March 21, 2013 @ 12:11 am

  68. “1. The banks will increase fees to cover the re-insurance / contingency”

    Yes, a deposit insurance will just be passed on as higher bank fees. How Norman thinks that’s a good idea is hard to tell but I don’t think he’s got much if a brain.

    He’s also unaware that guaranteeing small deposits is quite a different matter to ensuring a bank doesn’t collapse.

    Cullen’s bailout system of tax payers fronting the cost was only never intended to be an unpleasant short term necessity justified by a greater good argument.

    It’s time to send a message to banks that that’s over.

    Comment by NeilM — March 21, 2013 @ 3:09 am

  69. @James,

    Geddis the tool….maybe if people weren’t robbed of their money in the first place and were on clear notice that saving for their retirment was…like…you know…THEIR responsibility

    It seems very odd to abuse me for simply pointing out to NeilM that his claim that the government has a legitimate role in forcing people to save for their retirement is superficially at odds with his default claim that people are rational maximisers of utility. Shouldn’t you be haranguing him for stealing peoples’ use of their own money?

    This really is the good old days!

    Comment by Andrew Geddis — March 21, 2013 @ 7:55 am

  70. Can I play? I’ll see your Hayek, put in my Friedman, but reserve the right to play my Keynes card later.

    Comment by Northshoreguynz — March 21, 2013 @ 8:17 am

  71. There was a deposit insurance in force for Cyprus. The proposed 6% to 12% grab by the IMF, ECB sundry other statists is a “tax” and not a loss it is not covered by deposit insurance. Lol. Government lawyers is there any other lower form of life? Anyways never trust collectivists like Wussel Norman cause they make it up as they go along.

    New Tories like Wussel (like all of govt) basically aint qualified to make the buying decisions on behalf of millions of people. And even if at really big stretch Wise King Wussel was acting with the best of intentions they always get owned by the Banks, IMF or central banks willingly or otherwise to the harm of the people.

    Comment by Simon — March 21, 2013 @ 8:37 am

  72. Tax is not necessarily for services rendered. People working fulltime in permanent positions earning only the minimum wage generally pay more tax than the amount of services they receive back. Someone on a benefit generally pays less tax than the amount received back. There’s a lot of discretionary payments here on both sides, so we don’t we just call it “partial theft”.

    Comment by Dan — March 21, 2013 @ 8:52 am

  73. “Wussel” ?!

    tell me wimon how old are you exactly? – you started so well, then wotally wailed wonce woo wused whe werm wussel

    Comment by framu — March 21, 2013 @ 9:45 am

  74. Ah. silly libertarians calling people names. It really is like the olden days, before a certain global financial crash. Some folk really don’t learn.

    Comment by Sacha — March 21, 2013 @ 9:50 am

  75. ““1. The banks will increase fees to cover the re-insurance / contingency”

    Yes, a deposit insurance will just be passed on as higher bank fees. How Norman thinks that’s a good idea is hard to tell but I don’t think he’s got much if a brain.”

    By passing it on in the form of bank fees, it is a clear cost that account holders can assess and take into account. This is much easier for account holders than being exposed to a risk of bank failure that only financial analysts can estimate. It also means the banks have more incentive to reduce the risk, because their incentive is to reduce the perecived risk in the eyes of insurers who have the capability to estimate the risk, rather than to reduce the perceived risk in the eyes of depoisitors who don’t.

    Comment by kahikatea — March 21, 2013 @ 10:37 am

  76. 1. The banks will increase fees to cover the re-insurance / contingency”

    Yes, a deposit insurance will just be passed on as higher bank fees. How Norman thinks that’s a good idea is hard to tell but I don’t think he’s got much if a brain.”

    It seems pretty relevant that NZ Banks (and other financial institutions) covered by the Crown Retail Deposit Scheme were paying the Government for deposit insurance right up until December 2011. I didn’t notice bank fees plunging once this ended – so either they absorbed the cost of that insurance from existing income, or else banks are still charging customers for a safety-net they don’t actually have anymore. In either case, it complicates the claim that fees must rise as a consequence of adopting Norman’s proposal.

    Also, Australian Banks still are required to carry insurance for the first $250,000 in deposits. Doesn’t seem to have crippled the Australian banking sector.

    Seems to me that people who condemn Norman as stupid/uninformed actually are guilty of applying an assumed model of the world rather than looking at what actually is happening in it.

    Comment by Andrew Geddis — March 21, 2013 @ 11:12 am

  77. Exactly. I would rather face higher fees in the short to medium term rather than have my meagre savings, and the savings of my family members and friends, be at the mercy of the banks, because with this class action suit and some other discrepancies in banking practices (such as clients being told that it costs a ridiculous $5.00 per page for you to print off a bank statement at a branch if they’ve already sent you out one and you cannot find out and then, a few months later, discretely charging you a mere $1.00 for the whole statement as end-of-the-month fees without telling you at the counter), the stability of banks is looking increasingly fragile.

    Comment by Dan — March 21, 2013 @ 11:18 am

  78. It also means the banks have more incentive to reduce the risk, because their incentive is to reduce the perecived risk in the eyes of insurers…

    I think banks will also want to reduce risk in the eyes of depositors in terms of brand management.

    Certainly, I would elect to transfer to a bank who pitched their risk management strategy up front either asking me to pay for it or even better, making a claim that they are solid / conservative enough in their own risk practices not to need this type of reinsurance.

    Comment by Gregor W — March 21, 2013 @ 11:18 am

  79. “I would elect to transfer to a bank who pitched their risk management strategy up front either asking me to pay for it or even better, making a claim that they are solid / conservative enough in their own risk practices not to need this type of reinsurance”

    I’m Colin Meads and this is a fence post. Solid as!

    Comment by Jim in Tokyo — March 21, 2013 @ 1:24 pm

  80. “It seems pretty relevant that NZ Banks (and other financial institutions) covered by the Crown Retail Deposit Scheme were paying the Government for deposit insurance right up until December 2011”

    But not covering eventual govt liabilities. They got cheap govt-guaranteed insurance.

    The real insurance market will be more expensive.

    But you’ve missed the point that that scheme was a retail deposit guarantee scheme. It was aimed at saving financial intuitions collapsing.

    Guarantees on small deposits would do that which is why Cullen went for the option he did.

    Comment by NeilM — March 21, 2013 @ 2:10 pm

  81. But ultimately the govt under any scheme will be the guarantor of last resort. Banks will remain to big to fail.

    The issue is what percentage of burden should fall on those that went for a particular bank and how to keep the bank from going under and taking all of people’s savings not just a small percentage.

    Comment by NeilM — March 21, 2013 @ 2:14 pm

  82. That should be:

    “Guarantees on small deposits would not do that which is why Cullen went for the option he did.”

    Comment by NeilM — March 21, 2013 @ 2:18 pm

  83. seems pretty relevant that NZ Banks (and other financial institutions) covered by the Crown Retail Deposit Scheme were paying the Government for deposit insurance right up until December 2011.

    No, they weren’t. The orignal deposit scheme (which included the banks) ended in October 2010. The ‘extended’ scheme, which ended December 11 included ONLY the institutions listed here:
    http://www.treasury.govt.nz/economy/guarantee/retail/approved

    The banks didn’t participate in the extended scheme because by that stage the RBNZ core funding ratio was in place and the scheme wasn’t adding any extra value to the soundness of the financial system. The few building societies, credit unions, and finance companies that entered the extended scheme were at risk of having money rush out the door (they were, of course, quite happy to see it rush in in the first place) and needed more time to arrange an orderly maturity of depositors funds.

    As to the cost, it worked out at roughly 15 basis points on a bank Retail Term Deposit (i.e. as a depositor, the advertised rate you were being offered was 0.15% less than otherwise would have been the case).
    With everything else that was going on at the time (2010 Q4) in global markets, the cost being passed on to retail depositors was simply lost in the volatility we all saw in interest rates.

    Comment by Phil — March 21, 2013 @ 2:27 pm

  84. I’m Colin Meads and this is a fence post. Solid as!

    Colin Meads didn’t shill for banks.
    He shilled for property developers disguised as pseudo-banks. There is a difference.

    Comment by Gregor W — March 21, 2013 @ 2:30 pm

  85. Gregor, not to the people who were the shillees.

    Comment by TransportationDevice A7-98.1 — March 21, 2013 @ 3:08 pm

  86. True, but as with all things, caveat emptor.

    The info was available around credit worthiness if people chose to look for it.
    If you bought into the probity of a pseudo-bank purely based on the fading star power of a rugby once-was-great, then I have a bridge(corp) to sell you.

    Comment by Gregor W — March 21, 2013 @ 3:20 pm

  87. The Guardian is reporting that as an alternative the Cypriot govt is considering nationalising superfunds and selling assets to the Russian oligarchies.

    There’s a lesson of sort, not that we’re like Cyprus – that’s just scaremongering from the Greens – but that there’s not likely to be any pleasant solution to bank failures.

    Comment by NeilM — March 21, 2013 @ 4:01 pm

  88. Why is everyone talking in the hypothetical regarding bank collapse? BNZ went tits up in 1990. The incoming National Government of the time ponied but taxpayer money to “rescue” it.

    Comment by OECD rank 22 kiwi — March 21, 2013 @ 4:42 pm

  89. Because in 1990, 51% of the BNZ was state owned.

    Comment by Gregor W — March 21, 2013 @ 5:14 pm

  90. And the BNZ at the time was tied to DFC’s bungled ventures into the glamour companies of the day – Chase, Equiticorp, Judgecorp et al. Who happened to be involved in, of all things, speculation on cheesy mirror-glassed properties.

    Comment by deepred — March 21, 2013 @ 7:22 pm

  91. Irrespective they went tits up and the crown bailed them.

    Comment by Tim — March 21, 2013 @ 8:45 pm

  92. It’s a whole nest of moral hazard vipers. If banks don’t have to worry about their depositors because the govt will bail them out then what’s to moderate their behaviour?

    Do investment accounts with high interest (to compensate for higher risk) be treated the same as low interest- low risk accounts?

    Cyprus has deposit guarantees but the banks went bust anyway, now someone else is having to front up to bail them out but somehow asking for a smaller contribution to that bailout is being called theft.

    I’d really like some of the calibre if Cullen to still be around to speak for the centre left again on these sorts of issues. He essentially got our bailout process right. Overlooked making sure Treasury had the necessary oversight skills, but that’s just with the benefit of hindsight.

    Comment by NeilM — March 21, 2013 @ 9:49 pm

  93. … not that we’re like Cyprus – that’s just scaremongering from the Greens…

    Where did the Greens say we were like Cyrus? I’ve only read the press release on Scoop, but if anything, they seem to be saying the opposite.

    Comment by steve — March 21, 2013 @ 9:58 pm

  94. The first sentence of their press release is :

    “The National Government are pushing a Cyprus-style solution to bank failure in New Zealand ”

    It’s maybe not claiming NZ is like Cyprus but it is playing on the heated nature of what is going on there.

    He doesn’t mention the extraordinary circumstances involved and doesn’t mention that what the reserve bank is proposing is one option in a worst case scenario.

    He doesn’t mention that in exchange depositors equity in the bank.

    Relevant detail omitted, appeal to options. Maybe that’s not scaremongering but its not what I want to see in a centre left politician.

    And he talks of an insurance scheme and the Audtrslian situation but for small (in Austrslia $250.000 is small apparently) it’s not an insurance scheme it’s a govt guarantee.

    It’s as garbled as his comments on quantative easing.

    Comment by NeilM — March 21, 2013 @ 10:26 pm

  95. That’s supposed to be:

    “Relevant detail omitted, appeal to emotions”

    Comment by NeilM — March 21, 2013 @ 10:29 pm

  96. “sniffs” Wow….it’s like Kiwiblog in here. Off for some fresh air….

    Comment by Ben — March 22, 2013 @ 7:28 am

  97. Has
    Ah, it’s only like kiwi blog if you feel the bullshit talk is bullshit…..

    Comment by teemotay@gmail.com — March 22, 2013 @ 10:16 pm


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