The Dim-Post

June 24, 2015

Defying gravity

Filed under: Uncategorized — danylmc @ 2:15 pm

No Right Turn documents John Key’s assurance that cutting the $1000 KiwiSaver subsidy ‘will not make a blind bit of difference to the number of people who join KiwiSaver’ and the revelation that KiwiSaver enrollments have dropped by 50% since the announcement was made. Another triumph for our Prime Minister’s much-celebrated business genius.

It ties into something I’ve been mulling over in the past few days: the current political climate feels a bit weird to me. The last two weeks have seen Key’s credibility take a succession of hits. Pretty much every statement out of his mouth is almost instantly disproved, or revealed as a lie, or is just simply risible. Refugee numbers. The explanation that Nick Smith’s development properties in Auckland were ‘conceptual’ and that their legal position with local iwi was solid. Yesterday in question time the Greens revealed that Murray McCully had invited the Saudi businessman at the center of the Sheepgate scandal to sue the New Zealand government as a pretext for McCully to pay him a bribe, and Key explained that he stood behind McCully because it was all Labour’s fault, as would be revealed in the redacted Cabinet papers that Labour then attempted to release, but National blocked.

It feels like everything these guys touch right now is a disaster. Blaming Labour for all of their many blunders is pretty much all they do. It’s doomed, last-term government end-of-days stuff, like Labour’s coalition government at the end of their third term, with all the allegations about Winston Peters and Taito Phillip Field, and Clark’s endless wretched evasions over same. And yet, none of the current blunders and cover-ups have any cut-through. Key and his government are still super-popular.

Yes, I understand that some of this is beltway stuff and Labour looks unattractive to many voters and all the rest of it. But it’s weird that none of this sticks.

81 Comments »

  1. “Pretty much every statement out of his mouth is almost instantly disproved, or revealed as a lie, or is just simply risible. ”

    this is by no means, a new thing

    Comment by framu — June 24, 2015 @ 2:35 pm

  2. Voter apathy and the disintegration of the Labour Party, there is no real alternative to National now or in the foreseeable future is there, players like Craig ,Dotcom and Key the rich boys treating the NZ Political landscape like a play thing ,an amusement, I am sure our illustrious leader is just bored with the whole deal.

    Comment by Woz — June 24, 2015 @ 2:38 pm

  3. That’s why he’s known as Teflon John. He’s a whiz at selling second-hand cars. and apparently most Kiwis are happy to buy them.

    Comment by Māyā (@MayaOfAuckland) — June 24, 2015 @ 2:42 pm

  4. I don’t think a lot of people care much about sheepgate and the refugee numbers because it doesn’t affect them. Smith’s housing screw-up is more significant since it affects the Auckland property market, which every man and his dog has an opinion on at the moment. I’m fairly sure the government will take a small hit on that in the next poll.

    Unlike a lot of the small fry things that Key is dealing with, in 2008 Labour had to content with the global financial crisis and a recession. That did effect everyone. Unfortunately for Labour, voters rated the economy as the most important issue in the election, and National was perceived as more competent at dealing with it than Labour.

    In other words, if the issue affects lots of people, and the government is perceived as incompetent, it will stick. If the issue doesn’t affect many people, no matter how much the government screws up, it won’t stick.

    Comment by Seb Rattansen — June 24, 2015 @ 2:46 pm

  5. Ever notice the similarity between John Key and Jimmy Saville, it’s uncanny, they could be twins even their hair styles are identical.

    Comment by Woz — June 24, 2015 @ 3:45 pm

  6. Why, it’s almost as if you have absolutely no comprehension of the meaning of the word “identical”!

    Comment by Exclamation Mark — June 24, 2015 @ 4:01 pm

  7. The Auckland property market which never bothered Key is like a simmering pot. Its slowly coming to the boil, and eventually it will boil over. Thats when the shit will hit the fan. Unregulated foreign investment
    is going to be the downfall of our way of life. It should but probably wont cost National the next election. I say give Labour a leg up. They cant stuff things up any more than they,re being stuffed up at present.
    As for McCully he should be out on his arse.

    Comment by bosun — June 24, 2015 @ 4:29 pm

  8. “Lack of alternative” comes to mind. Little has been done (pardon the pun) to present Labour as a viable alternative. Where is the charismatic leader, with the united team behind him, full of new ideas, while hammering home the failings of the current government?

    I think the trouble is not that “Key and his government are still super-popular”, but that Labour is super-unpopular.

    Comment by eszett — June 24, 2015 @ 4:43 pm

  9. Seb #4: On top of that, there was a pile-on of nanny state rhetoric from some of the usual suspects in the run up to 2008.

    Right now we have a 2-speed economy that’s largely carried by dairy, the Christchurch rebuild, and the Auckland housing bubble. And up until recently the Aussies were largely propped up by the minerals and motor vehicle sectors. Once any of those pillars gives way…

    Comment by Kumara Republic (@kumararepublic) — June 24, 2015 @ 5:10 pm

  10. Two other possible options that interact with one another are that most of the scandals and problems to which you refer are beat ups without substance and your dislike of John Key and National leads you to pay more attention to politics to seek evidence to support that dislike.

    Alternatively, Key and National are like the Roadrunner and raced off the political cliff some time ago but there will be a lag until they (and the public) realise what has happened. And yet the pattern this year is very like the pattern that occurred after the 2011 election when it seemed nothing would go right for the government.

    Comment by Tinakori — June 24, 2015 @ 5:16 pm

  11. Labour just don’t look fit to govern, changing the leader every year or two ain’t going to change that perception. Labour have made absolutely no effort to bring in fresh thinking and talent and have elected a shocker of a new leader and just don’t seem to care anymore unless it is beltway gossip. the Greens could do with a bit more renewal too lest they end up marooned on 10%.

    Comment by David — June 24, 2015 @ 5:22 pm

  12. Most of these stories barely get traction in today’s media landscape. I’ve given up watching question time in the House because I know that whatever happens it will vanish into thin air. No point getting worked up about blatant lies that never even make it onto the news.

    The classic illustration is the Colin Craig nonsesne. Actual relevance to government/Parliament/people’s lives – zero. Coverage compared with other politics stories – huge. Stuff, Herald, 6 pm TV bulletins – they are all way beyond parody already.

    It’s not about Labour or Little or the Greens. They’re doing OK for the few who notice. But if they had Abraham Lincoln it would make no difference. John Key is the PM for our shallow times, where there is no space for issues that require polysyllables.

    He is us, and that’s the really scary part.

    Comment by sammy 3.0 — June 24, 2015 @ 5:48 pm

  13. “It’s not about Labour or Little or the Greens. They’re doing OK for the few who notice. But if they had Abraham Lincoln it would make no difference. John Key is the PM for our shallow times, where there is no space for issues that require polysyllables.

    He is us, and that’s the really scary part.”

    Its depressing because its true

    Comment by max — June 24, 2015 @ 6:53 pm

  14. Or…
    “He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark moustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.”

    Comment by Lee Clark — June 24, 2015 @ 6:57 pm

  15. beautiful

    Comment by Sacha — June 24, 2015 @ 7:14 pm

  16. “…Most of these stories barely get traction in today’s media landscape…”

    In Auckland the housing issue is huge, and it is knocking huge wodges off Key’s teflon armour around the water coolers. When Danyl says “…the current political climate feels a bit weird to me…” I think what we are seeing is the development of huge political vacuum waiting for that wooooosh as something rushes in to occupy it. I don’t understand Labour’s hesitancy on the Auckland housing issue. They can promise anything from opposition – a big speach saying they’ll ban foreign ownership of existing housing stock, promise to spend billions on a crash government building program with subsidies for young first home buyers with cute babies, anything that looked like they had a plan (remember, a bad plan is better than no plan, which is what this government has now) would smash the Nats in Auckland right now.

    But as for the rest of Key’s glib lies being exposed, yeah I with Sammy 3.0.

    Comment by Sanctuary — June 24, 2015 @ 7:23 pm

  17. Re: Sheepgate, part of the problem is that the story is receiving almost no attention in the major media platforms. Sure, Hooton has been very vocal on Nine to Noon and in columns for the NBR; Tracy Watkins has written of the scandal for Fairfax; and of course Heather du Plessis Allen has carefully uncovered stories for One News, but beyond that, the overall media response has been fragmented and lacking in momentum. The NZ Herald – whose political editor Audrey Young declared the deal a “creative” and “inventive” McCully special” – has, apart from a few cross words from Armstrong, been at sea, and Mediaworks is out of action. Effectively there has not been sustained Media coverage or pack-hunting.

    Another problem is that Key’s strategy of blaming Labour and thereby neutralising the scandal has been relatively successful. The story has shifted into a ‘he said/she said’ slugfest, even on RNZ where David Parker can appear on Checkpoint, hours after releasing the (redacted)Cabinet papers which vindicate Labour, and have Jim Mora say things like “so the question is, how much did you signal to the Saudis and what?”, “did you signal to the Saudi that the ban could be lifted at some point down the road”, and, best of all, “will this finally be put to rest, I mean will it be put to rest only when both sides .. [when] the original versions that both sides have access to are released, if that is possible?” Perhaps Mora was playing the devil’s advocate or perhaps not, either way it demonstrates how the scandal has dissolved into ambiguity and false equivalency.

    Comment by Nick — June 24, 2015 @ 7:28 pm

  18. “there has not been sustained Media coverage or pack-hunting”

    That is what political opposition parties have always fuelled. Even more essential with reducing media resources.

    Comment by Sacha — June 24, 2015 @ 8:03 pm

  19. What was Patrick Gower hunting today – a pigeon? He’s the Political Editor, and it’s as if Questions in Parliament never happened.

    Contrast McCully’s wrongdoing and Benson-Pope’s a decade before. He got skewered by Sean Plunket and Duncan Garner, amongst others, and their editors made it the lead story. Because it was.

    Comment by sammy 3.0 — June 24, 2015 @ 8:14 pm

  20. Currently in China there is legislation that forces many financiers to invest only within its boarders, those restrictions are about to be lifted, those investors and their estimated Billions will soon start flooding into New Zealand. Better learn Mandarin and buy a Rickshaw.

    Comment by Woz — June 24, 2015 @ 9:14 pm

  21. “Contrast McCully’s wrongdoing and Benson-Pope’s a decade before.”

    OK, Benson-Pope told porkies to Helen Clark, the media and Parliament on a matter of public interest. One of his staff told porkies to the media and another heavied a government agency to rescind an offer of employment to someone whose partner worked for National. Subsequently another Minister blocked her offer of employment at another government agency. On the Saudi matter we are being asked to believe it is a scandal that the government paid compensation to someone when the issue in question was causing government to government grief. The grounds for this scandal largely seem to be that the recipient of the compensation was a swarthy Arab gentleman. I suppose this approach is understandable from NZ First and the Greens whose core beliefs are heavily xenophobic but what’s Labour’s excuse?

    Comment by Tinakori — June 24, 2015 @ 9:50 pm

  22. The grounds for this scandal largely seem to be that the recipient of the compensation was a swarthy Arab gentleman.

    That’s not even worth a “nice try”. Generally I like to believe – or give benefit of the doubt – that people are debating in good faith, but that red herring is so desperately smelly it’s stinking up the screen.

    Comment by sammy 3.0 — June 24, 2015 @ 10:35 pm

  23. Yesterday in question time the Greens revealed that Murray McCully had invited the Saudi businessman at the center of the Sheepgate scandal to sue the New Zealand government as a pretext for McCully to pay him a bribe…

    At present it’s still an allegation rather than a revelation. Someone is characterising what someone else said in an unknown context as a “suggestion”.

    There’s a lot of potential meanings apart from “invite”.

    Invite might be an accurate characterisation but there’s not enough evidence to determine that.

    Comment by NeilM — June 24, 2015 @ 11:48 pm

  24. Sanc: “I don’t understand Labour’s hesitancy on the Auckland housing issue.”

    Maybe they’re wary of reinforcing half-baked stereotypes of being anti-wealth/anti-aspirational. It’s a good possibility that John Key’s political fortunes are heavily tied to the Auckland housing bubble – hence the big donations to the Nats from real estate ‘tycoons’ – which goes all the way back to the 1987 sharemarket bubble burst.

    And once again the question begs: did people who voted for Helen Clark really decamp to the Nats (which Labour Progress believes), or did they decamp to cynicism and disillusionment which is much harder to fix?

    Comment by Kumara Republic (@kumararepublic) — June 25, 2015 @ 12:21 am

  25. Tinakori #21: Corporate welfare and bribery come to mind. If Labour gets it right on the Saudi sheep issue, the ideal outcome would be for the public to start asking, “aren’t there more important things for these crooks to spend tax dollars on, like education and health?” Get it wrong, and it biggest winner could be the Taxpayers Union.

    Nick, Sacha, Sammy: how would today’s media handle Watergate?

    Comment by Kumara Republic (@kumararepublic) — June 25, 2015 @ 12:35 am

  26. The flatlining dairy market will sort out the Auckland housing market. Prices won’t drop, but the escalation will subside This is why the dollar is dropping, because New Zealand only does as well as its dairy farmers and smart people know that.

    Comment by Man overboard — June 25, 2015 @ 6:45 am

  27. “…Nick, Sacha, Sammy: how would today’s media handle Watergate..?”

    Can I have a go to?

    June 17, 2016: Labour campaign offices broken into. John Key claims he had nothing to do with it. Danyl writes a blog excoriating Labour’s failure to have a proper alarm installed, citing the Green party for it’s use of an eco-friendly ED-209 as a forward thinking approach.

    When it was revealed the PMs department was deeply involved Key would pretend he had no idea what his own aides got up to, Audrey Young would laud the break in as part of a dynamic winning strategy, Paul Henry would attack Andrew Little as a snivelling wimp and John Armstrong would applaud National’s clever use of non-democratic actors to avoid blame. The nation is enthralled with the new series of Julie Christies run-away ratings winner “Come dine with me: Celebrity PM edition”. A new poll would show National unaffected by the scandal.

    When it was revealed John Key had used the GCSB and SIS to procure information on his political enemies Key would say he just didn’t, so there! He would also say that was just one persons opinion, and he had others. Patrick Gower would launch into an anti-Labour rant because he didn’t get the scoop. Nicky Hager is arrested, just because.

    When the tapes were released the media would focus on the person who provided them and the police would only investigate if releasing the tapes was illegal. Mike Hosking would pronounce his ongoing love of John Key, Farrar would declare it all beltway nonsense, And the nation would be enthralled by the new royal baby. John Key cancels future elections in order to stop all this spying. John Armstrong applauds his clever snookering of Labour’s re-election chances, Audrey Young lauds National’s dynamic winning strategy, Fran O’Sullivan thinks it is exactly the stability the business sector has been looking for, Patrick Gower has an anti-Labour rant because the opposition forgot to tell him first that they’d all been arrested and shot. Michelle Boag makes a fortune from re-newed live sheep exports. The nation is enthralled by Wendy Petries new relationship with Alison Mau. A New poll shows National’s popularity unaffected by it’s seizure of power and execution of it’s political enemies. Cameron Slater finally dies after fourteen days of continuous orgasms. He gets a state funeral. The nation is enthralled.

    Comment by Sanctuary — June 25, 2015 @ 7:30 am

  28. “I don’t understand Labour’s hesitancy on the Auckland housing issue. ”

    Ugh. Its because Labo knows how it works. The chinese money holds NZ’s economy together. Turn that off and the economy crashes. Its about confidence and the promise of more Chinese money hitting NZ keeps it all going. If Labo attack foreign ownership now it capital will not come back when they are in power. Capital flows make or break economies. Labo knows it and so does NZ’s overseas creditors.

    Not an endorsement but just how it is. NZ is massive debtor nation it needs the money.

    Comment by Simon — June 25, 2015 @ 8:46 am

  29. “It’s doomed, last-term government end-of-days stuff, like Labour’s coalition government at the end of their third term, with all the allegations about Winston Peters and Taito Phillip Field, and Clark’s endless wretched evasions over same. And yet, none of the current blunders and cover-ups have any cut-through. Key and his government are still super-popular.”

    We are at the start of term very few people are watching politics, this is when a government would prefer to be hit by scandals.

    Comment by unaha-closp — June 25, 2015 @ 9:01 am

  30. “I don’t understand Labour’s hesitancy on the Auckland housing issue. ”

    Because there is no non-disastrous solution. Irrespective of how it’s done, if prices are corrected you’re going to end up with tens of thousands of people with $700,000 mortgages on their $400,000 houses.

    I’d say both Labour and National are both quietly hoping that the inevitable correction happens on the other ones’ watch.

    Comment by rickrowling — June 25, 2015 @ 9:11 am

  31. “I don’t understand Labour’s hesitancy on the Auckland housing issue.”

    Because team Len Brown/Penny Hulse wants re-election in 2016. If Labour hypes up the deficiencies of Auckland housing now, it will impact very badly on the incumbent governing Labour/Left council.

    Comment by unaha-closp — June 25, 2015 @ 9:23 am

  32. Unaha is right. If politicians were given the magical power to choose when scandals were to hit, they’d all choose the post-election cooldown period.

    Comment by kalvarnsen — June 25, 2015 @ 10:00 am

  33. “….but that red herring is so desperately smelly it’s stinking up the screen.”

    So what makes it a scandal? There was a genuine issue – a government action compromised a commercial operation based on previous political policies – and that issue was causing government to government problems, a very strong incentive to resolve the issue. We can quite correctly say that we can’t compensate everyone disadvantaged by government policy changes but this was a very specific issue causing very specific problems and resolution required some form of compensation. The real test here is that if this deal had been done by a left wing government you would be explaining it in much the same way I am doing so now in response to attacks by National. I think on balance I can understand why a government of the left or the right would have done the deal. The only real complicating factor is that the deal was done by Murray McCully whose natural approach makes everything he does look dodgy.

    Comment by Tinakori — June 25, 2015 @ 10:12 am

  34. Murray McCully whose natural approach makes everything he does look dodgy.

    I think I got that. Unlike your “swarthy arab gentleman” McCully’s unapeallingly non-aryan aspect is due to excessive brown-nosing.

    Comment by Joe W — June 25, 2015 @ 10:28 am

  35. Admittedly I don’t quite understand how Key is for the time being escaping the deleterious effects of third term itis.

    But then I look at the Green’s proposal to increase refugee numbers and it’s mostly an attack on Key.

    And when Greenpeace scampers up on top of parliament to care for the environment their banner is an attack on Key.

    Now perhaps there’s a connection. If you truely care for refugees then why make it a party political attack when your own increase in numbers is so miserly and if you want care for the environment why just set out to annoy the people you want to convince.

    Comment by NeilM — June 25, 2015 @ 10:30 am

  36. remember, a bad plan is better than no plan, ….

    Rob made much the same points in defending Think Big. Mike Royko had much fun at the expense of the first Mayor Daley of Chicago, who would constantly demand of his opponents: I got a plan! You got a plan?.

    Leftist thinking perfectly incapsulated by that soundbite.

    Comment by Tom Hunter — June 25, 2015 @ 11:13 am

  37. Oh – and this: “…Nick, Sacha, Sammy: how would today’s media handle Watergate..?”

    Already answered last year during the “Dirty Politics” debate in this interview with US journalist Sharyl Attisson

    ATTKISSON: I think that we’ve gone backwards since that time when we really felt empowered as journalists. And I like to think as what would happen today during a Nixon type scandal, Nixon would basically refuse to turn over tapes to congress, his aides would refuse to testify to congress or would take the fifth or would lie to congress with fair amount of impunity. Woodward and Bernstein will be controversialized on social media by special and political interests.

    RADDATZ: Well, this is all very depressing–

    ATTKISSON: — Facebook accounts. And then at the end, Nixon would go on a popular late night comedy show during which time he would humorously refer to his attackers as people that were political witch hunters who believe in Area 51 type conspiracies.

    I’ve long thought Obama is the true inheritor of Nixon’s mantle, but Key as Nixon?

    Comment by Tom Hunter — June 25, 2015 @ 11:21 am

  38. Unaha: “Because team Len Brown/Penny Hulse wants re-election in 2016. If Labour hypes up the deficiencies of Auckland housing now, it will impact very badly on the incumbent governing Labour/Left council.”

    Alternatively, Labour could frame it as central Govt boxing in local Govt, as has happened with the Unitary Plan and the CRL. Then again, it’s an issue dating back to the days of Julius Vogel and the Main Trunk Line.

    Simon & Rickrowling: it reinforces my view that Key’s politcal career is tied directly to the housing bubble. And with apologies to the WaPo’s David Smick, whoever’s in charge of the bubble when it bursts could be out of power for a generation.

    Comment by Kumara Republic (@kumararepublic) — June 25, 2015 @ 11:27 am

  39. Tom Hunter: I’d say partly Nixon, partly Dubya.

    Comment by Kumara Republic (@kumararepublic) — June 25, 2015 @ 11:33 am

  40. “He is us, and that’s the really scary part.”

    Its depressing because its true.

    And not just in NZ but across the Western world: Spike It! When the Media Kill a Story for Political Reasons:

    What happens when the news media catch the White House in a demonstrable lie? That depends entirely on whether they like the administration. If they loathe the administration, it’s front-page news. If they like it, they spike the story. As Momma used to remind us, if you can’t say something nice, don’t say anything at all. What a great motto for reporters.

    That’s to do with the “Old Story” that broke the other day in the US about economist Jonathan Gruber being connected at all points of his body to the Obama administration over Obamacare:

    The Obama administration snapped into action. At a press conference, the president noted that Gruber was not employed by the White House and said flatly that he had not played an important role in drafting the law. Nancy Pelosi said the same thing. On background, senior White House officials reinforced the story. They vaguely remembered somebody named Gruber or Goober or something but, fortunately, he played only a marginal role in health care. Thanks for asking. Next question?

    But this is not a just a slash against the US MSM, because the next paragraph is the connection between Gruber’s multiple video assessment of US voters as being too stupid to understand the law of Obamacare, the media treatment of that pronouncement, and the conclusions the Administration seems to have drawn from that:

    Now, this may surprise you, but it turns out the White House knew Gruber very well and knew he played a crucial role in the health care bill. The White House simply decided to lie about it. Perhaps they agree with Gruber’s judgment about your intelligence.

    Perhaps it’s what Key and Obama crack up laughing about the most when they’re on the links in Hawaii. And they’re both likeable guys!

    Comment by Tom Hunter — June 25, 2015 @ 11:53 am

  41. “…Leftist thinking perfectly incapsulated by that soundbite…”

    I have got no fucking idea what you are talking about dude, beyond the suspicion you are trying to hammer a very round prejudice into a very square hole. Oh! hang on! To free market fanatics “plan” is a dirty word! No need to plan, the magic market fairy provides everything! Only leftists have plans! Now I get it! The magic fairies of the market guide you in your mystical magical journey through life! Wow, lucky to be you!

    If the higher cognitive ability to plan and make decisions about what a particular situation calls for, as opposed to ignorantly trying to impose pre-determined fantastical solutions, is somehow a peculiarly “left wing” piece of thinking then I guess I’ll have to plead guilty – and leave the inability to deal with reality or facts to right wing morons.

    Comment by Sanctuary — June 25, 2015 @ 11:57 am

  42. Brilliant and so true Sanctuary @ 27. Wish I could have put that all together.

    Comment by ianmac40 — June 25, 2015 @ 12:09 pm

  43. I’ve just come from a meeting with the Principal and Chairperson of the Board of Trustees at our local public school trying to convince them why it is wrong for the school to apply for gaming trust money to put uniforms on our sports teams. We have the words social justice littered throughout our school charter and curriculum guides. They see no contradiction between accepting pokie money and adhering to the principles of social justice.

    I’m with max@13.

    Comment by mag rod aigh — June 25, 2015 @ 12:32 pm

  44. i dunno neil – maybe its got something to do with the fact key is the PM and the party he leads is in charge

    Comment by framu — June 25, 2015 @ 12:40 pm

  45. Everyone is busy refixing their mortgages at the new, lower rates. Once they’ve got that out of the way, they may begin to notice. And if the “hits” continue, they will start to bite. Just like in (old?) video games: you’re fine until your health runs out.

    And the drop in KS enrolments? My guess is: children. The only reason to enrol children is to get the $1k kick-start and the annual tax credit (if you put the “minimum” amount in) and eventually get the first home buyer withdraws & credits. So KS was at risk of becoming a major item of welfare for the children of the middle classes.
    However, once a child becomes a worker, the 3% (albeit it taxed) employer contribution should make it a no-brainer again*.

    * subject always to the risk of “political interference”, such as the kick-start withdrawal just experienced, or the Muldoon-grab of yesteryear.

    “The magic fairies of the market guide you in your mystical magical journey through life!” They sure do, it’s how we buy food, particularly out-of-season fruit n veg. The magic of the invisible hand. Or as we call it these days supply and demand.
    Plan is not a dirty word, but central planning is. Are. Dammit.
    So a plan to aid supply is fine, if supply is artificially constrained. And green belts/restricted use/minimum section/height limits size, etc, are all “artificial”. I’m not saying do away with it all (after all, we’re ALL concerned about battery recycling plants next to resale value, I mean: our homes and schools), but every little freedom helps.
    At the moment, the Reserve Bank is trying to help moderate demand, and any restrictions on overseas buyers will also (should) aid the demand side.

    Comment by Clunking Fist — June 25, 2015 @ 2:51 pm

  46. I have got no fucking idea what you are talking about dude,…

    Of course.

    Oh! hang on! To free market fanatics “plan” is a dirty word!

    Not at all. What one needs are small, flexible plans that are limited in scale and scope so that they can be trimmed, changed or even completely abandoned when reality intrudes. You did say something about admiring the ability to deal with reality?

    Only leftists have plans!

    Again, not solely. There’s always a few Rightists of the “do something, anything” mentality. But Leftists are the ones who worship and demand gigantic, comprehensive, all-encompassing, universal, fully-costed, detailed, well managed plans. Plans that then cannot be corrected because the sunk cost is too high and because the correcting voices are drowned out by the shrieking propaganda needed to defend the plan when the desired utopia fails to eventuate. See Obambicare, GW and his happy band of neo-conservatives in Iraq, any communist shithole ever and our own Rob Muldoon of course. You’ll note that two of these groups were considered “right-wing”.

    Comment by tom hunter — June 25, 2015 @ 3:31 pm

  47. Now I get it! The magic fairies of the market guide you in your mystical magical journey through life!

    I’ve no doubt that the thousands and millions of individual minds that partake of markets every day and make countless decisions and little plans do appear to you and yours to be like magical fairies.

    Your reaction reminds me of watching Boris Yeltsin back in the late 80’s during a tour of an American supermarket, gazing in undisguised wonder at the variety and quantity of food and asking if this all came from thousands of farms, hundreds of companies, and dozens of markets with not a Collective Planner in sight. Magical! If only you’d been there to dive in front of him to take the bullet:
    NO, NO, BORIS. THEY’RE MAGICAL FAIRIES. DON’T TRUST THE MAGICAL FAIRIES. DON’T DESTROY THE COLLECTIVES DUDE

    Comment by tom hunter — June 25, 2015 @ 3:32 pm

  48. Carville knew best. “It’s the economy stupid.” When it craps out (it’s only a matter of time) the teflon will come off.

    Comment by Eltalstro — June 25, 2015 @ 4:27 pm

  49. James Carville also had as part of the short but sharp campaign plan for Bill Clinton to stay on track: “Change vs more of the same” and “Don’t forget healthcare.”

    For NZ Labour, they should start with a famous quote from Abe Lincoln: “A house divided against itself cannot stand”.

    Comment by Kumara Republic (@kumararepublic) — June 25, 2015 @ 4:51 pm

  50. http://www.bloomberg.com/quote/SHASHR:IND

    Shanghai A share market (only open to Chinese and chosen foreign institutions). Up 132% on the year and starting to look exceedingly toppy.

    USD350billon of lending to buy shares, and that’s just what they admit to.

    If and when that market goes south, there’s going to be a very big bang. I wonder how Key will cope.

    Comment by Rich — June 25, 2015 @ 5:56 pm

  51. “If and when that market goes south, there’s going to be a very big bang. I wonder how Key will cope.”

    Knowing Key’s financial background and potential connections, he’d probably write a blank cheque to prop up the banks, like Obama’s ‘too big to fail’ approach to Wall St. If I were in the same situation, I’d take a leaf out of the Icelandic book instead.

    Comment by Kumara Republic (@kumararepublic) — June 25, 2015 @ 6:49 pm

  52. Sanc: “He is us, and that’s the really scary part.”

    As in that immortal quote from the Pogo comics? “We have met the enemy, and he is us.

    In a way, it seems nouveau riche is the new tall poppy syndrome.

    Comment by Kumara Republic (@kumararepublic) — June 26, 2015 @ 1:05 am

  53. CF: much of the “artificial constraint” on building heights in Auckland just happens to be propped up by those who’d be keen to throw the RMA on a bonfire, namely Crs Quax and Brewer among others. It’d be hypocritically amusing if someone like Donald Trump or the developers of the Burj Khalifa wanted to build a slice of Manhattan or Dubai in Epsom or Orakei, and Quax, Brewer & co used the RMA to veto it. Not unlike Foodstuffs and Progressives using it to block each other’s plans for commercial gain.

    Comment by Kumara Republic (@kumararepublic) — June 26, 2015 @ 1:37 am

  54. “much of the “artificial constraint” on building heights in Auckland just happens to be propped up by those who’d be keen to throw the RMA on a bonfire”
    Thus speaking to the quality of the individuals who put themselves forward for public duty. The family-values guys trying to pork their secretaries/young boys, the right-wingers wanting corporate welfare or trade protections, the tub-thumping socialists who own rental properties or sends her kids to private schools, the environmentalists who say “look at the science dude” over global warming, but seem blind to the science of fracking or vaccines, the sports people (or celebrities generally) playing for their country whilst funnelling their earning through the offshore.

    Having said all that, I’ve probably described nearly everyone, not just those who seek public office. I guess it would be very depressing if it wasn’t a little bit funny.

    Comment by Clunking Fist — June 26, 2015 @ 7:53 am

  55. Note to Tom Hunter, as with AGW, the jury on “Obambicare” (Medicare for the less-prejudiced) is no longer out.
    Your demolition of the planning strawmen would have been entertaining but for your defensive shrillness. In truth, some intellectual honesty would add straw to your bricks.

    Comment by paritutu — June 26, 2015 @ 7:55 am

  56. Oh, my favs are the guys vigorously pushing for state mandated heath systems & incentives/penalties & taxes, who smoke pipes, and the socialists who want everyone to be equal who wear turtle necks and drive European cars.
    Could the dumbest be the environmentalists who drive diesel cars?

    Comment by Clunking Fist — June 26, 2015 @ 7:57 am

  57. Knowing Key’s financial background and potential connections, he’d probably write a blank cheque to prop up the banks, like Obama’s ‘too big to fail’ approach to Wall St.

    Maybe not, is a NZ political party ever writing a blank cheque to cover the losses of Aussie banks?

    Obama did it to save Wall Street and apple pie. Would we do it to save the Sydney CBD?

    Comment by unaha-closp — June 26, 2015 @ 9:14 am

  58. An $11.4 million New York penthouse is something that has resonance outside of the political establishment. It’s at least as damaging as the flying sheep.

    Comment by Fraud — June 26, 2015 @ 9:23 am

  59. “Obambicare” (Medicare for the less-prejudiced) is no longer out …. In truth, some intellectual honesty

    Intellectual – a word that is worshipped around here as much as “planning”. Daniel used it the other day, “not intellectually serious”, and now this. It’s simply another tired, lazy form of dismissal without argument, as well being yet another form of self-congratulatory back-slapping.

    And in the same way that that comment was itself not intellectually serious, the one here – that the jury is out on Obamacare and that it’s just Medicare for the less-prejudiced – demonstrates a lack of the very thing it demands, intellectual honesty.

    Comment by Tom Hunter — June 26, 2015 @ 11:11 am

  60. Obamacare – stocks of US Health Insurance companies are doing very well.

    Comment by unaha-closp — June 26, 2015 @ 11:41 am

  61. CF: “quality of the individuals who put themselves forward for public duty.”

    Who could forget this priceless interview on The Nation last year…

    David Seymour: Lisa, you ask what people in Epsom are saying on the doorstep. What they are saying is that they want continued stable centre-right government, they want low taxes and no new taxes, they do not want a capital gains tax and they do not want to have their neighborhoods intensified with eight story towers next to their homes. And the kind of rates corruption that they get from Len Brown –

    Julie-Anne Genter: And this is interesting because this is supposedly the free market party arguing for regulation. Arguing for regulation, higher prices where land values are high, where people want to live.

    Seymour: No, what I’m arguing for is if the people of Epsom have bought into certain property rights and the character of their community. And when people buy –

    Read more: http://www.3news.co.nz/tvshows/thenation/interview-david-seymour-michael-wood-and-julie-anne-genter-2014060715#ixzz3e7V7mfFb

    CF: “Could the dumbest be the environmentalists who drive diesel cars?”

    It’s a tough call. Depending on who you ask, diesels are either the environment’s best friend, or its worst enemy.

    Comment by Kumara Republic (@kumararepublic) — June 26, 2015 @ 11:49 am

  62. Yep – as planned and why they supported Obamacare – and with huge consolidations of those companies to come. It will be an oligopoly to rival the Big Three car companies of the 1950’s – and with about as successful an outcome for the country as a whole. The huge insurers already were fairly shitty at innovation, whether their own or in the healthcare industry. But now they’ll be worse. Increasingly nothing more than ticket clippers for government spending, I see that one of the CEO’s said as much the other day, in admitting that their cashflow pipeline now lies more with government than with companies, let alone individuals.

    I doubt any of those CEO assholes ever heard the phrase, “We will hang the capitalists, and they will sell us the rope to do it.”, but their successors will, probably around 2025-2030, when the United Wellpoint Aetna Cigna Blue Cross company is reluctantly taken over by Washington D.C. – or perhaps by Goldman Sachs. People will call it socialism, and they’ll be right, and hate it. Others will call it capitalism, and they’ll also be right – and hate it.

    Comment by tom hunter — June 26, 2015 @ 11:59 am

  63. By NZ, Aussie, European & Canadian standards, Obamacare is only slightly better than what it replaces, because the Americans are starting from a near-zero base. What we call healthcare would probably be labelled raging Stalinism by Tea Party elements.

    Comment by Kumara Republic (@kumararepublic) — June 26, 2015 @ 12:03 pm

  64. Maybe not, is a NZ political party ever writing a blank cheque to cover the losses of Aussie banks?

    IIRC, the RBNZ compelled the major retail banks to incorporate locally to avoid this scenario.

    Also their Open Bank Resolution policy is designed – in RBNZs words – is “aimed at allowing a distressed bank to be kept open for business, while placing the cost of a bank failure primarily on the bank’s shareholders and creditors, rather than the taxpayer.”

    Unfortunately this means that the bank’s depositors take a haircut as there is no depositors guarantee scheme in existence in NZ.

    So yes, I personally have no doubt that the NZ subsidiaries of those Aussie banks would get a blank cheque but only after the RBNZ compelling them to ‘smash and grab’ depositors money.
    Either way, the customers and taxpayer gets fucked over as shareholders losses will be limited up to the fully paid value of their stocks, which is bugger all in such a highly leveraged business.

    One of the reasons I only hold debt with retail banks rather than wodges of cash.

    Comment by Gregor W — June 26, 2015 @ 12:14 pm

  65. The Herald website has a feature story on the Prime Minister right now. It’s not all cat videos, check out the real journalism they’ve got going on.

    Comment by sammy 3.0 — June 26, 2015 @ 12:51 pm

  66. “Unfortunately this means that the bank’s depositors take a haircut as there is no depositors guarantee scheme in existence in NZ.”
    So you’re saying you WANT taxpayers to bail the banks out?

    Comment by Clunking Fist — June 26, 2015 @ 1:17 pm

  67. The popularity of Key and National is only reflected in polls, which have been shown to include a high proportion of traditional National supporters. In reality, it’s a different story.

    Comment by Daniel Lang — June 26, 2015 @ 1:30 pm

  68. “The popularity of Key and National is only reflected in polls, which have been shown to include a high proportion of traditional National supporters. In reality, it’s a different story.”

    I vote this as comment of the year so far. Any other nominations?

    Comment by Tinakori — June 26, 2015 @ 1:35 pm

  69. So you’re saying you WANT taxpayers to bail the banks out?

    I think you should reread my comment.

    I would think the inference is pretty obvious; taxpayers will foot the bill regardless, given that (a) you’d be pretty hard pressed to find many taxpayers that don’t hold at least some of their assets in retail bank deposits and (b) most managed funds / Kiwisaver accounts are likely to hold some proportion of financial stocks.

    Comment by Gregor W — June 26, 2015 @ 2:13 pm

  70. As a side note, personally I think banks should take some of their enormous profits and self insure against default, as well as be compelled to provide depositors guarantee mechanism – say limited up to 50k per customer – as part of their banking license conditions.

    Comment by Gregor W — June 26, 2015 @ 2:17 pm

  71. Stupid spam trap. There are 3 possible scenarios I can think of after a worst-case scenario involving a bubble burst, and are based on recent history:

    No bailout at all: country plummets into a 2nd Great Depression, civil unrest ensues, perceptions of weak leadership are rife and lead to a swing towards hardline politics. In Greece, political extremists gained ground and the leftist SYRIZA wins. The logical extreme was the death of the Weimar Republic and the rise of the KPD & NSDAP, the latter of which seizes power at gunpoint.

    Bank bailout: The Govt guarantees the survival of the banks, but Main Street smells corporate welfare and starts asking why crooked bankers are more deserving than them. It’s the approach taken by Obama’s America, and it’s led to the emergence of the Tea Party and Occupy movements.

    Main Street bailout: The Govt in charge tells the bankers to go bugger themselves and own their losses, and instead guarantees the bank deposits and first homes of the public. Iceland is the most obvious example. Going back earlier, Roosevelt’s New Deal and Michael Joseph Savage were variants of this.

    Comment by Kumara Republic (@kumararepublic) — June 26, 2015 @ 8:09 pm

  72. The popularity of Key and National is only reflected in polls, which have been shown to include a high proportion of traditional National supporters. In reality, it’s a different story.

    That poll last November certainly had a lot of National supporters on the day. Admittedly it’s result was so similar to the sample polls held prior you couldn’t really trust its results.

    The Govt in charge tells the bankers to go bugger themselves and own their losses, and instead guarantees the bank deposits and first homes of the public

    Given we’ve now tested scenarios one and two in the last century, number threes looking pretty attractive for the next, sadly inevitable but hopefully far off, crisis.

    Comment by Richard — June 26, 2015 @ 8:58 pm

  73. banks should take some of their enormous profits and self insure against default

    Making profits is actually a really good way to self insure against default.

    Comment by Phil — June 29, 2015 @ 12:02 pm

  74. Making profits is actually a really good way to self insure against default.

    Agreed. But I strongly suspect banks would come with their hands out to the govt. if it all went tits up, as assets liquidated assets would head to senior debt holders; presumably some cross-held with other local financial institutions with the lion’s share serviced by offshore holders.

    It’s whether the govt. tells them to bugger off is the question.

    There would certainly be pressure on the govt. of the day to force the banks to make good on “mum and dad” deposits rather than follow through with the arguably more equitable policy – equitable in terms of risk that is – of letting the lesser ranked debenture holders (including depositors) without intervention, as they would with any other business. The trouble is most depositors you talk to would not regard their 2% on-call bank deposit interest as risky.

    I would like to think the Main Street bailout option in adopted, but I wouldn’t bank on it (excuse the pun).

    Comment by Gregor W — June 29, 2015 @ 12:50 pm

  75. “Banks should take some of their enormous profits and self insure against default”

    They already do in many cases, but what happens when the insurance companies and the hedge funds go belly-up as well?

    You cannot assume that adequate insurance will protect against defaulting. It depends very much on if customers repay their loans, which depends on whether they have employment, which in turn depends on whether employers have reasonable loans and lines of credit available to them in order to offer employment.

    One thing which will make it a lot easier to ensure that banks do not default is if the rate of fractional reserve lending is lowered. So if banks have $200million in long term deposits and can lend out $1.5billion, it’s more likely that they will default in hard economic times than a bank that has $500 million in long term deposits which has lent out $2.5billion.

    Comment by Daniel Lang — June 29, 2015 @ 12:56 pm

  76. They already do in many cases, but what happens when the insurance companies and the hedge funds go belly-up as well?

    Well, we’ve seen what happens in recent memory. The State steps in.

    One thing which will make it a lot easier to ensure that banks do not default is if the rate of fractional reserve lending is lowered.

    Sure, but this needs to be done slowly or all that cheap easy credit that we all love dries up rapidly which a bunch of knock on effects, most importantly in the consumer credit and housing market.
    Also, fractional reserve ratios are not really driven by however much a bank holds in long term deposits.
    They are driven by cash deposits which effectively become the property of the bank as soon as your pay goes into your savings or cheque account and turns on the banks liabilities balance.

    Comment by Gregor W — June 29, 2015 @ 1:15 pm

  77. When the GFC came about, NZ briefly had a deposit guarantee scheme that modelled the Aussie one, but it had a sunset clause and has since expired.

    Comment by Kumara Republic (@kumararepublic) — June 29, 2015 @ 1:35 pm

  78. @ GW, DL

    You guys have some interesting points that are worth further discussion but, please please PLEASE drop fractional reserve lending from your vocabulary.
    FRL is a term so devoid of meaning and contorted by its many detractors that it is entirely useless to this discussion – it fails to explain the creation and extension of credit so completely that it’s actively making you and I dumber just from reading it on our screens.
    Additionally, it falls apart because it disregards the fundamental accounting identity of “Assets = Liabilities + Equity”

    Comment by Phil — June 29, 2015 @ 3:42 pm

  79. “One thing which will make it a lot easier to ensure that banks do not default”

    another would be treating any govt bail out as a share purchase (maybe as non-voting shareholdings) –

    “you want US to help you? – well we will be asking for a share of your business in the form of dividends from here on in”

    Comment by framu — June 29, 2015 @ 4:04 pm

  80. Phil I wrote a reply but it got refreshed away.

    You’ll note I didn’t use the term “fractional reserve lending”. That honour goes to Daniel. I just didn’t go on to correct him because I got that he sort of meant reserve ratios, and that there is a relationship between cash on hand and total bank liabilities to cover cash demand.

    I also understand the concept off ex-nihilo money creation, albeit not the finer details of the mechanics of how it actually works. Feel free to explain it though.

    I was merely trying to point out that your cash is no longer yours when it hits your account and at that point you are a bank creditor, following on from earlier comments.

    Comment by Gregor W — June 29, 2015 @ 10:21 pm

  81. Also, the term “fractional reserve” has been ruined by the Alex Joneses of this world.

    Comment by Kumara Republic (@kumararepublic) — June 30, 2015 @ 2:05 am


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