+1 In much the same position myself
It’s always been my view that a pervasive middle class is about the closest capitalism can ever get to socialism. It offers the best chance for people to work in, and live lives that aren’t all about the money.
Robert Reich agrees.
Someone said that 50% of our most recent NZ residential bubble would have been removed by a CGT. Can't remember where, but recent.
I first heard that via Bernard Hickey I think, but the recent mention was a Tapu Misa column on Monday:
And the Government's own Savings Working Group has also pointed out that 50 per cent of our housing bubble (larger than bubbles in the US, Australia and the UK) was due to the lack of a capital gains tax.
Robert Reich agrees
Is it now? To me, it shows all the embarrassing limitations of the idea of equality for Social Democrats, which is nicely matched by Labour’s current rhetoric. What Counts Is The Middle Class. Of course if you spoke to a leftie in 1980 you might find they had more ambitious ideas about social justice.
It explains concisely something about economics and politics to an audience broader than marxist academics. I'd love to see more of that (especially from lefties).
Yes, the explanation part is good. It’s the final sentence that is abhorrent.
I agree with you, but he is speaking to an US audience, on economic oppression and not social justice. And the visuals are good. For an NZ audience how about this little chat from the the Spirit Level people?
All this talk of a bubble or contribution to 50% of a bubble, is basically nonsense??
I wouldn’t put much reliance on any analysis or regurgitated press release placed in print and penned by Tapu Misa.
The Saving Working Group - which a treasury based think-tank thang released a report thang titled "Saving New Zealand: Reducing Vulnerabilities & Barriers to Growth & Prosperity".
In it they had a bullet point as follows:
Steps must be taken to prevent a repeat of the unsustainable and damaging boom of the last decade, which resulted in a large increase in New Zealand’s debt, much of which went into housing and a “bubble” in house prices. The SWG estimates that the tax system bias in favour of housing caused about half of the increase in house prices, with serious implications for affordability. Moreover, the boom boosted investment in housing rather than investment in more productive assets that would have lifted productivity and potentially lifted exports.
This assumption was not supported by anything much - and I ask if it was an unstainable boom - which it wasn't - then why hasn't the bubble burst, especially following the GFC and the wage recession of the last three years?
The bubble hasn't burst largely because it wasn't a bubble - the available residential housing does not meet the demand and with the “recession” the gap has only increased.
Of course non of the members of the Savings Working Group or anyone working for Treasury is going to be overly concerned with this – they are likely well insulated enough not to suffer the slings and arrows.
I would say the serious implication for affordability in housing is that the supply of housing hasn’t kept pace with demand - the nation needs to seriously make a larger investment in residential housing.
Looking at pithy little phrase, “Reducing Vulnerabilities & Barriers to Growth & Prosperity" - I feel not being able to afford a home is a barrier to growth in the economy and barrier to ones future prosperity.
IMHO - Much of the basis for the support for a CGT is what I would call stuck-up, comfortable half-witted middle class twaddle that makes me ill. I have found anecdotally a lot of the supporters are comfortably well off- having in essence not fully contributed to tax in over a decade as a result of WFF – and that would also extend the opponents.
A CGT won’t revive the economy, won’t shift investment into productive assets that would have lifted productivity and potentially lifted exports.
I note they say:
would have potentially lifted
A CGT won’t translate to growth and isn’t a substitute for supporting the people or types of concerns that are vital to growth in the economy – which is where I see the leadership and emphasis needs to be concentrated.
There is nothing like a potential that would have been achieved expect for the excuses placed in the way. It is a nothing.
'Middle class' in the US doesn't translate at all cleanly to 'bourgeoisie' or exclude the 'Working class'.
But yeah. There is a huge 'underclass' in the US that Reich doesn't mention.
I don't think that's deliberate callousness. He's an economist, and his particular schtick at the moment is that great and growing wealth inequality and weak govt intervention is bad for the (capitalist) economy- and any hope for a recovery of same. He makes a good case for that.
Whatever his position on social justice.
I don't think that Robert Reich actually agrees or disagrees with Ben's view - though what he says is relevant generally to the fallacious "management of the economy".
A lift in wages and better equality in employment relations are some of the things that really need to happen in NZ – back pay being a legal right under collective bargaining just one place to start.
It makes me sick when I see people like Infratil getting their hands on the NZ Super Fund to help them buy the NZ Shell network - Yet one of their subsidiaries has stuffed around a group of workers who have been trying to get a collective agreement signed off since 2007 and these workers remain at that same 2007 wage rate.
We are all striding off to a better future “Z”. ..................................for Infratil.
Thinking more about Farrar's table I think it's disingenuous because it shows a snapshot in people's life - real people don't stay in the same earnings bracket for all their lives - people's lives follow a natural arc - my son's at Uni, he earns very little and gets lots of govt support - but chances are he'll end up middle classish later on, earn a lot more, pay more tax, claim fewer benefits from the govt, then he'll retire, earn less, pay less tax, be more likely to be ill, get a bit back of what he's put into the tax system.
If you want to see if a system is fair in the way Farrar and his employers are claiming I think you really have to look at the sum of someone's whole life not just the individual stages along that journey