Polity by Rob Salmond

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Polity: Hosking’s right about jobs

88 Responses

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  • Steve Barnes, in reply to andin,

    How about working together for a common goal, the future we are creating by our present actions for our future generations.

    Well yes. Our forefathers did that. They invented, improved and discovered all kinds of things to make life easier, to make the working week shorter, to increase leisure time, to make life “Better”.
    What happened? The greedy purchased the means of production and the poor lost their jobs. Then they had the audacity to claim that the unemployed were taking their “hard earned money” and they should get a job, for as small a wage as possible because we don’t need the poor anymore we have machines, or cheap offshore labour to make our toys now.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Rich of Observationz,

    This reminds me of Harold Macmillan's quote:

    “I am always hearing about the Middle Classes, What is it they really want? Can you put it down on a sheet of notepaper, and I will see whether we can give it to them.”

    The trouble with this sort of approach, now modernised as "data-driven policy" is twofold:
    - National will do exactly the same thing, and given that they own the media, will come across as being better able to implement said policies.
    - Should Labour actually get elected and implement these policies, they will fail in exactly the same way as for National (and presumably Labour will only have been elected because things have stopped going well for Key).

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Kumara Republic,

    Does the term "jobless recovery" come to mind? Especially with scientific and economic commentators increasingly speaking of the "Luddite Fallacy" becoming less of a fallacy with each passing day.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Joe Wylie, in reply to Steve Barnes,

    they should get a job, for as small a wage as possible

    Not to mention all that welfare they're sucking up. Roger Douglas plans on having a chat about that to his former soulmates seeing as they've invited him to dinner:
    "I'd like to talk to the odd one about the big crisis facing New Zealand with the welfare system, which is getting far too costly. I know National won't do anything about it so I'm hoping Labour will."

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Rosemary McDonald, in reply to Joe Wylie,

    they’ve invited him to dinner:

    What might be on the menu?

    Slow cooked superannuitant?

    Deep fried lean cuts of unemployed youth?

    Lightly sauteed brain of has -been economic despot?

    Waikato, or on the road • Since Apr 2014 • 1344 posts Report Reply

  • Joe Wylie, in reply to Rosemary McDonald,

    What might be on the menu?

    When it comes to recipes, Roger's been known to channel the spirit of Aunt Daisy.

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Sacha, in reply to Joe Wylie,

    they've invited him to dinner

    another spectacular misjudgement.

    Ak • Since May 2008 • 19707 posts Report Reply

  • Joe Wylie, in reply to Sacha,

    another spectacular misjudgement.

    They've also invited Michael Bassett, who unlike Jim Anderton will be attending. The very same Michael Bassett who wrote a glowing review of Brash's Orewa speech, and later gloatingly revealed that he'd written most of it. You really couldn't make this stuff up.

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • linger, in reply to Sacha,

    another spectacular misjudgement

    Yah, of the “step away from the festering corpse” variety. On what planet is any continuing association with Douglas not an obvious electoral weapons-grade biohazard?

    @Joe: It appears Labour can make this kind of stuff-up ...

    Tokyo • Since Apr 2007 • 1929 posts Report Reply

  • Sacha, in reply to Joe Wylie,

    I was severely tempted to run him over one day as the sour old bastard put his wheelie bin to the kerb as I happened by. Such a destructive arsehole.

    Ak • Since May 2008 • 19707 posts Report Reply

  • Jim Cathcart,

    I'm going to be a little disruptive here about unemployment. Since the GFC, global capital has been on the hunt for a home where interest rates are high, therefore the Aussie banks have been on a roll with wholesale funding that they can flash at property speculation, which has been on a tear in Auckland, Sydney, and Melbourne (and until quite recently Perth). Where you have property bubbles, you also higher discretionary spending, which supports employment and wage growth.

    Regardless of political leadership, this would have occurred anyway because of economic orthodoxy and our reliance on persistent current account deficits.

    Since Nov 2006 • 228 posts Report Reply

  • Sacha, in reply to Jim Cathcart,

    which supports employment and wage growth

    but that's not what we're seeing, is it?

    Ak • Since May 2008 • 19707 posts Report Reply

  • linger, in reply to Jim Cathcart,

    Where you have property bubbles, you also [have] higher discretionary spending

    by the small minority of the population actively involved in property speculation -- which does not support growth in employment or wages for the majority. Invoking the thoroughly discredited "trickle-down" theory is just taking the piss.

    Tokyo • Since Apr 2007 • 1929 posts Report Reply

  • Rosemary McDonald, in reply to Joe Wylie,

    When it comes to recipes, Roger’s been known to channel the spirit of Aunt Daisy.

    Many thanks for that Mr. Wylie...we were in need of a good laugh. :-)

    Waikato, or on the road • Since Apr 2014 • 1344 posts Report Reply

  • Jim Cathcart, in reply to linger,

    No. As house prices rise, people tend to consumer more, particularly if they own their own homes. Speculation is simply driving up asset prices, but the "wealth effect" is felt by others, regardless if they're speculating or not.

    Since Nov 2006 • 228 posts Report Reply

  • linger,

    Still struggling to see any nett benefit for most people. Unless you take out a reverse mortgage or suchlike, or cash up and move to a cheaper suburb, an increased property value doesn’t affect actual cashflow. Without such measures, any perceived “wealth effect” from the value of one’s own residence is at best short-term: rates, following property values, go up faster than income does, reducing available income for discretionary spending. Meanwhile, those who don’t own their own homes (=currently 40% of NZers) have significantly less income for discretionary spending as their rent increases. Because the really important thing about a property bubble is that increases in income do not -- and cannot -- keep pace; so most people go backwards in real terms.

    Tokyo • Since Apr 2007 • 1929 posts Report Reply

  • Jim Cathcart, in reply to linger,

    The wealth effect was first hypothesized by Robert Schiller, who stands apart as one of the more respectable behavioral economists of our time. What you are saying is quite right, but that's not how people actually think during bubbles. It also works in the other direction, when asset prices crash. And this is a scenario that the govt is terrified of. Take a look at Australia and ask yourself why the govt offered first home buyer grants after the GFC. When houses become such a dominant part of your economy and a financial./ savings instrument, it becomes far too important for the wider economy, particularly in consumer-driven societies like NZ's.

    Since Nov 2006 • 228 posts Report Reply

  • Swan, in reply to Rich of Observationz,

    Well, Labour: one of the main reasons for unemployment is that interest rates are set too high for the real economy, the reason they have to be high is to stop Auckland house prices rising faster that they are already, and the reason house prices are rising is that income from house price speculation is tax free.

    I agree interest rates are too high. Inflation figures have repeatedly undershot their target over many years. If the reserve bank is keeping interest rates high because of house prices, they are going way outside what they should be doing. There mandate is to keep inflation at the midpoint of the target band. If they are worried about the effects of high house prices on financial stability, which they appear to be, they have plenty of effective options other than killing the real economy, including setting capital requirements for the banks.

    So labour could say they will sack the governor and get in someone competent, or perhaps move to a level target. So they have options in that space, I think the cgt is a red herring here.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

  • Dismal Soyanz, in reply to Jim Cathcart,

    The wealth effect from housing is pretty weak in NZ. House price inflation benefits only those who are downsizing. So while case can be made that all those Auckland retirees moving to Tauranga might be spending more, those trying to get their first home will be worse off.

    Wellington • Since Nov 2010 • 310 posts Report Reply

  • william blake, in reply to Swan,

    I am no economist but we have the lowest interest rates since 1964, so where are the new industries looking to employ people in full time work?

    MH is only half right about jobs being a critical issue, it’s the quality of jobs, not casualised, part time; working in poverty.

    Since Mar 2010 • 380 posts Report Reply

  • Rich of Observationz, in reply to Sacha,

    I think they invited everyone who has ever been a Labour MP - really, they only had the choice of doing that or restricting it to those who have always been in the party - otherwise they'd have to make a value judgement about each of the renegades.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Sacha, in reply to Rich of Observationz,

    understood, but if they had expelled them from the party it would have been easy not to invite em.

    Ak • Since May 2008 • 19707 posts Report Reply

  • Rich of Observationz, in reply to Sacha,

    Have there been any expelled MPs over the years? I thought they all walked. I don't think anyone's ever come back though, unlike the Nats revolving door with ACT.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • BenWilson, in reply to Rob Salmond,

    For what I hope are obvious reasons, I won’t be sharing the specifics of that information publicly.

    Well, I can guess what the reasons are anyway. The Colonel doesn't give away his special blend of 11 herbs and spices to just anyone.

    There are, of course, people who aren’t unemployed but are underemployed or insecure in their employment.

    Of course. For most major combinations of demography and opinion there are some examples of people like that. But I was hoping to get an idea of any particularly significant groupings. Or, if none have been found, to at least know that, in which case the shotgun approach is all that's left. But I find that hard to believe - there are clusters of opinion that go together and segmenting the targeted audience makes a lot of sense, if only because the political messaging budget only goes so far.

    An easier question might be: Are there any groups that don't rank jobs as one of their highest concerns? Or is this kind of messaging literally doomed to be something that just has to be hammered out to everyone?

    I'm thinking that, for instance, foreign students may not really care that much about jobs here, or more specifically they may not in general care about joblessness. Expats abroad could be in the same boat, unless they're looking to return home, in which case it's the exact opposite.

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • Swan, in reply to william blake,

    The actual interest rate alone doesn't determine whether or not monetary policy settings are appropriate for a given situation. An OCR of 4.5% might have been too low in the mid naughties, just as an OCR of 3% has proved to be too high recently. We have had low inflation for I think about 6 years, and similarly high unemployment. Therefore, monetary policy has been too tight.

    Note that the RB hasnt ever said that they expect inflation to remain low and unemployment to remain high. They have always been predicting, with their policy settings, a swift return to target inflation. They have been wrong for 6 odd years now. They have had to reverse interest rate rises they made twice in that period.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

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