Hard News: The Creepy Party
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The resulting over-production is eventually dumped with developing economies, badly damaging their own small producers.
You could certainly argue with that side of the equation, but the idea that we should subsidise primary producers is not wrong per se. It's what keeps a lot of cultures going that would have disappeared. And there is nothing demonic in a country acting to keep the cost of primary products for domestic consumption down.
(Disclaimer: some of my best family members are farmers, etc.)
Denis Welch is always good value on this one. Money quote right at the end:
And don’t tell me that New Zealand is subsidy-free: the
entire economy is predicated on capital being subsidized at
the expense of labour. -
Even though some of the stuff that went on under Muldoon was dumb, and I totally disagree with the social conservatism, ordinary people were better off in those days.
They were. But as a whole, the economy was speeding towards a brick wall.
Unemployment was trending relentlessly upwards (and that's not counting the unemployment hidden in the system), fiscal deficits were getting beyond our ability to manage them. Inflation in 1982 was over 16%.
Muldoon ignored Treasury advice to begin a gradual programme of reform -- much as the Australians did -- in favour of various crackpot policies.
I despise Douglas for his contempt for democracy. But I don't doubt that when Labour took office in 1984, to discover that Muldoon had been hiding a currency crisis, action had to be taken very quickly.
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You could certainly argue with that side of the equation, but the idea that we should subsidise primary producers is not wrong per se.
Even when the bulk of the money goes to large corporations? And poor countries are denied the ability to compete by rich countries? It's just mad.
This overproduction has massive environmental costs too. The CAP isn't just wrong. It's reached the point where it's evil.
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Gio, did you mean to write "Mouldoon?" Because if you did, bravo. I usually hate the nicknames we give politicians (like "Hyde" for Rodney Hide) but the "mould" in Mouldoon is brilliant.
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Guardian editorial from last month: Common agricultural policy: rotten but here to stay:
Everybody agrees the €50bn a year common agricultural policy is rotten. Everybody, in public, promises reform. Everybody, in private, is out for what they can get. The result is an economic and environmental disaster. Poor farmers struggle – as this month's report on hill farming confirmed – while rich corporations cream off the profits, especially sugar producers. They are the largest beneficiaries of all – €144m to St Louis Sugar in France, for instance, and €42.9m to German's Sudzuker ...
Everyone admits there has to be change, but they then disagree on what change means. The CAP is harmful as well as unfair in a multitude of ways. France, Spain and Germany thrive while poorer EU entrants in the east get less. It eats up half the EU budget, but its consequences often harm the environment. Farmers in the developing world also suffer, as last year's subsidised dumping of milk powder showed.
Attempts to steer money towards landscape management, rather than food production, must go further. The Commission for Rural Communities suggests cash would be better spent on producing peat carbon sinks than intensive sugar production. The CAP should be replaced by a smaller, targeted scheme serving green and social goals. One day it will collapse under the weight of its own illogicality. Sadly, there is no sign of it happening soon.
Gio, I understand the argument you're trying to make. But it's not based on the actual reality.
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Europe has that. In fact every other country in the world has that, pretty much. Are they all stupid?
What Russell said. Stupid, self-interested, selfish, and globally destructive. A lot of the sorry economic state of the third world can be traced fairly directly to the protectionist agricultural policies of the US and the EU. I'm glad that we can at least say, hand on heart, that we're not party to the depredation of the third-world subsistence farmers. How much foreign aid would we not have to contribute if it were possible for third-world farmers to actually make a living from their efforts?
Tax rates at 66%
What's the problem? If that bracket kicked in at, say, $750k would it really kill anyone? Stop anyone affording a roof over their head, food and clothing, education, transport? Of course not. Anyone affected would be able to afford a standard of living better than that available to well over 99% of the world's population, and better than at least 99% of the population of NZ, even before they got into that bracket.
High top tax rates aren't a problem, so long as they don't kick in until such a high level of income that the small percentage of the population paying them simply won't notice that they're only getting 34 cents in every extra dollar. The benefit to the country would be enormous.Peter, the problems are less with the policies of Rogernomics and more with the attitudes, and the policies that followed. The selling-off of Telecom (it was doing very well as an SOE, by all accounts), BNZ, NZ Rail, etc. All things that have ultimately had a very negative effect on NZ's economic effectiveness (well, excepting BNZ; the issue there was more the bail-out) over the long term. Busting unions and turning workers into economic units rather than partners in economic activity. That attitude came from the Rogernomes, but it was the acolytes who followed in the last National Government who really fucked us over. Roger simply opened the way, and also paved the road for a National Party full of objectionable functionaries to get into power because the electorate was so completely, utterly and heartily disenchanted with Labour. One of my lecturers told us of his grandmother's cheers at National winning the 1990 election: a grandmother who was a card-carrying member of the Labour party and had voted Labour at every previous election. The stories of people burning their membership cards are so rife as to be beyond mere anecdote. That is Roger's legacy, and how do you roll back an attitude?
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Even when the bulk of the money goes to large corporations? And poor countries are denied the ability to compete by rich countries? It's just mad.
I'm not saying they are implemented well, or not disproportionately in favour of corporations (what isn't?), I'm saying that they're not wrong in principle. And that I wouldn't want my country to just abolish them altogether. Implemented equitably, they're simply a form of redistribution. I'm okay with that.
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Peter, the problems are less with the policies of Rogernomics and more with the attitudes, and the policies that followed. The selling-off of Telecom (it was doing very well as an SOE, by all accounts)
The good: the proceeds of the sale were used to pay down public debt.
I covered the bad in A long post on telecommunications:
One of the most striking parts of the story is the then-Labour government's acceptance of an "undertaking" from Telecom's new management that it would "ensure that interconnection would be provided to competitors on a fair basis, and the relationships between Telecom companies would not disadvantage competitors." On this vague assurance, any mention of interconnection was left out of the Telecommunications Act.
It is difficult now to credit the stupidity of those who devised the policy. After Telecom was sold to Ameritech and Bell Atlantic (themselves, ironically the product of the greatest regulatory intervention in telecommunications history - the forcible break-up of AT&T in 1982) for $4.25 billion (the money was prudently used to retire external debt) in 1990, there was no way that its private owners would - or even should - have made any agreement not to their advantage.
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Gio, did you mean to write "Mouldoon?" Because if you did, bravo. I usually hate the nicknames we give politicians (like "Hyde" for Rodney Hide) but the "mould" in Mouldoon is brilliant.
I could claim to be witty rather than ignorant, and you would probably all believe me because you are such nice people. But you deserve better.
I despise Douglas for his contempt for democracy. But I don't doubt that when Labour took office in 1984, to discover that Muldoon had been hiding a currency crisis, action had to be taken very quickly.
Quite aside from the actual nature and gravity of the crisis, which is still a topic of debate, the problem is, what action? Faced with very similar crises, other countries (including mine) simply devalued their currency. It wasn't painless, but it was nowhere near as painful.
(And yeah, NZ had high inflation. So did the rest of world. It's nice that we no longer have it, but it's disproportionately nicer for the wealthy. And in the meantime the purchasing power of workers' salaries in the Western countries that put this fight at the centre of their platforms has crumbled.)
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I agree with you in one way Matthew, tax is not the issue, government spending is the issue. Tax is just the symptom.
Socialism believes that social good comes from increased government spending. That's why under labour government spending rose from 33 Bn p.a. to 66 bn p.a.
That would be fine if it works. It doesn't. Since Winston Peters became treasurer (which is when the rot started) more money has been thrown at government programmes than ever before in the history of NZ, and as a previous poster pointed out, things just get worse (and RD's reforms of 20+ years ago get the blame.)
edit: it was 20+ years not thirty.
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Socialism believes that social good comes from increased government spending.
Let me stop you there. That's a crude stereotyping of Socialism. Go back to Go. Do not collect $200.
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Tax is just the symptom.
That's a fine metaphor if you think that society is a disease.
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Quite aside from the actual nature and gravity of the crisis, which is still a topic of debate, the problem is, what action? Faced with very similar crises, other countries (including mine) simply devalued their currency. It wasn't painless, but it was nowhere near as painful.
The new Labour government did actually devalue the $NZ by 20% on July 20, 1984, three days after Muldoon had bragged in his last interview as Prime Minister that he had refused to agree to a devaluation, and a day after a massive run on the dollar. The bastard was doing us harm even in his final hours in power.
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Peter, if you want to debate the virtues of low taxation, with government staying the hell out of the provision of any services except external relations, criminal justice, official documents (DIA and Treasury/RBNZ), and defence, this is not a forum that will be sympathetic. We all believe that the state is obligated to provide healthcare, education, and all kinds of other social services, and to do so to a level at least roughly comparable to what the private sector can provide. That is what socialism is about.
Saying that "tax is a symptom" is, as gio says, to treat government spending like a disease. To those whose way of thinking is like Sir Roger's, that may well be so. To the vast majority of the occupants of PAS however, even including our token National member (there's one in every group), cutting state spending to the bone and then saying "Let the market sort it out" about the unequal quality of services available to the poor vis the rich is not how we view the world.
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Wasn't Roger Douglas in a left-wing party? Doesn't he still claim to be a socialist in some sense? I'm confused.
You're kidding, right? Or inhabiting some weird, bizarre-o, parallel universe
I thought it was common knowledge, Bro. Douglas' parents have been rotating in their tombs since '87
Douglas was born on 5 December 1937. His family had strong ties with the trade-union movement, and actively engaged in politics. His father Norman Douglas and a brother Malcolm Douglas both became Labour politicians.
Douglas received his secondary education at Auckland Grammar School, and gained a degree in accountancy from the University of Auckland.
See, there you go, accountancy is evil.
Accountants, creeps and Tax avoiders. -
The new Labour government did actually devalue the $NZ by 20% on July 20, 1984
Yes, the issue is what they did on top of that.
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To the vast majority of the occupants of PAS however, even including our token National member ...
I think you'll find Craig is gloriously ill-equipped to be a token anything.
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Steve, I knew he was in Labour, and probably peripherally knew that he was from a long line of "real" Labour-ites. It was more the "Doesn't he still claim to be a socialist in some sense?" that got me.
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I think you'll find Craig is gloriously ill-equipped to be a token anything.
Maybe, maybe not. You have to admit, though, he does fill the "flag-waving National member" niche for us with great panache.
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We all believe that the state is obligated to provide healthcare, education, and all kinds of other social services, and to do so to a level at least roughly comparable to what the private sector can provide. That is what socialism is about.
Moreover, the evidence in favour of private provision of those services is badly wanting.
But ... up until 1984, the state did own and operate a lot of commercial services in NZ that it really had no business in. I didn't have a problem with us getting out of those in favour of paying down our debts.
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Maybe, maybe not. You have to admit, though, he does fill the "flag-waving National member" niche for us with great panache.
He's broken ranks sufficiently for me to be confident he has his own mind and isn't afraid to use it. A failure as a flag-waver I'm afraid.
James fills the flag-waving niche for me, though I don't want to know which flag.
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I didn't have a problem with us getting out of those in favour of paying down our debts.
Like most things about the 4th Labour govt it's a story of "yes, but no, on the other hand, if....".
I'm also in favour of some of the things we got out of being sold.
But I wish they'd been sold to the highest bidder, and in some cases some sensible conditions had been included in the sale. Rather than selling to someone's mates for a quick buck to screw us all over.
I feel that nationalistic type tarriffs, like we had here have had their day, particularly since their major impact these days is shutting out poor third world farmers who could do with a bit more of a break. I'd like to see a sensible system of environmental tarriffs (if that's possible), to encourage people to buy things that haven't screwed up the environment in their production however.
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The selling-off of Telecom (it was doing very well as an SOE, by all accounts), BNZ, NZ Rail, etc. All things that have ultimately had a very negative effect on NZ's economic effectiveness (well, excepting BNZ; the issue there was more the bail-out) over the long term. Busting unions and turning workers into economic units rather than partners in economic activity. That attitude came from the Rogernomes, but it was the acolytes who followed in the last National Government who really fucked us over.
And now we have Paula Bennet telling the sick and injured that they must either work or starve whilst her cohorts cut funding to essential services. We used to have the railways, Power Boards, Meat works, Forestry, Radio and TV, Telecoms, Ministry of Works... the list goes on. All these organisations acted as a sink for surplus labour, it gave jobs to the rest of the country that wasn't employed by the private sector and maintained out infrastructure. That was until the greed heads decided that they should reap the benefits of our hard earned National assets.
Sure, it wasn't "efficient" but as a controlled internal economic system it provided a sense of belonging to a great deal of people, it gave them something to get out of bed in the morning for. Something other than fear.Association of Consumers and Taxpayers? Ah consumption, of course, we call it Tuberculosis these days, don't we?.
(On the subject of the BNZ bailout. The $650 million cost of the bailout was the same amount that Jenny Shipley took from the beneficiaries that time around.) -
James fills the flag-waving niche for me, though I don't want to know which flag.
Normal people don't salute that sort of crap, &c.
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What people outside Europe don't take into account are the events of the 20th century. Britain was nearly starved out of WW2 because of a reliance on imported food. Food was desparately short in continental Europe during the immediate post-war period.
This meant that food security has always been a key priority, even today. Growing surplus food locally is an insurance policy, and at $60bln, it's a cheap one for a continent with 16 trillion of GDP.
The world is very different for a country that has never seen its soil touched by global war and can grow way more food than its people will ever eat.
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