General Debate 19 March 2009

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OECD rank 22 kiwi

Yeah right:
Spend tax cut or give it to the needy: PM

As if.

Whose money is it anyway? No sooner does the government give a few cents back to the hard trodden taxpayer and they’re directing them how to spend that money.
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March 19, 2009 8:25am
Inventory2

It’s interesting OECD – have a read of Armstrong’s piece in the Herald this morning, and he actually reckons that Labour and the Greens will be pooping bricks at the message behind what Key was saying yesterday – less government

http://keepingstock.blogspot.com/2009/03/armstrong-on-charity.html
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March 19, 2009 8:31am
OECD rank 22 kiwi

National playing silly buggers again:
Nats out to sink 3-strike law, says Act MP

John Key must be really keen to move on to other horizons from that of Prime Minister.
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March 19, 2009 8:31am
greenfly

John Key looked unwell on tv last night (not being critical David, it’s just an observation) especially beneath his eyes. Because I care.

[DPF: And you wonder why everyone calls you a troll. Pitiful]
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March 19, 2009 8:51am
Inventory2

perhaps greenfly, that’s because he’s a human being, with the normal human frailties rather than a manufactured political machine such as his predecessor was. But your concern is touching 😉
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March 19, 2009 8:56am
senzafine

Agreed Greenfly.

Its good to see that our PM is working hard. 🙂
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March 19, 2009 9:15am
getstaffed

Yesterday my daughter came home from school and said that this year’s field trip to an airport, complete with some flying theory and a trial flight with some time on the controls, has been cancelled due to the high levels of OSH form filling required. Apparently this kind of experience is all together too risky. I know what these forms are like… absolutely torturous to complete and clearly designed to transfer risk rather than to increase safety.

I was interest in this headline then: Cushioned lives ‘holding back kids’.

Have to say I agree with the expert on this one. Our culture of blame (i.e. having to find someone to blame for every incident) has created a sterile environment where people cover their own asses, deflect risk and deprive kids of the opportunity to play, fail, get up, grow… and try it all again.
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March 19, 2009 9:20am
racer

As in a post from the other day, Who else would like to see a return too the privy council?

My 2 biggest reasons:

New Zealand is a bloody small place, you can hardly go anywhere it seems some times, without meeting someone who knows someone that you do, the small number of big cases here means the wide spread publicity they get leaves noone without an opinion formed, and half the time you know someone who knows some one involved, ect. I just think the privy council, being so separated from NZ is better able to look at the facts alone without prejudice, and examine the evidence on its merits alone.

Secondly, what better way to save money during a recession than have the English pay for our top court?
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March 19, 2009 9:42am
Murray

John Key looked unwell… is that it? Thats the best you can do? Take a bloody pay cut you useless bugger.

Jesus there was a time when trolls had some fire and drive and were actaully FREE! Not party funded mouth pieces.
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March 19, 2009 9:54am
xy

Interesting to see the ‘john key is looking unwell’ line starting here too. Someone has definitely been watching Dr Who.
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March 19, 2009 9:54am
Glutaemus Maximus

Helen Clark only ever looked demonic around and in the eyes.
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March 19, 2009 10:03am
expat

You’d be unwell if you’d inherited a country fucked by Kullen & Klark.
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March 19, 2009 10:03am
expat

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10562471

so both the Police and HNZ ‘accidentally’ leave sensitive docs with the tosspot bludging gang members of Pomare Cres.

WTF is going on there.
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March 19, 2009 10:04am
wreck1080

With all due respect to John Key, if I had 50 million in the bank I’d give more to charity too.

The PM needs to cap rising costs first.

The tax cut has already gone for me. The power company increased prices by 7%. I think, gas is to go up shortly….. and, my income is dropping at the same time (directly attributable to the global recession).

So, even with tax cuts I will be worse off, only, a little less worse off than had they not gone through.
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March 19, 2009 10:09am
greenfly

expat – that’s probably one of the things contributing to Key’s slightly cadaverous look.
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March 19, 2009 10:10am
goodgod

John Key was addressing a philanthropic society when he made the charity comments. But that didn’t stop Comrade Harold form taking them out of context for general consumption. Charity begins at home.

An increase in the intensity of a gym routine can make someone look cadaverous for few days. I suspect that is what it is, aphid. John Key: healthy, wealthy.
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March 19, 2009 10:26am
greenfly

goodgod – I think you’re right. Bill English looks the same and I know he’s spending time in the gym. Produces a kind of worried look around the eyes. Perhaps they both need to eat more healthily. I recommend organic.
Can’t help but wonder why you left ‘wise’ off your description of Key. Have you reservations goodgod?
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March 19, 2009 10:31am
jacob van hartog

Referring to the ‘Helen’ headline that wasnt.

How about this one . About the only person in parliament convicted of being a liar

Hon Dr Nick Smith: Yeah, right!

Hon Dr Michael Cullen: —now going to call Mr Russell a liar? “Yes, that’s right.”, says Dr Nick Smith, the only person in this House convicted by a court of being a liar.

Hon Bill English: I raise a point of order, Madam Speaker. I think you know what the point of order is, Madam Speaker. Earlier on you pulled up my colleague Rodney Hide for using that term. I would have thought you would pull up Dr Cullen for the same reason.

Hon Dr Michael Cullen: Dr Nick Smith was convicted of contempt of court, and the judge made some lengthy comments about the fact that he did not regard any statement made by Dr Smith as at all reliable.
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March 19, 2009 10:48am
Manolo

greenfly said: “Because I care.”

To be filed alongside that common phrase from Whoar: “Because I work hard”. Ripley would be proud.
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March 19, 2009 10:48am
Glutaemus Maximus

AIG, RBS, HBOS, Northern Rock, and numerous other banks or insurers propped up at phenomenal cost to the tax payers.

Guess it had to be done.

However these bonus payments confuse the life out of me. And the pension rights seem to be well over the top.

So, they are legally binding contracts?

FFS, how can any employment contract pay servants and officers of the company under catastrophic losses?

Every bonus arrangement that I have ever seen was performance related, and had a bunch of caveats about non-payment in respect of adverse market conditions, below par performance, dodgy commission claims etc.

HTF can these bastards be legally secure when it went so wrong.

Surely they should be paying bonus’s back for the 5 years prior, when they were all playing pass the parcel with toxic financial wraps.

The Auditors should be sued for incompetence, and the Directors jailed for signing off fraudulent accounts.

In any event those bonus payments should be taxed at 100% on anything above 100kUS and 50% below. Reverting back the 5 years.

Some commentator said it is required to pay the bonus to retain the executives. Why? They were fucking useless. And reckless with others money.

As for Bernie Madoffs wife and family. They should use anti terrorism legislation to recover all the assets. He put the economy at risk, by destroying confidence.
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March 19, 2009 10:51am
slightlyrighty

While welfare does have a role in any society, I do have to wonder about it’s effectiveness when we have examples such as this one

http://www.dailymail.co.uk/health/article-1162503/The-real-telly-tubbies-X-Factor-failures-83-stone-family-claim-simply-fat-work.html

Is the welfare system too PC to state the bloody obvious in this situation? Has the NZ system been headed down the same path?
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March 19, 2009 10:58am
getstaffed

JVH – is lying wrong only when the liar is convicted… or is it intrinsically/morally/ethically wrong?

That’s the trouble with you socialists – lying appears to be a regularly activity, and an acceptable way to achieve an outcome. It’s the getting caught that’s wrong. Which makes you morally bankrupt and unsuitable for any form of public office.

I contend that lying is wrong. Absolutely wrong. And the former ringmistress of our Socialist Circus was NZs liar par excellence.

It was all about trust. And that’s why you’re in opposition.
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March 19, 2009 11:06am
racer

Its the Ian Wishart school of truth, if you haven’t been taken to court for saying it, it must be true.
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March 19, 2009 11:14am
mattyroo

Anybody see the poll on the herald website today?

It asks “Which use of tax cut money would most benefit the economy?”

The options are;
Spend it
Save it
Give it to charity

The ignoramus’ at the herald completely miss the elephant in the room…. PAY DOWN DEBT…. Nobody ever said they were bright though.

Everybody that receives a tax cut that has debt has to put all of that money into getting rid of that debt. With falling asset prices and fixed levels of debt, we are rushing headlong into a greater calamity if people don’t. The great debt deflation trap. If they don’t, they deserve everything that is coming to them anyway, they were the twits that over-leveraged themselves to get into that must have at any cost house.

Bang head against wall!
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March 19, 2009 11:29am
burt

Goff on Breakfast this morning claimed that Helen Clark never referred to the west coasters as feral inbreds. Of course Phil, she never called the exclusive brethren chinless scarf wearers or a weird and dangerous sect either and hey…. Cullen never called Key a “rich prick” either.

Naughty naughty VRWC, next thing you know the VRWC will get real school boy about all this and make some pathetically stupid statement like “we won you lost – eat that”.

Bloody Labour need to stop trying to re-write history to suit their agenda, they had their chance at that when the retrospectively validated 14 years of an unknown amount of spending to keep Clark out of court. You would think they would know better than to deny recent events that were covered in detail in the media, in blogs and even in parliament itself. Muppets…. (aka socialists)
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March 19, 2009 11:32am
Matthew Holloway

The comments on this story are interesting…

http://www.thestandard.org.nz/s92a-opportunists-jumping-on-the-bandwagon/
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March 19, 2009 11:39am
Inventory2

To be fair burt, I think that the “chinless scarf-wearers” slur was the work of Trevor Mallard, so in that regard, Clark is merely guilty of guilt by association. But you’re right – Goff is certainly trying to rewrite history, and no amount of beer consumed at the Blackball Hilton (paid for by the taxpayer, no doubt) should be enough for the sins of the past to be forgotten or ignored.
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March 19, 2009 11:55am
goodgod

burt (2512) Vote: 3 0 Says:

March 19th, 2009 at 11:32 am
Goff on Breakfast this morning claimed that Helen Clark never referred to the west coasters as feral inbreds.

I’m surprised he answered that question. It’s a variation on that great leftist accusation, “have you stopped beating your wife?” The media are getting brave now Helen can’t touch them. 😆
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March 19, 2009 12:37pm
burt

I2

So Mallard is another one on the “must resign in the best interests of saving the party” list then ?

It’s astounding how shallow the pool of talent in the Labour party became under the Clark dictatorship.
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March 19, 2009 12:51pm
burt

racer

I somebody published a magazine article saying that “burt” was involved in regular events where underage girls were having sex with a police dog I think I would deny it if it were not true.

Conclusion – Cullen was too bloody scared to deny it and risk taking it to court – why ?
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March 19, 2009 1:01pm
XChequer

On a more serious note, sad to see Natasha Richardson has died. A beautiful and wonderful actress, you can’t help but feel for her Husband, Liam Neeson, and her two boys.

And from falling over at a ski field. Sometimes it all seems a little arbitary.

XChequer
http://www.thenzhomeoffice.blogspot.com/
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March 19, 2009 1:31pm
llew

Yeah, that is very sad.
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March 19, 2009 1:43pm
getstaffed

The media are getting brave now Helen can’t touch them

Absolutely. One can sense the Lilly Livered ones proudly growing balls with each new article. It’s quite pathetic really.
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March 19, 2009 1:43pm
PhilBest

Glutaemus Maximus, read THIS:

http://online.wsj.com/article/SB123725551430050865.html#mod=djemEditorialPage

“The Real AIG Outrage”

This is a case of “told you so”.

$120 billion of the $173 billion taxpayer bailout money to AIG, went out to Derivatives Counterparties that they owed this money to.

This isn’t “recapitalisation”, this is wealth transfer from the taxpayer to clever investors.

Obama and the Dems are frantically trying to focus the people’s attention on executive bonuses.

But as the Wall Street Journal says:

“……we’re also starting to wonder exactly which system American taxpayers are paying to protect. It’s not capitalism, in which risk-takers suffer the consequences of bad decisions. And in some cases it’s not even American. The U.S. government is now in the business of distributing foreign aid to offshore financiers, laundered through a once-great American company.

The politicians also prefer to talk about AIG’s latest bonus payments because they deflect attention from Washington’s failure to supervise AIG. The Beltway crowd has been selling the story that AIG failed because it operated in a shadowy unregulated world and cleverly exploited gaps among Washington overseers…..

“………contrary to media myth, AIG’s infamous Financial Products unit did not slip through the regulatory cracks. Mr. Polakoff said that the whole of AIG, including this unit, was regulated by his agency and by a “college” of global bureaucrats.

But what about that supposedly rogue AIG operation in London? Wasn’t that outside the reach of federal regulators? Mr. Polakoff called it “a false statement” to say that his agency couldn’t regulate the London office.

And his agency wasn’t the only federal regulator. AIG’s Financial Products unit has been overseen for years by an SEC-approved monitor. And AIG didn’t just make disastrous bets on housing using those infamous credit default swaps. AIG made the same stupid bets on housing using money in its securities lending program, which was heavily regulated at the state level. State, foreign and various U.S. federal regulators were all looking over AIG’s shoulder and approving the bad housing bets. Americans always pay their mortgages, right?……”

It is high time to get the FACTS out and stop the B.S. spin from opportunist socialist politicians.
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March 19, 2009 2:45pm
gd

PhilBest IMHO the real failure that lead to the catasrophe was one of governance.

The Federal government failed to set up and support the necessary agencies to counter the financial sectors exhuberance.

This is about human nature As I keep reminding folks Its wasnt the little green men from Mars that caused this to happen.

The Regulators for their part didnt pressure the Government for the resources to do the job they should have been doing. These were human resources and more importantly quality regulation that allowed the ethical and moral to operate but caught out and punished the unethical and immoral Think Bernie Madoff

Quality regulation backed by well resourced prudential audit process would ahd should have detected Bernie right from the get go.

And the final part of this toxic Trinity were the bankers and financial “Masters of the Universe” they are the real crooks. They knew what they were doing and the outcomes and ther persisted for self interest and greed.

As a VVRW supporter nothing less than hanging drawing and quartering will satisfy me as regards these pond life.

they have set the cause of freedom and the capitalist system back and must be made an example of.
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March 19, 2009 3:16pm
cha

PhilBest, of course you’ll dismiss this as socialist claptrap but it may interest you.

Respectfully, you guys are totally misunderstanding something crucial in the AIG bailout: Derivatives claims are not stayed in bankruptcy. (Yet another brilliant innovation from the 2005 bankruptcy reform legislation.)

If AIG were to go down, derivatives counterparties would be able to seize cash/collateral while other creditors and claimants would have to stand by and wait. Depending on how aggressive the insurance regulators in the hundreds of jurisdictions AIG operates have been, the subsidiaries might or might not have enough cash to stay afloat. If policyholders at AIG and other insurance companies started to cancel/cash in policies, there would definitely not be enough cash to pay them. Insurers would be forced to liquidate portfolios of equities and bonds into a collapsing market.

In other words, I don’t think the fear was so much about the counterparties as about the smoking heap of rubble they would leave in their wake.

Additionally, naming AIG’s counterparties without knowing/naming those counterparties’ counterparties and clients would be at best useless, and very likely dangerous. Let’s say Geithner acknowledges that Big French Bank is a significant AIG counterparty. (Likely, but I have no direct knowledge.) BFB then issues a statement confirming this, but stating it was structuring deals for its clients, who bear all the risk on the deals, and who it can’t name due to confidentiality clauses. Since everyone knows BFB specialized in setting up derivatives transactions for state-affiliated banks in Central and Eastern Europe, these already wobbly institutions start to face runs. In some cases this leads to actual riots in the streets, especially since the governments there don’t have the reserves to help out. If you’re Tim Geithner, do you risk it? Or do you grit your teeth and let a bunch of senators call you a scumbag for a few more hours?

socialist claptrap
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March 19, 2009 6:17pm
cha

Forgot to include this in my previous post.

Propping Up a House of Cards
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March 19, 2009 6:32pm
PhilBest

cha, in a way we are arguing past each other. I appreciate you links you have provided, I regard the substance of what those articles are saying as very helpful.

My beef with the way this crisis has been spun, is that it was the result of “deregulation”. This is nonsense. There were thousands of regulatory agency staff with budgets in the billions, watching over the shoulders of the operators on Wall Street, and signing off on all of them.

As Joe Nocera says in that excellent NYT article you link to:

“……Why would Wall Street and the banks go for this? Because it shifted the risk of default from themselves to A.I.G., and the AAA rating made the securities much easier to market. What was in it for A.I.G.? Lucrative fees, naturally. But it also saw the fees as risk-free money; surely it would never have to actually pay up. Like everyone else on Wall Street, A.I.G. operated on the belief that the underlying assets — housing — could only go up in price.

That foolhardy belief, in turn, led A.I.G. to commit several other stupid mistakes…..

“……..It’s not as if this was some Enron-esque secret, either. Everybody knew the capital requirements were being gamed, INCLUDING THE REGULATORS (my emphasis). Indeed, A.I.G. openly labeled that part of the business as “regulatory capital.” That is how they, and their customers, thought of it…….”

I agree 100% with that assessment.

What I want to know is, how can anyone say this was the result of “deregulation”? It makes no difference at all whether there were 10,000 regulators or 100,000, if they all fail to pick the fatal error that the companies they are regulating, are making. If anything, this is an exposure of 2 or 3 decades of leftwing dumbing down and de-moralizing of society.

This is the fatal flaw in all regulation and government interference in markets. The belief that the market is “regulated”, or being overseen by intrusive regulatory agencies, leads to widespread moral hazard. In these circumstances, it really IS the sole responsibilty of the regulators, not the agencies being regulated, to foresee and avoid these crises. Those being regulated fall into a fatal mindset where they cease to think of the risks or consequences, because the government has appointed someone else to do that.

Another crucial contributor to this crisis, was the role of Fannie Mae and Freddie Mac: Government Sponsored Entities. Not only were they mandated to buy subprime mortgages from banks to help the program of “socially responsible lending” and home ownership forwards, but their implicit government guarantee meant that they could crowd other operators out of the capital markets; latterly, they were so big that they were a bigger component of those markets than the US Treasury itself was. A huge “carry trade” had formed around the borrowing of extremely low interest capital created by the Central Bank and investing this in the GSE’s in the belief that they were “low risk”.

It is impossible for anyone of reasonable intelligence who knows the facts, to conclude anything other than that this crash was made by government.

There is a whole sector of the economics and financial advice professions that DID warn what was going on for years, and nobody listened to them. Nobody is listening to them now, when they are saying that the bailouts and the various government interventions that are going on will actually do more harm than good; YET AGAIN.

It is ironic that it is the “big government” leftwing types who have no difficulty with more than one generation of everyman taxpayers, being landed with the cost of indiscriminately bailing out the finance sector under conditions of such opacity that it is likely that most of the money will be captured by people who are in no need of it. George Soros, Jim Rogers, and John Paulson, for example, doubled, tripled, or even quadrupled their net worth that was already in the tens of billions, over the last couple of years.

The whole point of the bailouts is to get institutions set up on a sound capital footing again, not transfer wealth via those institutions from the taxpayer to obsenely wealthy investors. I find it ludicrous that it is leftwingers who are defending this situation all the while they condemn “free markets” as being to blame, when the only real free market experts have said all along to just let the bastards fail. CEO payouts is just a diversionary sideshow.

Even if derivatives counterparties get to sieze most of the loot in the event of a bankruptcy, that is preferable to them siezing ten times as much loot, at the expense of the taxpayer, while the financial institutions that the taxpayer thinks they are “saving”, remain as shaky as ever.

I promise you that this is not going to end in the long run with everyone breathing sighs of relief and saying “phew, that took a while and cost us and our kids and grandkids a lot of money, but we’ve finally saved the financial system”. It will end with everyone crying “if only we’d listened to the people that told us to just let the bastards fall over in the first place”.

I also promise you that the more government involvement, the bigger the ultimate mess will be, not the less. There used to be a joke that Communism is the longest route from Capitalism to Capitalism. I think what we are seeing now, is government interference in Capitalism bringing about the longest route to Communism.
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March 20, 2009 1:50pm

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