Monday, November 17, 2008

Where we at NZ?

With the global collapse of greedy corporate capitalism set to get much worse than previously predicted…

The Worst is not behind us
Beware, therefore, of those who tell you that we have reached a bottom for risky financial assets. The same optimists told you that we reached a bottom and the worst was behind us after the rescue of the creditors of Bear Stearns in March; after the announcement of the possible bailout of Fannie and Freddie in July; after the actual bailout of Fannie and Freddie in September; after the bailout of AIG; in mid-September; after the TARP legislation was presented; and after the latest G-7 and E.U. action.

In each case, the optimists argued that the latest crisis and rescue policy response was the cathartic event that signaled the bottom of the crisis and the recovery of markets. They were wrong literally at least six times in a row as the crisis--as I have consistently predicted over the last year--became worse and worse. So enough of the excessive optimism that has been proved wrong at least six times in the last eight months alone.

Professor Nouriel Roubini
Forbes columnist

…and with our own economy set for meltdown with 50 000 new unemployment fears rapidly becoming a reality with lay offs being announced daily now and a middle class property speculation that fuelled a credit card lifestyle showing signs of absolute collapse with a 6% drop in valuations predicted to hit a 30% drop in valuation…

House sales in record slump
House sales volumes fell by a record amount in the first half of 2008, a report by economic consultants Infometrics shows. Findings released today show property sales volumes slumped 44.3 percent compared to the same period in 2007, exceeding the previous record decline of 39.4 percent set in the second half of 1974.

…and what is our response to this in NZ? A hard right Daddy State mACTional coalition led by the Beige Obama change merchant with Maori Party moderate window dressing and a cabinet more akin to a gallery of rogues from the failures of the 90s privatization agenda cherry topped by a patsy Minister of Social Development who will soft face the deep cuts in social funding National and ACT intend to have her sell to the public. The release of what National and ACT intend to try and ram through Parliament gives us some unpleasant reading, as the very brilliant Gordon Campbell points out on Scoop

Like other Act policies, the Taxpayers Bill of Rights Bill has been borrowed lock, stock and barrel from a US model – namely, the Taxpayer Bill of Rights Act aka TABOR, which was passed into law in Colorado in 1992. The state of Colorado has since found TABOR to be highly controversial, and has passed special exemptions – amendment 23 in 1999 for instance, raised the spending levels on early childhood education - in order to get around the rigid spending cap that TABOR had imposed.

Unfortunately, the exemption granted to kindergarten / primary school education spending has been at the expense of other social needs, with higher education and transportation being especially hard hit.
TABOR and reality have been on a collision course ever since. In 2005, Colorado voted to give itself a five year holiday from TABOR altogether, to allow the state’s finances a chance to recover. Ironically, shortly after Coloradans voted to free themselves from TABOR, Rodney Hide introduced the same measures into Parliament in 2006, in the shape of a private members bill.

The preamble to Hide’s Bill explicitly noted its origins in Colorado, and acknowledged that the proposal had already failed by saying “Last year, Colorado voters allowed their politicians to breach the spending cap…” It is now being revived, and fast tracked by John Key.

In sum, New Zealand is about to adopt as an instrument of restraint on government spending, a measure known to have already caused havoc, division and shortfalls in public service provision in its state of origin. The detailed evidence of TABOR’s flaws is contained in this extensive Bell Policy Center Report

So how do the TABOR mechanisms actually work ? As in Colorado, the measures Hide has been proposing would limit the growth rate of the revenues that government can collect and spend, and allow them to be adjusted upwards only to compensate for inflation and population growth, and nothing else. Not wage increases, or a desire to improve services. If revenues exceed the prior year’s allocation, this is returned to taxpayers as a rebate.

Crucially, the measure has a rachet down effect on public services. During boom times, central and local governments are prevented from using the higher revenues to expand or to improve public services, or to save for a rainy day. Moreover, because revenues will fall during a recession, the year-to-year measurement will mean that the new base for determining spending growth will become the low revenue point created by the recession. Hence, the TABOR approach renders permanent any cuts to public services that are imposed during bad years.

How’s that change feeling now NZ? It’s just like Barack Obama eh, getting the feeling yet that NZers were conned into believing the change and moderation spin job yet? See the problem is we needed change in NZ, but certainly not the ‘change’ that mACTional will provide, the type of change we desperately need is the exact change that Professor Klaus Bosselmann the director of the NZ Centre for Environmental Law is talking about…

Putting steel into the fight to save Earth
Humans have overstepped the threshold of sustainability. In the mid-1980s, the capacity of the planet to sustain its human population had reached 100 per cent. The current population now has an ecological footprint equal to 1.25 planets.
If those people who live in the so-called Third World catch up with the lifestyle in the US or New Zealand, we need 4.5 planets.
We are facing one simple loss - our own disappearance from the planet, which itself will continue to live. We need to drastically reduce our ecological footprint.

Individual actions are of limited use. Making the changes requires regulatory and policy changes that strongly enforce footprint-reducing actions. In short, we need mutual coercion, mutually agreed upon.
Environmental law differs from the rest of law with its peculiar space and time dimensions. How to regulate human behaviour in the Here and Now to avoid disaster in the There and Then?

The problem is to reconcile two extreme positions. On the one hand, people living today have a right to pursue their prosperity and well-being, but in doing so they collectively threaten the environment.

On the other hand, the environment demands responsibilities from us now so it can be preserved for the future. To date, rights have trumped responsibilities.

This tragedy is caused by short-sighted economic rationality which has shaped both the capitalist and socialist worlds.
Media attention on issues like climate change and food prices has increased. But the links between ecology and economy are still made only in terms of costs.

Typically, the environment is presented as an economic cost factor, not as a challenge to the economy itself. Financial markets seem to operate in complete independence from the state of the environment.

Governments compartmentalise the environment. There is a Ministry for the Environment but Treasury determines public policy. There are environmental policies but politicians are eager to point out they won't harm the economy. There are environmental laws, but isolated from commercial laws.

Partially protecting the environment in competition with economic objectives is ecological nonsense. Imagine a child protection law that says: "Do not beat your child too often and too much." Environmental law does just that: "Do not pollute the environment too often and too much."

The flawed thinking behind such environmentalism is the assumption that the environmental crisis can be solved within the current economic, political and legal system without challenging underlying values.

And those underlying values of unsustainable growth at any cost is exactly what mACTional will promote as a way out of the economic position those exact same values have led us into, National’s agenda is not ‘moderate’ and their ‘change’ will be deeply detrimental, but then again NZers might already have known all of this if the mainstream media had actually done it’s job and evaluated what National Party policy might actually do if implemented rather than focusing on the crucifixion of Winston Peters for something the Electoral Commission, Serious Fraud Office and the Police eventually cleared him on.

A hard rain is gonna fall and when the Daddy State starts taking effect, I can bet no one will be jumping up and down about Nanny State lightbulbs or shower heads in a years time.

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