Govt's move to user-pays in transport & infrastructure is administering an inflation shock; Shift from Govt-funded investment to private funding is forcing the RBNZ mortgage rates higher for longer
Given the list of inflation accelerators the government is planning would a wealth tax be deflationary or at least put a break on rampant asset prices?
Sadly, with this current bunch of Rotten Banana's in our Family Tree it could very well stimulate a more rapid Greed Grab to cover their increased Taxes, unless we have better Regulatory Control over these Nit Wits.
look who's in charge of the Regulatory Body in Aotearoa at the moment! The Atlas Cashola Vacuum Cleaner Salesman, David Seymour, who believes in "I got Mine, pity about you, Equality is for me, not thee, so open that Wallet and let me in, himself!
Trickle down is for people that believe in Fairy Tales! I'm into Reverse Robin Hood policy making in a Flood to the top arrangement because I'm a lot higher on the Meritocracy Ladder than you Bottom Dweller types under me, so go figger!
We need to get some Regulatory action working to control these Clowns real fast, or we might not have the chance to do it again.
Just look at last weeks news about Pharmac's Chief Executive resigning because she didn't see eye to eye with the Board Chairperson(s) Paula Benefit & Atlas Shrugged Fan David Seymour, if you don't know by now where the Cultural Change policies are coming from. She's just one in a long list of current Heads of Public Service Organisations leaving their posts, or being booted out from intolerable Cultural Differences with these Culturalist Trainers flipping the scales on the Public Good of their own Idealistic Volition and personal belief systems around their Elitist Ideologies.
These folks have Hacked their way through almost everything so far. Healthcare, Education, Public Services, Independent City Councils, Water, Electricity, Infrastructure, Environmental Standards, so pretty much the works of what helps Societies & Communities thrive.
Fast Track this, Seabed Mine that and go for Growth, Growth Growth, from the Dead Carcasses of the good folks working to make everything Work in the 1st place inside the extractive system we've allowed since "User Pays Rogernomics came to being in the mid 1980's.
For Me, not for thee has become a Standard for these Swamp Monkeys!
This Vulture Capitalist Asset Stripping for private Profit thing has got to be stopped and PRONTO, if we are to have any kind of future to be left for our Kids' fleeing the Country in droves at the moment.
AND, who can blame them for refusing to be robbed of their Childhoods for Debt Slavery before their 1st Kiss, other than Mum & Dad when they were sent off to School to learn the Ropes?
Great question. It depends how it was done. If it was done in concert with the removal of a bunch of user pays or development levies, as well as a GST cut, it would be deflationary. Interesting question about whether the RBNZ would look through it. It looked through the 2010 gst increase.
The Interest Rate Inflation Targeting, or great moderation, experiment has been an abject failure that has afflicted the world.
The globally widespread lack of residential property and land prices not being included in the measure of inflation for private bank Fiat money supply adjustments, has allowed the privately owned multilayered banking network that sits at the top of the money supply tree of most Western nations, to commit fraud by loaning more magic wand credit into the non productive housing sectors than the productive economy can support.
It is no surprise that most of the so called 'sticky inflation' is from prices set from the fake valued residential property sector, such as council rates and insurances.
Not to mention the now burgeoning Local Government Funding Agency which is becoming another debt entrapment scam.
As always I appreciate your depth of analysis, the diminishing returns of what always worked before and this shallow expectation that it should just work by National.
The phrase diminishing returns describes the situation well. It seems the neoliberalism/inequality bills are now falling due. And this is before the added stresses of aging population, climate change and geopolitical turmoil really kick in.
Thanks Ben. It might have worked if this National Govt had done what the Key/English National govt did, which was stimulate the economy out of a recession and block an attempt by the RBNZ to restrict credit growth. Key and English accidentally let Wheeler bring in LVRs in 2013, but blocked his DTI attempt in 2017. Luxon and Willis did the exact opposite.
Perhaps this government are stealth environmentalists, using inflation to reduce consumption? (Sarcasm).
But I wonder if in a round about way this will help slow consumption of unnecessary crap, inadvertently reducing environmental harm over the long term.
Yes they ARE using inflation to reduce consumption- but for Balance of Payments goals, not environmental ones. Of course they could use other means- import substitution, mandatory refurbishment of appliances, import tariffs & quotas, capital export controls to encourage investment here rather than overseas. I agree too much money is being spent on imported crap.
This is why (not unlike the US sentiment before the election there) that despite low inflation, the cost of living is increasing exponentially for the squeezed middle and lower income folks. The problem for this government is that they are losing support from those in the middle at a fast rate without demonstrating any strategy to support them, (like maybe a CGT or Wealth tax)
I suspect Deaths by Firearms is equal to , or has surpassed Road Deaths over there presently. So let's relax our Firearms Regulations is the solution to bringing down Road Death Statistic's - as Tui Says "Yeah Right!"
Indeed. I was surprised it was so shockingly high per 100,000. If only the class action lawyers could sue the state and federal governments for their speed decisions and lack of infrastructure investment, and lack of public transport development.
Many thanks to all our paying subscribers for getting us through 100 likes, which has encouraged and allowed me to open this one up for full public reading, listening and sharing.
Super interesting podcast today, thank you, Bernard.
I find it interesting that capital costs/inflation aren’t taken into account when calculating the CPI, but with our current economic structure (housing market with bits tacked on) any change in the OCR primarily influences interest rates that inflate/deflate capital. This was well acknowledged through Covid where the reserve bank explicitly used the wealth effect (I.e. inflated asset prices) to stimulate the economy. So it sounds like they don’t include capital on some of their calculations, but do on others.
Given the list of inflation accelerators the government is planning would a wealth tax be deflationary or at least put a break on rampant asset prices?
Sadly, with this current bunch of Rotten Banana's in our Family Tree it could very well stimulate a more rapid Greed Grab to cover their increased Taxes, unless we have better Regulatory Control over these Nit Wits.
look who's in charge of the Regulatory Body in Aotearoa at the moment! The Atlas Cashola Vacuum Cleaner Salesman, David Seymour, who believes in "I got Mine, pity about you, Equality is for me, not thee, so open that Wallet and let me in, himself!
Trickle down is for people that believe in Fairy Tales! I'm into Reverse Robin Hood policy making in a Flood to the top arrangement because I'm a lot higher on the Meritocracy Ladder than you Bottom Dweller types under me, so go figger!
We need to get some Regulatory action working to control these Clowns real fast, or we might not have the chance to do it again.
Just look at last weeks news about Pharmac's Chief Executive resigning because she didn't see eye to eye with the Board Chairperson(s) Paula Benefit & Atlas Shrugged Fan David Seymour, if you don't know by now where the Cultural Change policies are coming from. She's just one in a long list of current Heads of Public Service Organisations leaving their posts, or being booted out from intolerable Cultural Differences with these Culturalist Trainers flipping the scales on the Public Good of their own Idealistic Volition and personal belief systems around their Elitist Ideologies.
These folks have Hacked their way through almost everything so far. Healthcare, Education, Public Services, Independent City Councils, Water, Electricity, Infrastructure, Environmental Standards, so pretty much the works of what helps Societies & Communities thrive.
Fast Track this, Seabed Mine that and go for Growth, Growth Growth, from the Dead Carcasses of the good folks working to make everything Work in the 1st place inside the extractive system we've allowed since "User Pays Rogernomics came to being in the mid 1980's.
For Me, not for thee has become a Standard for these Swamp Monkeys!
This Vulture Capitalist Asset Stripping for private Profit thing has got to be stopped and PRONTO, if we are to have any kind of future to be left for our Kids' fleeing the Country in droves at the moment.
AND, who can blame them for refusing to be robbed of their Childhoods for Debt Slavery before their 1st Kiss, other than Mum & Dad when they were sent off to School to learn the Ropes?
Great question. It depends how it was done. If it was done in concert with the removal of a bunch of user pays or development levies, as well as a GST cut, it would be deflationary. Interesting question about whether the RBNZ would look through it. It looked through the 2010 gst increase.
The Interest Rate Inflation Targeting, or great moderation, experiment has been an abject failure that has afflicted the world.
The globally widespread lack of residential property and land prices not being included in the measure of inflation for private bank Fiat money supply adjustments, has allowed the privately owned multilayered banking network that sits at the top of the money supply tree of most Western nations, to commit fraud by loaning more magic wand credit into the non productive housing sectors than the productive economy can support.
It is no surprise that most of the so called 'sticky inflation' is from prices set from the fake valued residential property sector, such as council rates and insurances.
Not to mention the now burgeoning Local Government Funding Agency which is becoming another debt entrapment scam.
Thanks. I don’’t agree with what you say about LGFA. It’s a great way for councils to borrow with a central govt guarantee. And that’s good.
As always I appreciate your depth of analysis, the diminishing returns of what always worked before and this shallow expectation that it should just work by National.
The phrase diminishing returns describes the situation well. It seems the neoliberalism/inequality bills are now falling due. And this is before the added stresses of aging population, climate change and geopolitical turmoil really kick in.
Agreed!
Thanks Ben. It might have worked if this National Govt had done what the Key/English National govt did, which was stimulate the economy out of a recession and block an attempt by the RBNZ to restrict credit growth. Key and English accidentally let Wheeler bring in LVRs in 2013, but blocked his DTI attempt in 2017. Luxon and Willis did the exact opposite.
Thanks Bernard for this point, it seems hard to understand how they could let this pass them by.
I also wonder if they had blocked DTI could NZ inc really sustain yet another private debt fuelled property boom
Perhaps this government are stealth environmentalists, using inflation to reduce consumption? (Sarcasm).
But I wonder if in a round about way this will help slow consumption of unnecessary crap, inadvertently reducing environmental harm over the long term.
Yes they ARE using inflation to reduce consumption- but for Balance of Payments goals, not environmental ones. Of course they could use other means- import substitution, mandatory refurbishment of appliances, import tariffs & quotas, capital export controls to encourage investment here rather than overseas. I agree too much money is being spent on imported crap.
Ha! Unintended consequences.
as in 'doing the right thing for the wrong reasons'.
This is why (not unlike the US sentiment before the election there) that despite low inflation, the cost of living is increasing exponentially for the squeezed middle and lower income folks. The problem for this government is that they are losing support from those in the middle at a fast rate without demonstrating any strategy to support them, (like maybe a CGT or Wealth tax)
Road deaths. Another example of American exceptionalism.
I suspect Deaths by Firearms is equal to , or has surpassed Road Deaths over there presently. So let's relax our Firearms Regulations is the solution to bringing down Road Death Statistic's - as Tui Says "Yeah Right!"
Yep. And then add in deaths of despair from opioids. It’s one reason why US life expectancy is falling. Another one of the wrong kinds of exceptionalism. Here’s the Angus Deaton research on that. https://www.princeton.edu/news/2021/03/08/life-expectancy-falling-adults-without-bachelors-degree
Indeed. I was surprised it was so shockingly high per 100,000. If only the class action lawyers could sue the state and federal governments for their speed decisions and lack of infrastructure investment, and lack of public transport development.
Don't forget Kāpiti Council!
17% increase in rates this year, followed by
7%
7%
7%
7%
7%
7%
7%
7%
7%
Un-fucking-believable
Many thanks to all our paying subscribers for getting us through 100 likes, which has encouraged and allowed me to open this one up for full public reading, listening and sharing.
Super interesting podcast today, thank you, Bernard.
I find it interesting that capital costs/inflation aren’t taken into account when calculating the CPI, but with our current economic structure (housing market with bits tacked on) any change in the OCR primarily influences interest rates that inflate/deflate capital. This was well acknowledged through Covid where the reserve bank explicitly used the wealth effect (I.e. inflated asset prices) to stimulate the economy. So it sounds like they don’t include capital on some of their calculations, but do on others.