Paid subscribers are welcome to throw me questions for an hour from midday on the events of the week around housing, poverty and climate change in Aotearoa-NZ's political economy
What is your read on the poll Stuff is reporting on today that somewhere in the vicinity of 30% of kiwis support the protest? I can't bring myself to believe it, and I'm wondering if there is some obvious fact I'm overlooking.
Some criticise Horizon NZ because it's a panel polling firm, rather than a phone polling or door to door polling firm. You sign up to win prizes and then get asked to do polls regularly. Critics say it's self selecting, although most political and other polls are now done from these sort of online panels, rather than just calling people out of the blue. All polls have a bias in that a lot of people tell surveyers what they think they're supposed to say. I think the support is higher than the 4% of the adult population not vaccinated, but not the full 30%, and not for both anti mandate and anti-vaxx. I think anti-mandate sentiment is higher than anti-vaxx sentiment, and increasingly now it's clear vaccination is not as protective as it was for delta, although it does protect you from serious illness and protects the health system from being overwhelmed.
Brilliant! I had forgotten that one. Genius searching on Youtube! I'd also forgotten that Sir Humphrey's foil was called Bernard. Slightly disconcerting... :)
You wrote very strongly about the protests and weren't having a bar of it. I agree. Someone else I follow and respect, Neale Jones, ditto. Not the content of the protest - which is chaotic and contradictory - but the manner of it. Repulsive and violent despite what they try to present. And it could be the weak minded aping what's happening overseas. But is it something else? Not to accommodate it, but to understand it.
Thanks Glen. I've had a lot of feedback about that piece. https://thekaka.substack.com/p/misinformation-threatens-our-national?utm_source=url My main complaint is with the way the misinformation has been amplified, turbocharged and injected into the news feeds of 4m by Facebook and Youtube. I don't want to stop anyone publishing on either platform. My main problem is with the algorithms written by Facebook and Youtube to maximise engagement by offering up the most extreme content. Essentially, they turn the rantings of the street corner prophet into something everyone anywhere around the world can hear at a full 10 on the speaker. No wonder significant chunks of the population are now feeling extreme about things.
I'm dble-vacc'd and boosted and can't understand the anti-vac brigade, but I personally know a few people at the protest who are well-educated, sensible, and nice people who have a business that Covid boosts rather than hinders. And they've never been to a protest before. They're against the mandates, MIQ as it is, and blocking NZ citizens from their own country which they believe are a step too far and disproportionate to the risk. They report that the vast majority of people at the protest like them are concerned about government control & spin. And I think they've probably got a valid point. The Govt ignoring the protesters doesn't seem to be working. And the police know, the day they start dragging everyday, normal and reasonable NZ citizens off from parliament grounds and arresting them is a significant risk for further disruption. I think the best option for the police is to start towing some of the vehicles blocking the streets, as that's more clear cut and will probably be more readily accepted and supported by Joe-Public. Just my view.
I've walked around and through the protest several times with my mask on. Had no negative interactions, and a few people went out of their way to welcome me. I've not seen much evidence of the violence people have been citing - my main concern was that the (potentially valid) concern about government expanding powers disporportionately to the current risks, is the wealth of misinformation on boards and in conversations, as well at the ongoing quiet rumble I've seen on Convoy-associated-Facebook group of 'starting fresh' and 'setting up a new government' (if we were from the USA we might say seditious but that doesn't sound very Kiwi)
Yep. Some members of the media have taken moral offence at being abused and 'threatened' for being part of the media. While not pleasant, it's likely only from a few of the more disgruntled. And maybe it is timely that some of the media considered the moral impact and the 'harm' that some headlines and their reporting causes some people. Maybe the reaction they got is the logical response of those without the influence and the voice that many in the media enjoy. When people feel marginalised and maligned, then sometimes, at some point, they're going to hit back.
Thanks Chap. I don't know that. I suspect not. I think it's more of a cockup than a conspiracy. I think they're short staffed and didn't move fast enough last week to stop it escalating. And now, understandably, moving people on could get very ugly very fast. They'll find a way eventually to squeeze the life out of it and let it dribble away. But it will take some sort of virtual kettling, gates, fences and a lot of chat.
Just supporting Greg's comment - it does seem very puzzling. What would you do about the occupation if your were Prime Minister ... or indeed Police Commissioner? Ironically the protest has made it difficult for the Government to move on mandates (which they otherwise might have started to do) without appearing to be backing down. Is the answer to set a date (end March?) for a review - perhaps by an independent authority?
Great framing of the problem David. The big mistake was made last Tuesday when the protestors walked up to Parliament and there was almost no Police presence, and then (astonishingly) the Police allowed people to wander in and out of the grounds and set up tents and kitchens. People should be allowed to walk onto the grounds, shout their piece, and then walk off. This was not that. Same with the utes and trucks parked illegally. Not a single ticket for over a week. And I don't buy the excuse that the tow truck drivers wouldn't cooperative. $300 a pop is very motivating...
Sensible idea David. But the Govt should have already had a plan in place with clear indications of time or situation limitations to the legislation and the mandates. Unfortunately it appears that too much appears 'made up on the hoof' and contradictory so people who have been tolerant and mostly supportive of the need for the Govt's actions, are now tiring of it. And it's now unravelling.
Thanks Shane. Very topical. And painful. I'm still in the transitory camp, at least in the longer term going out two or three years. Then sensible people could rightly accuse Team Transitory of moving the goalposts of what the word transitory means. I'm a fan of Keynes. He said: "In the long run, we are all dead...'" :)
I still think long term demographic (labour supply, young vs. older) and energy cost trends are going to be inflationary for quite a while... and these cost pressures will increase social discord :-(
Do you see the ‘freedom’ protests and misinformation campaigns as part of a wider civilisation-wide epistemic cascade failure? Do you agree the balance between positive freedoms (the right for you to carry out an action/inaction) and negative freedoms (the right to be free from the consequences of the actions/inactions of others) has been twisted into a ‘positive-rights only’ toxic individualism fuelled by the confirmation bias and identity-protective cognition enabled via the ‘computational propaganda’ algorithms of social media? How do we bring back the balance between positive and negative rights so hard fought for over the the previous two centuries? Given that any attempt to trump positive rights over negative rights must be logically self defeating (since by championing your own positive rights you inherently acquiesce your own negative rights to others), do you think there is any chance of these protesters coming to their senses before it’s too late? And what kind of political capital do they think they are growing for the politicians to harvest at the next election, if they are simply fuelling the bile of public sentiment against themselves? And given their actions are deontologically self-defesting, what do we think Kant or Rawls would have said about it all? Thanks! Chris
Thanks Chris. You ask some great and deep questions that I ask myself when I'm brave enough. Ultimately, sovereign nations will have to wrestle control of the public information sphere back from the tech giants. Largely through regulation. Not to be some sort of giant censoring machine, but to regulate the amplification and circulation. The Tech giants can easily strip out the nudity and the music/movie rights violations, but seem remarkably unable/unwilling to strip out the click bait. They will have to be made to.
I am a subscriber to The Kaka and enjoy your podcasts.
I am a Land Surveyor and in the heart of the development stream of new subdivision through to new builds. Your comments regarding NZ property and its place in NZ society fascinate me.
Overview. In simplistic terms an earlier mortgage of $200,000 @ 10% has the same serviceability as a $ 800,000 @ 2.5%. This, to date, has in my assessment fueled much of the unsustainability/asset bubble in property.
So, my question. Given the dominance of the US economy on the global economy, of which NZ is just 0.2% by way of stock market valuation, did NZ have a choice about lowering its OCR? If NZ had stayed at an OCR of say 6% would 1) The NZ/USA exchange rate been madly high thus making NZ exports less profitable or indeed struggle for international competitiveness and 2) would masses of overseas money have flooded in to NZ (as a relatively stable western democracy, earthquakes and tsunamis aside) thereby having a destabilising effect on NZ?
Summary. I ponder if, in terms of credit and interest rates, relatively small policy initiatives inside NZ aside, if we in NZ are swept along by international well more specifically USA financial policy? That is they make the decisions and we follow! In essence the credit boom started with Reagan's administration loosening credit control which finished with the leveraged implosion of the GFC (which incidentally I thought would have kicked inflation off however I guess largely manifested itself in asset inflation). Cricky, plenty to ponder!
Thanks Noel. You've landed on a strong point. Low interest rates a big reason for the crazy prices. The trouble is going back the other way... How sticky might they be when rates rise, and has the housing market become too big to be allowed to fail. IE Feeding all the cheap debt into prices has created a monster that will try to eat us all if we try to put it on a diet.
Look at today's Barfoot & Thompson auction clearance rates. It's collapsed. It'll be interesting to see if we start to see asking prices back in the market.
Re whether to make more of the content public. I don't have an issue if you feel it is in the public interest to share more content. One of the good things about sharing only with subscribers is that you don't have to self-censor to make what you say widely palatable. I am here for your research and your analysis, not anodyne material for wide appeal. However you do that is up to you.
Thanks Lynn. It's been a while since I had to self-censor myself. But I'm also careful to ensure anything I say or do can 'live' in public. IE I remain open to being challenged or corrected by anyone and have to document my facts and points by referencing other sources and tools. Appreciate the support.
If the employment mandates were to be withdrawn now would there be a risk of people going to court arguing they shouldn't have been fired, and can they have their jobs back? Part of the argument being the short period between having to be jabbed and not having to be.
That is an excellent thought and idea for a line of questioning. I haven't seen it as a particular issue the govt is worried about yet. But certainly worth a few questions from me to the likes of Michael Wood or Chris Hipkins.
I think we'll start to see PG's being lodged in response to the sectors that were subject to the vaccination mandates having to stand-down and then effectively make people redundant.
Do you still stand by your "inflation is transitory" stance?
Given that higher interest rates finally seem to be taking a chunk out of property prices, and the capacity constraints faced by business due to excess demand and constrained supply seem to be one of the major issues going into this year, it seems to me like maintaining extremely low interest rates would do far more harm than good at this point.
The main harm of low interest rates is being done to asset prices. I think that could be controlled by controlling the leverage through LVRs etc. The trouble is the banks have virtually stopped new lending to businesses at anything like the OCR. Changing the OCR doesn't make much difference for them. I'm still in Team Transitory, especially once these rate hikes cause a financial market car crash and force a slow down globally. OCR changes also won't be able to change energy prices much. I still think the bigger danger is tightening too fast and too much in a way that brings back deflation. But the wider point you make about all the easy money being unsustainable is right. That's mostly about the benefits of it going to asset owners, and then being recycled into dead cash and bond accounts. All this cash is mostly just escalating asset prices and not being invested in new products, tech, jobs and services. The bigger issue is one of wealth redistribution and public/private investment in real productive assets and infrastructure. That requires difficult and new political and social contracts that would include wealth taxes and a lot more investment in housing and emissions reductions infrastructure that ensures the poorest don't pay all over again for another big economic 'adjustment'.
Wonder - once we finally get the much needed “financial market car crash” - whether liquidity/cash will then flow to income related goods/services and sustain inflation that way?
Investors and consumers will put their wallets away. Then the central banks will bail out the banks. And print again. Sadly, that's the playbook of the last 30 years or so. Can't see how it changes, given the dynamics of cash piling up in fewer and fewer hands in banks, while debt gets loaded up at the household and govt end of the spectrum.
Except when the banks are bailed out it should be as the government taking on equity, not a loan regardless of how nice or nasty the interest rate is. If a bank were to see the gov't taking a hefty share of equity then maybe the banks would go to their existing shareholders; you know, the ones with all that money.
Do you have any sense of how the protest might be shut down, as a practical matter? I've been down there a couple of times and the vibe I get is that they're having a great time; morale seems high, and I don't see them going anywhere. I also don't see how the government gives them any of the various things they've asked for. I am very, very fed up with them, speaking as a Wellingtonian; I'm also worried that the QAnon misinformation playbook some of them seem to be using is going to provide a template for more of this sort of thing.
I'm in Wellington and feel exactly the same things. And the smell, which you can't quite communicate online or on the telly or in the newspaper. I think the life will have to be squeezed out of it with blocking entrances and exits, and offering to escort people away for food and toilet etc. Essentially, the Police will have to blockade the blockaders and chip away at them over a few days. I think that's better than some sort of kettling or red squad confrontation. The Police will no doubt learn for next time. Expect a few electric tow trucks to become Police vehicles...
Agreed Bernard, this doesn't get cleared out in one go, get rid of the cars on Bowen St then stop anyone else parking up, clear out the Law faculty grounds the next day, clear out Bunny St the day after, rinse and repeat till it's contained inside Parliament grounds
Yep. Quiet clearing of the vehicles is the way to start. If people interfere with that they'll be subject to arrest and there'll be less sympathy for them. If you try and start clearing peaceful protesters from parliament grounds, there'll be trouble and even if I don't agree with them, I do support their right to be there atm. Particularly as the people they've gone to see, haven't yet come out to listen and respond. If you get elected (or selected as List MP's) into Govt, and the people come with concerns (whether you think they're legit or not), you should take the moral high ground, show some spine and front up. When you don't, that's when the looney fringe of them can get amped up
I was wondering whether the anti vax protest is having an impact on our international standing in the world? Is it irrelevant or is the world watching to see how we deal with it? (I'm hoping we are not a joke...given Canada is grappling with the same type of protest.)
Ha! I suspect few are watching closely and our protestors are pretty mild compared to the Canadian truckers and the Belgian and Dutch rioters, or the mob that almost sparked a coup in America. The only coverage I've seen overseas has focused on the quirky. The James Blunt tweet. Trevor Mallard's decision to turn on the sprinklers. The yoga practices. It only becomes a news story overseas if there's some sort of obvious riot. That would change a few perceptions. But even then, it would have to be really, really bad to bust through the wall of bad noise overseas.
You seem pretty confident that should property start to genuinely correct rather than simply fall moderately, the government and/or RBNZ will step in. How could they realistically do this in the context of rapidly rising interest rates globally (particularly the USA)? Wouldn’t any move to slash domestic rates simply wreak havoc on our currency and worsen inflation?
Plenty of ways to skin the cat. The RBNZ simply removed the LVRs. They could be tweaked. We're already seen the Govt say it's willing to tweak the CCCFA to ensure the credit tap is opened up again. Then there's the govt's ability to suspend or reduce the various tax measures introduced over the last couple of years, and to dial back its spending on new housing, or to slow down the pace to ensure the supply side doesn't accelerate any fall.
Those trucker protests are clearly scaring the pants off North American "leadership". Great to see!
What is your read on the poll Stuff is reporting on today that somewhere in the vicinity of 30% of kiwis support the protest? I can't bring myself to believe it, and I'm wondering if there is some obvious fact I'm overlooking.
Some criticise Horizon NZ because it's a panel polling firm, rather than a phone polling or door to door polling firm. You sign up to win prizes and then get asked to do polls regularly. Critics say it's self selecting, although most political and other polls are now done from these sort of online panels, rather than just calling people out of the blue. All polls have a bias in that a lot of people tell surveyers what they think they're supposed to say. I think the support is higher than the 4% of the adult population not vaccinated, but not the full 30%, and not for both anti mandate and anti-vaxx. I think anti-mandate sentiment is higher than anti-vaxx sentiment, and increasingly now it's clear vaccination is not as protective as it was for delta, although it does protect you from serious illness and protects the health system from being overwhelmed.
https://www.youtube.com/watch?v=ahgjEjJkZks
Brilliant! I had forgotten that one. Genius searching on Youtube! I'd also forgotten that Sir Humphrey's foil was called Bernard. Slightly disconcerting... :)
You wrote very strongly about the protests and weren't having a bar of it. I agree. Someone else I follow and respect, Neale Jones, ditto. Not the content of the protest - which is chaotic and contradictory - but the manner of it. Repulsive and violent despite what they try to present. And it could be the weak minded aping what's happening overseas. But is it something else? Not to accommodate it, but to understand it.
Thanks Glen. I've had a lot of feedback about that piece. https://thekaka.substack.com/p/misinformation-threatens-our-national?utm_source=url My main complaint is with the way the misinformation has been amplified, turbocharged and injected into the news feeds of 4m by Facebook and Youtube. I don't want to stop anyone publishing on either platform. My main problem is with the algorithms written by Facebook and Youtube to maximise engagement by offering up the most extreme content. Essentially, they turn the rantings of the street corner prophet into something everyone anywhere around the world can hear at a full 10 on the speaker. No wonder significant chunks of the population are now feeling extreme about things.
I'm dble-vacc'd and boosted and can't understand the anti-vac brigade, but I personally know a few people at the protest who are well-educated, sensible, and nice people who have a business that Covid boosts rather than hinders. And they've never been to a protest before. They're against the mandates, MIQ as it is, and blocking NZ citizens from their own country which they believe are a step too far and disproportionate to the risk. They report that the vast majority of people at the protest like them are concerned about government control & spin. And I think they've probably got a valid point. The Govt ignoring the protesters doesn't seem to be working. And the police know, the day they start dragging everyday, normal and reasonable NZ citizens off from parliament grounds and arresting them is a significant risk for further disruption. I think the best option for the police is to start towing some of the vehicles blocking the streets, as that's more clear cut and will probably be more readily accepted and supported by Joe-Public. Just my view.
Our "leaders" will be caught with their pants down if the covid crisis is allowed to end, it's all they've got.
I don't know about the NZ protest but I watch livestreams of the Ottawa protest.. friendly, peaceful and not a swastika in sight.
I've walked around and through the protest several times with my mask on. Had no negative interactions, and a few people went out of their way to welcome me. I've not seen much evidence of the violence people have been citing - my main concern was that the (potentially valid) concern about government expanding powers disporportionately to the current risks, is the wealth of misinformation on boards and in conversations, as well at the ongoing quiet rumble I've seen on Convoy-associated-Facebook group of 'starting fresh' and 'setting up a new government' (if we were from the USA we might say seditious but that doesn't sound very Kiwi)
Yep. Some members of the media have taken moral offence at being abused and 'threatened' for being part of the media. While not pleasant, it's likely only from a few of the more disgruntled. And maybe it is timely that some of the media considered the moral impact and the 'harm' that some headlines and their reporting causes some people. Maybe the reaction they got is the logical response of those without the influence and the voice that many in the media enjoy. When people feel marginalised and maligned, then sometimes, at some point, they're going to hit back.
Wellington protest is police made because a substantial proportion of the police agree with the protesters. Comment?
Thanks Chap. I don't know that. I suspect not. I think it's more of a cockup than a conspiracy. I think they're short staffed and didn't move fast enough last week to stop it escalating. And now, understandably, moving people on could get very ugly very fast. They'll find a way eventually to squeeze the life out of it and let it dribble away. But it will take some sort of virtual kettling, gates, fences and a lot of chat.
Or all the protesters will get Covid and dribble away...
Ha! Shouldn't laugh. Coughing and sneezing and dribbling. Hang on a minute. Let me put on my mask as I type... :)
Agreed.
Just supporting Greg's comment - it does seem very puzzling. What would you do about the occupation if your were Prime Minister ... or indeed Police Commissioner? Ironically the protest has made it difficult for the Government to move on mandates (which they otherwise might have started to do) without appearing to be backing down. Is the answer to set a date (end March?) for a review - perhaps by an independent authority?
Great framing of the problem David. The big mistake was made last Tuesday when the protestors walked up to Parliament and there was almost no Police presence, and then (astonishingly) the Police allowed people to wander in and out of the grounds and set up tents and kitchens. People should be allowed to walk onto the grounds, shout their piece, and then walk off. This was not that. Same with the utes and trucks parked illegally. Not a single ticket for over a week. And I don't buy the excuse that the tow truck drivers wouldn't cooperative. $300 a pop is very motivating...
Sensible idea David. But the Govt should have already had a plan in place with clear indications of time or situation limitations to the legislation and the mandates. Unfortunately it appears that too much appears 'made up on the hoof' and contradictory so people who have been tolerant and mostly supportive of the need for the Govt's actions, are now tiring of it. And it's now unravelling.
How strongly are you holding to your contrarian view that inflation (in NZ and overseas) is transitory? And if so, when do you see peak inflation?
Thanks Shane. Very topical. And painful. I'm still in the transitory camp, at least in the longer term going out two or three years. Then sensible people could rightly accuse Team Transitory of moving the goalposts of what the word transitory means. I'm a fan of Keynes. He said: "In the long run, we are all dead...'" :)
True - You can’t avoid the 2nd Law of Thermodynamics (well “globally” anyway)
I still think long term demographic (labour supply, young vs. older) and energy cost trends are going to be inflationary for quite a while... and these cost pressures will increase social discord :-(
Do you see the ‘freedom’ protests and misinformation campaigns as part of a wider civilisation-wide epistemic cascade failure? Do you agree the balance between positive freedoms (the right for you to carry out an action/inaction) and negative freedoms (the right to be free from the consequences of the actions/inactions of others) has been twisted into a ‘positive-rights only’ toxic individualism fuelled by the confirmation bias and identity-protective cognition enabled via the ‘computational propaganda’ algorithms of social media? How do we bring back the balance between positive and negative rights so hard fought for over the the previous two centuries? Given that any attempt to trump positive rights over negative rights must be logically self defeating (since by championing your own positive rights you inherently acquiesce your own negative rights to others), do you think there is any chance of these protesters coming to their senses before it’s too late? And what kind of political capital do they think they are growing for the politicians to harvest at the next election, if they are simply fuelling the bile of public sentiment against themselves? And given their actions are deontologically self-defesting, what do we think Kant or Rawls would have said about it all? Thanks! Chris
Thanks Chris. You ask some great and deep questions that I ask myself when I'm brave enough. Ultimately, sovereign nations will have to wrestle control of the public information sphere back from the tech giants. Largely through regulation. Not to be some sort of giant censoring machine, but to regulate the amplification and circulation. The Tech giants can easily strip out the nudity and the music/movie rights violations, but seem remarkably unable/unwilling to strip out the click bait. They will have to be made to.
I also wonder if we should revisit what Karl Popper wrote in “Open Society” back in late 1940s (and when he was I n NZ - as it happened)
That’s a book they should be teaching kids at high school. Along with Rawls’ Theory of Justice and Bertrand Russell’s History of Western Philosophy.
Check out the Ottawa livestreams and enjoy the peaceful party atmosphere :)
Good afternoon Bernard Hickey,
I am a subscriber to The Kaka and enjoy your podcasts.
I am a Land Surveyor and in the heart of the development stream of new subdivision through to new builds. Your comments regarding NZ property and its place in NZ society fascinate me.
Overview. In simplistic terms an earlier mortgage of $200,000 @ 10% has the same serviceability as a $ 800,000 @ 2.5%. This, to date, has in my assessment fueled much of the unsustainability/asset bubble in property.
So, my question. Given the dominance of the US economy on the global economy, of which NZ is just 0.2% by way of stock market valuation, did NZ have a choice about lowering its OCR? If NZ had stayed at an OCR of say 6% would 1) The NZ/USA exchange rate been madly high thus making NZ exports less profitable or indeed struggle for international competitiveness and 2) would masses of overseas money have flooded in to NZ (as a relatively stable western democracy, earthquakes and tsunamis aside) thereby having a destabilising effect on NZ?
Summary. I ponder if, in terms of credit and interest rates, relatively small policy initiatives inside NZ aside, if we in NZ are swept along by international well more specifically USA financial policy? That is they make the decisions and we follow! In essence the credit boom started with Reagan's administration loosening credit control which finished with the leveraged implosion of the GFC (which incidentally I thought would have kicked inflation off however I guess largely manifested itself in asset inflation). Cricky, plenty to ponder!
Cheers Noel Armstrong
Thanks Noel. You've landed on a strong point. Low interest rates a big reason for the crazy prices. The trouble is going back the other way... How sticky might they be when rates rise, and has the housing market become too big to be allowed to fail. IE Feeding all the cheap debt into prices has created a monster that will try to eat us all if we try to put it on a diet.
Look at today's Barfoot & Thompson auction clearance rates. It's collapsed. It'll be interesting to see if we start to see asking prices back in the market.
Re whether to make more of the content public. I don't have an issue if you feel it is in the public interest to share more content. One of the good things about sharing only with subscribers is that you don't have to self-censor to make what you say widely palatable. I am here for your research and your analysis, not anodyne material for wide appeal. However you do that is up to you.
Thanks Lynn. It's been a while since I had to self-censor myself. But I'm also careful to ensure anything I say or do can 'live' in public. IE I remain open to being challenged or corrected by anyone and have to document my facts and points by referencing other sources and tools. Appreciate the support.
Nice point Lynn.
If the employment mandates were to be withdrawn now would there be a risk of people going to court arguing they shouldn't have been fired, and can they have their jobs back? Part of the argument being the short period between having to be jabbed and not having to be.
That is an excellent thought and idea for a line of questioning. I haven't seen it as a particular issue the govt is worried about yet. But certainly worth a few questions from me to the likes of Michael Wood or Chris Hipkins.
I think we'll start to see PG's being lodged in response to the sectors that were subject to the vaccination mandates having to stand-down and then effectively make people redundant.
Do you still stand by your "inflation is transitory" stance?
Given that higher interest rates finally seem to be taking a chunk out of property prices, and the capacity constraints faced by business due to excess demand and constrained supply seem to be one of the major issues going into this year, it seems to me like maintaining extremely low interest rates would do far more harm than good at this point.
The main harm of low interest rates is being done to asset prices. I think that could be controlled by controlling the leverage through LVRs etc. The trouble is the banks have virtually stopped new lending to businesses at anything like the OCR. Changing the OCR doesn't make much difference for them. I'm still in Team Transitory, especially once these rate hikes cause a financial market car crash and force a slow down globally. OCR changes also won't be able to change energy prices much. I still think the bigger danger is tightening too fast and too much in a way that brings back deflation. But the wider point you make about all the easy money being unsustainable is right. That's mostly about the benefits of it going to asset owners, and then being recycled into dead cash and bond accounts. All this cash is mostly just escalating asset prices and not being invested in new products, tech, jobs and services. The bigger issue is one of wealth redistribution and public/private investment in real productive assets and infrastructure. That requires difficult and new political and social contracts that would include wealth taxes and a lot more investment in housing and emissions reductions infrastructure that ensures the poorest don't pay all over again for another big economic 'adjustment'.
Wonder - once we finally get the much needed “financial market car crash” - whether liquidity/cash will then flow to income related goods/services and sustain inflation that way?
Investors and consumers will put their wallets away. Then the central banks will bail out the banks. And print again. Sadly, that's the playbook of the last 30 years or so. Can't see how it changes, given the dynamics of cash piling up in fewer and fewer hands in banks, while debt gets loaded up at the household and govt end of the spectrum.
Except when the banks are bailed out it should be as the government taking on equity, not a loan regardless of how nice or nasty the interest rate is. If a bank were to see the gov't taking a hefty share of equity then maybe the banks would go to their existing shareholders; you know, the ones with all that money.
Do you have any sense of how the protest might be shut down, as a practical matter? I've been down there a couple of times and the vibe I get is that they're having a great time; morale seems high, and I don't see them going anywhere. I also don't see how the government gives them any of the various things they've asked for. I am very, very fed up with them, speaking as a Wellingtonian; I'm also worried that the QAnon misinformation playbook some of them seem to be using is going to provide a template for more of this sort of thing.
I'm in Wellington and feel exactly the same things. And the smell, which you can't quite communicate online or on the telly or in the newspaper. I think the life will have to be squeezed out of it with blocking entrances and exits, and offering to escort people away for food and toilet etc. Essentially, the Police will have to blockade the blockaders and chip away at them over a few days. I think that's better than some sort of kettling or red squad confrontation. The Police will no doubt learn for next time. Expect a few electric tow trucks to become Police vehicles...
Agreed Bernard, this doesn't get cleared out in one go, get rid of the cars on Bowen St then stop anyone else parking up, clear out the Law faculty grounds the next day, clear out Bunny St the day after, rinse and repeat till it's contained inside Parliament grounds
Where is a good Wellington sewer leak when you need one.
Yep. Quiet clearing of the vehicles is the way to start. If people interfere with that they'll be subject to arrest and there'll be less sympathy for them. If you try and start clearing peaceful protesters from parliament grounds, there'll be trouble and even if I don't agree with them, I do support their right to be there atm. Particularly as the people they've gone to see, haven't yet come out to listen and respond. If you get elected (or selected as List MP's) into Govt, and the people come with concerns (whether you think they're legit or not), you should take the moral high ground, show some spine and front up. When you don't, that's when the looney fringe of them can get amped up
I was wondering whether the anti vax protest is having an impact on our international standing in the world? Is it irrelevant or is the world watching to see how we deal with it? (I'm hoping we are not a joke...given Canada is grappling with the same type of protest.)
Ha! I suspect few are watching closely and our protestors are pretty mild compared to the Canadian truckers and the Belgian and Dutch rioters, or the mob that almost sparked a coup in America. The only coverage I've seen overseas has focused on the quirky. The James Blunt tweet. Trevor Mallard's decision to turn on the sprinklers. The yoga practices. It only becomes a news story overseas if there's some sort of obvious riot. That would change a few perceptions. But even then, it would have to be really, really bad to bust through the wall of bad noise overseas.
You seem pretty confident that should property start to genuinely correct rather than simply fall moderately, the government and/or RBNZ will step in. How could they realistically do this in the context of rapidly rising interest rates globally (particularly the USA)? Wouldn’t any move to slash domestic rates simply wreak havoc on our currency and worsen inflation?
Plenty of ways to skin the cat. The RBNZ simply removed the LVRs. They could be tweaked. We're already seen the Govt say it's willing to tweak the CCCFA to ensure the credit tap is opened up again. Then there's the govt's ability to suspend or reduce the various tax measures introduced over the last couple of years, and to dial back its spending on new housing, or to slow down the pace to ensure the supply side doesn't accelerate any fall.
Land rates. Plainly this Govt dose not own property or really understand drivers of LAND.
Capital value or LAND value. They get mesmerised on the word CAPITAL.
I'd prefer councils rated land values. That increases incentives to develop it.
Many thanks to you all.