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Friday, January 30, 2009

Hangin' Tough 

I don't think anyone realized that the new government's 100 days of action would actually begin with about 20 days of action, followed by 60 days of slumber. Don't worry though, because Bill English sure ain't. He's remarkably chipper:

"People are pretty resilient around this recession," he told reporters.
"Where 20 years ago they might have been paralysed by the prospect of a economic downturn we are talking to businesses, to people on the shop floor, to civil servants – who are rolling up their sleeves ready to do what needs to be done."
Well I know your job is secure for the length of the electoral cycle, Bill, but how would you feel if you were stuck for another two years paying 8.5% on a mortgage worth more than the current market value of your house, with the very real danger of your household income being halved in the immediate future due to one partner being made redundant?

I'm betting you'd be getting pretty close to "paralysis" due to that sensation known as fear.

Hell, even Darth George is getting fed up with your government's do nothing attitude.

Not even a bag of hammers?

It's not that people hold National responsible for the local consequences of world-wide recession (although the baying mob will tell you it's Labour's fault for, um ... I dunno, not capitalizing on good times, or something), or that anyone believes it has a silver bullet unavailable to any other government, but it should at least look lively.

The "nothing to see here, move along" approach just won't cut it.

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Re 100 days in government, 20 days of action: Just after New Years the media started on about the new Government being on holiday for 28 of their first 100 days. It was reported with concern and seemed alarming. I converted percentages (28%) into fractions (2/7ths) and found... weekends.

Regardless, a few weak points:

1. (There are lies, damn lies and statistics. This holds true in economics more so than anything other subject I've ever sniffed around.) Apparently NZs 'response' to the 'crisis' is a greater percentage of our GDP than the USAs trillion-dollar package. Whatever, it is obviously not the full picture.

2. I think we are the lucky country. NZ's government, and here I mean our bureaucrats as well as Nat/Maori/ACT MPs, is better able than most country's governments to react to developing situations (contrasted with anticipated situations). Our Reserve Bank, Treasury, Trade, Economic Development officials are the same folk who advised the last government. These policy wonks (all market capitalists, I expect, until about 6 months ago when they converted en masse to being Keynesians) work well and work in a relatively unencumbered system. Driving change in NZ is far easier than in a place like Canada or the US - IMO. I would contend (albeit weakly) that NZ can manage this 'crisis' better than most.

3. (A bit off the point you were making but I'm on a roll.) I love bank bashing. The recent shit about banks being nasty due to charging Fixed-rate break costs is a load of cobblers though. In tough times banks will work with borrowers to avoid mortgagee sales. If a fixed rate can be broken and the cost capitalised (added to the outstanding loan principal) upon refinancing, banks will do it. I feel sorriest for first home buyers from the last four years who do not have many refinancing options in terms of equity or loan term, because they took 100% loans over 30 years as house prices and interest rates peaked.

Not quite ready to sing "We don't know how lucky we are..." though. Times are tough

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