The wise, the worried and Dad’s Army
The top topics? Not that you had any doubts, but the evidence in these quotes from a big mailbag tells it all –shocks and scares, mortgages and muddles. Now, read on:
Criticism: “What did you want Michael Cullen to do this year? Go around telling everyone we are all doomed like the old Scotsman in Dad’s Army?
“He’s been telling the country for the last few years that overseas personal debt is too high and not sustainable in the long term.
“This is the reason he – and the Reserve Bank – kept interest rates so high for so long – to discourage people spending up large on luxury or unnecessary goods manufactured overseas.
“Unfortunately, he is not the Minister for Bank Loans or Credit Cards, the Minister for Four Bedrooms and Two Ensuites, not the Minister for Mortgage My Home and Buy a Couple of Apartments in Town and Make a Bundle from Other People’s Labour, not the Minister of Overseas Trips, Big Cars, Flat Screen Tellies that only an orangutan could touch each side at once.
“What he did was give extra income to families who needed it, raised the minimum wages, increased pensions, has done away with interest on student loans. I could go on. Most importantly, he put about $15 billion away over the years into the New Zealand superannuation fund for the day when it will be impossible for our small workforce to pay a decent pension.
“He also started KiwiSaver that the National Party are hellbent on gutting – just like Muldoon did to a Labour Party retirement savings fund in 1975 – was a member of a government along with Jim Anderton that encouraged the Post Office to start Kiwibank and put a little bit of competition between the main street banks.
“He and the Labour government have reduced the government debt which he can control in good times – exactly what you advocated in your article but forgot – probably deliberately – to mention. After all, the New Zealand press has always been politically one-eyed as long as I can remember and that is 45 years I have lived in New Zealand. So why change now?” – Name provided with an assurance “am not a member of the Labour Party”
Praise: “An excellent commentary on the global financial meltdown. In a sense, the New Zealand government has got off lightly.
“If the collapse of our finance companies had started last week instead of last year, the government would now be expected to guarantee depositors’ funds with a bailout.
“One thing we can count on. The smart money people – the really smart money people – are already positioning themselves to exploit this dire situation and make an opportunist killing.
“Much of the bailout cash injection will end up in their pockets.
“There will be many losers, big and small, but there will also be some very big winners. These people simply move faster than governments and faster than the general public and small-time investors.
“Expect a shift in ‘financial power’ away from Wall St and other traditional centres of money-churning, and a crop of new billionaires in Toronto, Rio de Janeiro, Sydney, Hong Kong, Singapore, Bangkok, Mumbai, Qatar, Hamburg and Zurich. – Arch Thomson (abridged)
Fannie and Freddie: “I am not a now-wise commentator, but I did see it coming and ditched all investments in shares and finance companies two years ago. Okay, so I was a little early so far as the sharemarket is concerned but nobody’s perfect.
“Burned in 1987, I learnt from my mistakes and this time round took early action. However, I do feel sorry for all those who thought house and share prices would go up forever, and they could borrow forever on the back of that.
“As far back as 2004 the Reserve Bank was warning that house prices were unsustainable, that people could not continue to live beyond their means – spending $1.17 for each dollar earned, etc. But human nature being what it is, (most) people tend to ignore the warnings until it actually happens.
“Which doesn’t mean I am not angry at those who have caused this mess, not just the Wall St money men, but the American politicians (mainly Republican) who did nothing about it for years. Because it will still affect me and everyone else in one way or another.
“Which brings me to your column statements: ‘If only someone had ... taken Fannie Mae and Freddie Mac seriously ... and questioned their balance sheets’.
“Well, actually someone did. As far back as 2003, the Democrats in the US Congress were concerned about them and wanted to pass regulations to control what they were doing, but the Republican-controlled Congress prevented it in the name of not interfering in free markets. C’est la vie.” – David Williams
Kipling again: “There’s a nicety about your recent column quoting Kipling’s The Gods of the Copybook Headings with reference to the gods of the market.
“A couple of weeks ago the New Zealand Herald ran a bizarre opinion piece by Roger Kerr of the Business Roundtable cautioning us about being too hasty in our condemnations of the market.
“Kerr blamed government interventions for the current world crisis but did concede that questions will be asked about corporate governance and executive pay. He quickly softened his concession with a Kipling quote: ‘Let us admit it freely, as business people should. We have had no end of a lesson: It will do us no end of good.’
“Originally written about the Boer War, it was later revived by Margaret Thatcher in her maiden speech as PM, looking back to Edward Heath’s defeat by the miners in 1972 and ahead to her own attack on the union movement.
“In case we didn’t get the message, the Herald followed it up with another opinion piece four days later, this one from Alasdair Thompson of the Employers and Manufacturers Association. He refrained from quoting more Kipling.” – Gerard Hopkins