The wise, the wor­ried and Dad’s Army

Auckland City Harbour News - - News -

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

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