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Photo credit Matt Lamers
LETTERS TO EDITOR | LATEST
Photo credit Matt Lamers
Who controls the money
Whanganui Chronicle - 9 December 2020
A few weeks before Christmas 1935 – yes, eighty-five years ago – a crucial question was being debated in Parliament. Should our means of exchange, our monetary system, be responsive to the democratic decisions of our elected representatives, or should it be entrusted to a few private directors? Now Bryan Gould (9th Dec.) confronts us with the same question – why such an important area of economic policy is removed from democratic accountability?
According to Hansard, the newly elected Prime Minister, Michael Joseph Savage, accused an Opposition member of “being afraid that the people’s representatives are not capable of thinking rationally or of representing the true interests of the people – a curious attitude to take.” He added :”Presumably he thinks that Ministers of the Crown are incapable of using their judgement. That seems to be curious reasoning, Ministers of the Crown have come here with responsibility. I happen to be one of their number....”
The Bill being debated was one designed to assert state ownership of the Reserve Bank in order to enable direct funding of projects which would feed household incomes via wages and salaries. It was enacted in 1936, having a transformative effect on the economy, but since then the RBNZ has acted more like a private institution, in spite of the Prime Minister often displaying Savage’s photograph in her office.
The Chronicle must be commended for printing Bryan Gould’s comments. More please!
Heather Marion Smith
Whanganui
Who will address the poverty challenge
Whanganui Chronicle - 9 December 2020
The question might be rhetorical but Rob Rattenbury (30 Nov.) gets it right asking why not the State being our major landlord when it comes to rental houses. He reminds us of this being the policy of the first Labour government. But he neglects to point out that the rapid roll-out of state dwellings was not funded by rented money.
John A. Lee and Bob Semple insisted on Reserve Bank funds at a minimal charge – something Grant Robertson derides as “Muldoonism”, preferring instead to authorise Kainga Ora (Housing NZ) to borrow $7.1 billion on the private debt markets. This was quietly announced in the NZ Gazette last January – another indication that the PM’s declaration about governing for all the people includes the profiteers from public debt.
Business commentator, Rod Oram, suggests the Reserve Bank buy up U.S Treasury bonds. Heavens above!
The RBNZ is perfectly capable of purchasing our own Treasury’s bonds, as advocated by several well-known economists, but by only one political leader – Social Credit’s Chris Leitch. Where are the others? They all bemoan the housing crisis while timidly avoiding financial solutions.
The latest Salvation Army report on poverty calls for courageous policies. Who is up for the challenge?
Heather Marion Smith
Whanganui
Flaws in the system
Otago Daily Times - 3 December 2020
The financial crash caused by the coronavirus pandemic has hit New Zealand and the globe hard.
In 1936, the Labour Government under the late M.J. Savage used the Reserve Bank of New Zealand to provide housing and two years later provide a social security system to help the genuinely needy in society.
Now economic expert Shamueel Eaqub states that the actions of the Reserve Bank are consequently "ripping apart the social fabric of New Zealand."
New Zealand can fix the housing crisis once more but the Resource Management Act of 1991 would potentially need to be dealt with first.
Economically, we need to stop the use of privately owned banks and instead use a national credit authority independent of parliament to scrap debt and interest so that taxpayer money can be used on essential services for New Zealanders.
Social Credit's founder C.H. Douglas (1879-1952) these ideas are more vital now than at any other previous point in history as more jobs are automated.
As we see at the supermarkets and public libraries, full time labour becomes more redundant, leading to more jobs and volunteer positions of value to people and the community.
This system may have its flaws, but can only come about by change and progress.
Thomas McAlpine
Dunedin
Captured by vested interests
Christchurch Press - 26 November 2020
Steve Wratten is spot on in raising the subject of “External costs” (23rd) of persisting with (primitive) road transport on public health and the environment. The time is well past that we had a Royal Commission into local governance (and NZTA) given that the rural sector is continually hectored about carbon sequestration and water quality while no effort is made to divert the burgeoning distribution of people and produce to our underutilized rail and/or coastal shipping which sees this country locked in a cycle similar to “a dog chasing its tail”, even to the extent that they appear to ignore the international global warming debate!
The ludicrous imposition of speed limits through the Woodend/Waikuku sector ( bypass planned in the 60s and still possible right to Saltwater Creek!) will further diminish vehicle efficiency and the new northern outlet will severely impact on the two adjacent quiet city suburbs.
You have to wonder if the present crop of “planners” have ever heard of “unintended consequences” but then we appear to be trapped in an era where “there are plenty of educated ‘men’ who understand very little” –even worse they seem to get elected / promoted or, captured by vested interests?
John McCaskey
Waipara
Fairy Dust Derivatives
Whanganui Chronicle - 24 November 2020
Steve Baron (21 Nov.) rightly condemns the way our Council staff resorts to interest rate swaps in futile efforts to balance the books.
Like other fairy-dust derivatives (collateralised debt obligations, special investment vehicles etc.etc.) such swaps serve to expose the severe weaknesses in the way the financial markets are propped up. If our elected council members actually understood this complicated process they would surely question it.
But the solution is not, as Steve Baron advocates, adopting a floating rate of interest.
A bolder policy would be to have no interest at all on council borrowing = the NZ average currently at 6.4% according to latest LGNZ figures. That’s over six dollars in every hundred going to private owners profiting from local body debt. And that’s not including the GST.
Now that the public has discovered the power of our Reserve Bank to create (“print”) money, there is a growing realisation that councils could be directly funded instead of depending on selling bonds through the semi-visible LGFA (Local Government Funding Agency) spawned by Treasury’s Debt Management Office back in 2011.
In a press release (16 Sept.) Local Government NZ president, Stuart Crosby, stated that “...we need every idea on the table to jump-start our economy”.
I trust he means it.
Heather Marion Smith
Whanganui
Hot air
Christchurch Press - 23 November 2020
If the “hot air” generated by the dinosaurs in the “G”CC & Ecan were bottled it could lower the carbon footprint in excess of that saved by the recent “lockdown”! Yet here we are 20 years on from when I suggested to Vicki Buck’s council, (and still filling the “gravy-train riders pockets” from the public purse,) that the Deans Ave—Saleyards site should become the provincial transport hub.
I have yet to see anyone of these so-called experts come up with a better site—already bare, adjacent to the main line, ideal access from all directions, with least traffic disruption to inner city traffic, and easily obtained by using the still available Public Works Act. I have to wonder what their “vested interests” are because it surely is not the citizens of this province or Christchurch revival for that matter. They want a “gold-plated” memorial to stupidity with their “Mayoral” plaque attached costing millions when all that is required is a covered platform over the tracks and parking/dispersal areas on each side outside of which the aforementioned site has acres left for hotels & services.
Once upon a time I could commute to the city by train every day from Waipara when the single track interspersed with passing loops was busy with many freight and passenger services and signaling was via copper wired phones and on-train tablets enabled safe passage---come-on you guys, this is the 21st century, much of the developed world has and is moving on yet your thinking is still to catch up.
If we can stop Kiwirail selling the scarce traction units presently being flogged off overseas (South Island presently deficient!) and accelerate the rebuild of the many carriages lying about (many currently en-route by road from Tauramanui to the Hutt workshops) and instead of leaning on the “shovel-ready”, provincial rail should be a reality within a year or two. Stop the expensive “yakity-yak” and do it.
John McCaskey
Waipara
Drones in the Beehive
Christchurch Press - 15 November 2020
The Ministry Of Works (Steve Cox 14th) was, next to Treasury, the most powerful of all government departments in NZ , its experience and institutional knowledge gained over 120 years was second to none in guiding the building of all our main existing infrastructure (including housing and hydro) until sabotaged by the blitzkrieg of the Roger Douglas neo-liberal “vision” which was founded some fairy tale of “increased efficiency” on 1st April 1988. (April fools day!) Bolger’s National cemented it in place and NZ has “gone to hell in a handcart” ever since.
The whole saga that spawned our present sorry state is explained in Peter Dyer’s 2019 “Rottonomics” (esp. Chapter 10) and should be required reading for anyone wondering how such a situation could be orchestrated by supposedly intelligent people whose lack of insight into the consequences of their actions has brought hardship to thousands (e.g.leaky homes?) and a mortgage against our future generations, especially as the present “drones” in the Beehive seem fixated on washing the QE—printed money, through the corporate & wealthy’s pockets (their sponsors?) to be later borrowed back plus interest before anything is built!
John McCaskey
Waipara
Reserve Bank’s balancing act
Whanganui Chronicle - 24 November 2020
What do we think about the Reserve Bank’s balancing act? (13 Nov.) Answer? Actually the RBNZ is pursuing an un-balancing act! The latest injection of $28 billion into the funding-to-lend scheme plus even lower mortgage interest rates will inevitably push up housing prices thus shifting more asset wealth into the coffers of the top income deciles. It’s a recipe for the type of sub-prime mortgage which kicked off the financial meltdown of 2008.
True that our RBNZ has the sovereign power to create (“print”) money. But it is shockingly irresponsible to route new money through the banks, for their profit instead of directly to over-taxed councils and District Health Boards, let alone for social housing. All this under a Labour Government?
Heather Marion Smith
Whanganui
Inequality magnified by Govt
Whanganui Chronicle - 9 November 2020
Like Martin Visser (7th Nov.) I am sceptical about the government’s intentions to combat poverty, when its own policies exacerbate inequalities. The chief culprit is the iniquitous “funding-to-lend” scheme. It’s the proverbial elephant-in-the=room which few commentators dare to question. Economics writer, Bernard Hickey, is one critic, while Social Credit’s Chris Leitch, is the only political leader who has dared to challenge Finance Minister, Grant Robertson, to stop the nonsense and allow the Reserve Bank to buy the weekly issue of Treasury bonds directly, rather than allow the big banks first pickings. Cushioned by this easy funding, the banks are duly lending, as required – but favouring borrowers with least risk. No wonder the already well-heeled are buying up real estate and pushing up prices.
Sadly the general election was between one social credit party and umpteen social debt parties, with an overwhelming preference for the latter. Oddly, unions and business are united in their approval of a system which pays out millions of dollars a day in debt-servicing to rich foreign creditors. Yet, from what remains, unions expect further pay increases. Martin Visser advocates some kind of wealth tax whereas it is a flawed monetary model which is generating the problems he abhors.
Heather Marion Smith
Whanganui
Social Credit not Social Debt
Christchurch Press 28 October 2020
It is a pity that Lana Hart ( Monday 26 Oct) waited until after the Election to
express her dissatisfaction with cost of living.
If only she had looked into Social Credit's policies. She would have found the
ready solutions to most of the issues she raises. Interest free loans from the
Reserve Bank paid directly to the Government could result in spending to
promote social well being. Money spent at no cost to taxpayers could be used to
subsidise solar water heating to reduce electricity bills.
Removal of GST would mean a near15% pay rise for all - those on the lower
incomes benefitting the most .
It is a sad day for everyone and the planet that the country voted for Social Debt
rather than Social Credit.
Mary Grant
Mairehau