Richard Prebble's Social Credit nightmares

21.10.20

 

Richard Prebble mentions Social Credit in more articles these days than any
other commentator. Respected columnists like Simon Wilson, Bernard Hickey,
and Brian Fallow have been writing articles about what the Reserve Bank is
doing (creating money - which is something Social Credit always claimed it
could do, but were ridiculed for) but they're studiously ensuring that they don't
mention that fact.
Richard Prebble on the other hand must be having nightmares about the $100
billion dollars the Bank is creating right now out of thin air.
He clearly finds some appeal in the Walter Nash quote "If social credit works,
no one else has to" that he has used in several columns but he fails to
mention that it was Walter Nash, who as Finance Minister in the 1935 Labour
Government, introduced the legislation that nationalised the Reserve Bank
and introduced social credit.
In an impassioned speech to Parliament Walter Nash spoke about what the
newly nationalised Bank would be able to do for the country.
“Government ownership is not enough. Government right to appoint directors
and governors is not enough”. “That Government has to get control of the
necessary machinery to utilise the monetary factors and the credit and
currency in the best way that they can be used for the benefit of all the
people”.
“The object is the organisation of credit resources so as to ensure the
maximum utilisation of our natural resources and the distribution of the
product in a manner that will ensure the highest standard of living for all who
render useful service”.
A change in the Bill “Means that Treasury bills could be discounted
(purchased by the Reserve Bank) to the extent of £25,000,000, the whole of
the estimated revenue, if the necessity arose”.
“The next point in connection with the powers of the bank is the right to buy
and sell Government securities. It means that the bank has the right to take
up, from the Government, securities to enable the Government to carry out its
policy in connection with development works”.
“The amount the Government should get from the Reserve Bank will be
limited only by two things. If we find unused labour and unused raw material,
and alongside those two factors there are lacking things necessary for the
well-being of the people of the Dominion, then it is our work to see that the
necessary stimulus of credit is given to the labour and the materials to enable
the asset to be produced, and the asset, when produced, is the security given
against the loan made by the Reserve Bank to the Government”.

“In addition, it is proposed to save a good deal of money in connection with
the underwriting of Government loans. In connection with money obtained
from a Government Department [The Reserve Bank], the cost of course, is
practically nil, but, in regard to the raising of money overseas, it has been a
heavy load on the community, and we want to get rid of that load at the
earliest possible moment”.
Pure unadulterated social credit.
What Mr Prebble fails to mention is that his Walter Nash quote came after a
visit to the UK where he was ‘entertained’ by the then privately-owned Bank of
England, which was making significant profit from lending money it created
out of thin air to New Zealand, and he very soon dropped the use of New
Zealand's own money from its own Bank.
That money was being used to finance the building of the 33,000 state
houses, and infrastructure projects. An overdraft at just 1% interest was
provided for the Dairy Board, Apple and Pear Marketing Board, and other
producer boards, so that they could pay producers immediately for their
product and repay the overdraft months later when the butter, apples, cheese,
and meat was sold on the international market.
I guess it's not surprising that Mr Prebble, who played a major part in selling
off state assets that had been paid for by the majority of Kiwis, to a very few
wealthy individuals who then hiked the charges for the services those
businesses provided so that they could extract more money out of the pockets
of ordinary Kiwis, and then went on to lead a party (ACT) that advocated the
market should rule so that those who had more could take advantage of those
who had less, and now sees the rise of Social Credit, a party that advocates
using the country's own bank to create the country's own money to benefit
those ordinary kiwis and rebuild the country’s assets, should be having
nightmares.
Officials from Treasury who assisted Mr Prebble and his colleagues to
unleash neo-liberal economics on the country, and who now dwell in the dim
dark depths of The New Zealand Initiative (a think tank [read lobby group]
dedicated to retaining failed neo-liberal economics) may be having nightmares
too.
Karma maybe?