Hard News: Is that it?
327 Responses
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BenWilson, in reply to
This sits nicely alongside what the Nats are looking to do with the food stamp card.
Not really. It's not much like that at all. The money is still your own money, to be used as money, when it you retire, for whatever you want.
I guess I just don't buy into this whole "sanctity of our own money" thing anymore. I did before I lived in Oz, and I was annoyed by their super scheme, but after only a few years it made one hell of a lot of sense. It's a big chunk of real money sitting there for me one day.
The other reason I don't buy the sanctity of money is because we already have income tax which is exactly the same thing, the government taking your money and doing something supposedly in the public interest, which should include your interest. That's many times more fucked up in terms in compulsion, but socialist buy into upping that *all the time*. Then they scratch their heads when right wing governments are elected that squander their money, sell of their investments, and bail out their mates.
They can't bail out their mates with funds from schemes that do not actually belong to the giant slush fund that is the government tax coffers. It's like putting everyone in the country's future in trust.
To me compulsory savings are simply a highly practical middle ground that have been proven to enrich the countries, and the citizens in them, where substantial schemes have existed. As I say, they're enforcing good management of funds, something socialists are always banging on about as should be done to companies, rich people, fund managers, and the government. The idea of compelling themselves to do it seems to fill them with horror. In my mind that's how far neoliberalism has spread that even left-wing people are horrified at the thought of compulsion around money, except when they can take it from "wealthy" people in the form of tax.
Yes, the funds could be lost in some bad way. The fund managers could invest them poorly, and they lose value. They could be stolen by crooked accountants. They could be invested in immoral things.
But there are many, many ways to tinker with the overall solution to make these things less and less possible. You can place rules around the investments so that they can't be put into things that are too risky - probably insisting on a wider spread of asset classes would achieve that. Make sure that pension funds have to have t-bills, property, local stocks, and utilities in them, in certain proportions. Or maybe make quite strict money management and auditing certification a requirement for certain classes of investment, so they can't, for instance, have too much debt. You can place the stockmarket part of the fund entirely in the hands of person owning the fund, if they apply for the right to do this, then they can invest it exactly how they like, overseas straight into Lockheed Martin, if they have no souls, or locally into something righteous if that is important to them. So long as its invested, rather than simply being spent, that's the main purpose sorted.
And don't forget they've still got ALL of the rest of their money to spend exactly however they want. If they're ambitious, they can save and invest some of that too. They can get a mortgage. They can buy consumer electronics. Or they can pay the rent and for food, if they're low wage.
If they really are facing hardship, as sometimes happens, then they should be allowed to make application for the funds to be prematurely withdrawn. That makes good sense when people lose their jobs and the economy is down and they can't get a job. It just doesn't make sense when their idea of destitution is that they can't afford the deposit on a brand new car. In those cases, they can bloody well save up the other money they have, or do without.
I'm not even against the food stamps idea. I just think everyone in the country should get them. To single out the young unemployed is simply attempting to stigmatize them for the crime of being young and the economy having been mismanaged by their elders.
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Kumara Republic, in reply to
I think what Ben leans towards is a syndicalist or co-op model, rather than the paternalist model you refer to. If anything, things seem headed towards the notorious Golden Straitjacket system.
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Sacha, in reply to
there are viable alternatives in the form of online work with minimal training
Nigerian investments are also a thriving opportunity.
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Sacha, in reply to
doesn't seem so far adrift from the ideology that national proposes in these welfare reforms
true
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Sacha, in reply to
the sanctity of money
History suggests governments may respect that less than you think - easy enough to change law to affect those other pools of money, even nationalise them in the name of some fiscal emergency. Just as it was in the other direction to let the bankers back into the henhouse by repealing Glass-Steagall, for instance.
However the long-term motivation and focus may differ between sovereign governments and private financial entities. Who do you trust to share the interests of our children and grandchildren?
In my mind that's how far neoliberalism has spread that even left-wing people are horrified at the thought of compulsion around money, except when they can take it from "wealthy" people in the form of tax.
Getting left-wing politicans to unblinkingly echo the phrase "tax burden" rather than talking about shared investment is an impressive ideological success.
Another might be creating a belief that most tax comes from "wealthy" people, so therefore they should naturally have a stronger say about it. The current government closing some favourable property investment tax arrangements was an interesting move against that. Probably created some internal factional tension which a competent opposition could exploit.
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Danyl has a post about the broken market for CEO salaries (warning: discussion mentions Rand). He links to a story about a local survey:
Top chief executives are being paid up to 50 times as much as their average employees – and the gulf between boss and worker is widening.
...The BusinessDay survey estimates that, on average, a chief executive's pay last year was just over 18 times that of an average worker at the same company. It was based on pay disclosures for 2010 and a short questionnaire sent to 34 listed New Zealand companies.
Also links to a US study:
"Lately there have been legitimate concerns about CEO pay," said Stanford Professor Robert Daines. In 1992, the average CEO of an S&P 500 firm earned $2.7 million. By 2000, average pay for these CEOs had increased more than 400 percent, to more than $14 million. When compared to the pay of average workers, the increase is even more dramatic: In 1992, CEOs were paid 82 times the average of blue-collar workers; in 2004, they were paid more than 400 times those salaries.
"Barry Bonds makes a lot of money because he's a great baseball player. In general, the best-paid players are also the most skilled," said Daines. "The main question is: Is the CEO labor market working in the same way? Do you make more money if you are better at it? Or is the market for CEO pay broken, in that CEOs receive high pay for something besides skill—like having friends on the board?"
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History suggests governments may respect that less than you think - easy enough to change law to affect those other pools of money, even nationalise them in the name of some fiscal emergency.
History suggests that governments can attack dissidents with helicoptor gunships, or poison gas. But in societies in which the rule of law takes quite high precedent, it is quite possible to set up legal institutions that are very difficult for the government to supersede. Yes, they can just seize any funds they like, but it could come at an extremely high cost to them politically. Considering the current ruling parties can barely make any changes at all without consulting the polls in apprehension, I think dipping their hands into funds belonging to NZers of all political affiliations would be suicide unless there was a very, very good justification, in which case, I'd actually want to hear it. They haven't been able to do a damned thing about National Super in 30 years. I highly doubt they'd start seizing pension funds.
Who do you trust to share the interests of our children and grandchildren?
I don't trust anyone, not even myself. I think they are the best custodians of their own interests, in the long run, and the more empowered they are, the better those interests will be catered for. I have some other ideas about how that could be done.
I think what Ben leans towards is a syndicalist or co-op model, rather than the paternalist model you refer to.
I don't know if that's true. My ultimate aim is for increased wealth and decreased class difference, which I think would have transformative effects on the way business is done, although I'm actually not bold enough to predict what those would be. Yes, ultimately, I have various visions of possible utopias, but utopianism has been around for a long time, and it's always been short on the "how do we get there?" part. We have to acknowledge that we live in a capitalist world, and that smashing that world apart has actually been tried several times, at enormous human cost, with mixed results. We've also tried a middle path of progressive taxing, but still there is ample inequity. We've tried weakening that, to see if that helps, but it's clearly made the inequity worse, and yet to increase taxation has become politically difficult.
That does not mean we're out of options. We can still tinker with lots of ways of working on social inequity whilst keeping ourselves productive. It's on us to work out what those should be, rather than centuries old philosophers, or trusting to our leadership, who clearly have no idea. It's amazing how much quite small stepwise changes to the economic system can change things in a short time. And things that clearly make society as a whole work better end up being bipartisan.
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Sacha, in reply to
Considering the current ruling parties can barely make any changes at all without consulting the polls in apprehension, I think dipping their hands into funds belonging to NZers of all political affiliations would be suicide unless there was a very, very good justification
I recall hearing about 1990s NZ governments looting accumulated EQC and ACC funds. The current lot suspended contributions to the Cullen fund (pre-paying some of the upcoming boomer superannuation bulge) and transferred KiwiSaver obligations from employers to employees. Doesn't seem to have hurt their poll ratings one jot, though that could also be the lack of anyone holding their feet to the fire.
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BenWilson, in reply to
That's quite a far cry from taking the KiwiSaver funds and using them arbitrarily. That would go down about as well as if they reached into 2 million bank accounts and tried to do the same thing. Because it would actually be the same thing.
Yes, this kind of looting is possible, if the implementation of the policy is done extremely poorly, like, say, leaving it entirely to the government to manage the money, rather than simply letting the government set rules about how it can be managed. This is one of my biggest objections to the Cullen Fund. The very idea of a fund of savings that the government can steal is part of the reason I'm not in Kiwisaver yet. I do have private super, though, and my ozzie super. The first of those would be very, very hard for the government to steal. The second, impossible.
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Sacha, in reply to
Isn't that premised on mistrusting government more than private providers though?
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Its premised on trusting clear definitions of roles and the impartiality of bureaucratic institutions over magical "mandate" driven management.
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James Butler, in reply to
I’m not even sure if we’re arguing at all.
Heh. On PAS people often agree so furiously, and disagree so politely, that it can be hard to tell the difference.
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Sacha, in reply to
Do you reckon we're any different in person? Just curious.
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Steve Barnes, in reply to
Do you reckon we’re any different in person?
In person, the silence can mean so much more.
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Sacha, in reply to
You managed to find silence at the Blend?
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Steve Barnes, in reply to
You managed to find silence at the Blend?
Yup, on Queen St.
Still, more pleasant than Tottenham eh?.
If only people would stop trying to make Auckland a "World Class City" its character could come shining through. -
Steve Barnes, in reply to
However the long-term motivation and focus may differ between sovereign governments and private financial entities. Who do you trust to share the interests of our children and grandchildren?...
...Another might be creating a belief that most tax comes from “wealthy” people, so therefore they should naturally have a stronger say about it.There used to be this wonderful thing called Noblesse oblige
is sometimes used to summarize a moral economy wherein privilege must be balanced by duty towards those who lack such privilege or who cannot perform such duty. Finally, it has been used recently primarily to refer to public responsibilities of the rich, famous and powerful, notably to provide good examples of behaviour or to exceed minimal standards of decency.
One of the founding principals of New Zealand was the desire to build an Egalitarian society, a Classless society. Well, we nearly got there, those at the top of the heap have no class whatsoever. They are far from noble and far less obliging.
Tim Watkin has this to say on the subject.If John Key wants to talk about obligations and responsibilities, he should listen more to Warren Buffett and less to David Cameron. Building community is about everyone sharing those old rights and responsibilities
David Camoron said it..
"Irresponsibility. Selfishness. Behaving as if your choices have no consequences. Children without fathers. Schools without discipline. Reward without effort. Crime without punishment. Rights without responsibilities. Communities without control. Some of the worst aspects of human nature tolerated, indulged - sometimes even incentivised - by a state and its agencies that in parts have become literally de-moralised."
Trouble is, he was not talking about his ilk.
Might as well go away and have a game of
Difficult Dungeon -
Kumara Republic, in reply to
Trouble is, he was not talking about his ilk.
Cameron's logic: if square pegs don't fit in round holes, then grab a bigger hammer. Such an approach is doomed to fail because it's synonymous with attacking the symptom.
And if anything, Cameron's rhetoric isn't one of cracking the whip, but rather one of moose-in-the-headlights panic. Mubarak-esque threats to black out the Internet is just one obvious sign.
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DexterX, in reply to
With respect – many of these posts, to me, show a lack of an understanding of the nature of money and how the economy operates.
Looking at the size of the money supply and the cash that is actually in circulation is a good place to start and the role of financial intermediaries (particularly in the GFC) is a good place to start.
I feel that the "developed world" is at the outset of a period of economic stagnation that will endure for decades.
The arbitrary wave of the socialist magic want is not going to make it go away.
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DexterX, in reply to
Trouble is, he was not talking about his ilk.
Onoe could add to the list - bond and capital markets without adequate regulation..
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BenWilson, in reply to
With respect – many of these posts, to me, show a lack of an understanding of the nature of money and how the economy operates.
Feel free to pitch in. What do you think should be changed, if we are to avoid those decades of stagnation? Or do you think avoiding them is impossible? Or even undesirable?
To me, the source of the stagnation is obvious. Western economies no longer own the means of production. There is quite literally nothing that they make that can't be made somewhere else cheaper.
It's capitalism rebalancing the world economy. The rebalancing is obviously going to involve the developed world getting relatively poorer and poorer, although wealth in absolute terms might rise overall - if industrial output continues to rise and technology continues to make new things. But the distribution of the wealth in the developed world is likely to become less and less fair as the main means by which wealth can actually be transferred to poor people, through their labour, dries up.
It's quite a bizarre thing, really, that a fairer distribution of world wealth could arise from the system. By which I mean it will be spread around the world better - the actual distribution of it within any small piece of the world will be more iniquitous than most Western countries have been accustomed to for a long time, poverty will be visible everywhere, right next to extraordinary wealth. Much like it was for most of human history.
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James Butler, in reply to
Do you reckon we’re any different in person? Just curious.
I talked to you for, like, 30 seconds at the OGB, so I can't really comment :-) I didn't go around introducing myself much, but those few I chatted to were unfailingly friendly and polite - I don't know if that was a large enough sample to make predictions.
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Sacha, in reply to
I talked to you for, like, 30 seconds at the OGB
Wish had been longer, always happens at those things. Next time
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Steve Barnes, in reply to
Looking at the size of the money supply and the cash that is actually in circulation is a good place to start
Circulation is more important than size, the faster the "money" moves, the more it is worth, think about it. Every time money changes hands it creates something and these days even debt is held to be worth something. For instance, if I go down town and buy a widget the widget maker gets payed for making the widget, the widget shop guy gets a cut, the taxman gets a cut, the guy that drives the downtown bus gets paid and then goes and buys his own widget, the poor bastard that cleans the widget machine makes a buck and buys a turnip, the turnip grower... I think you can see my point.
Anypoo, the point is that "Money" is only a token and token traders can go get fucked. the value of those tokens is illusory, meaningless. It is the movement of those tokens that allows the creation of goods and services, using them for anything else, like pretending they are magical or make wonderful clothes for Emperors, diminishes that movement and therefore their worth. -
Rich Lock, in reply to
Circulation is more important than size, the faster the "money" moves, the more it is worth
It is a slow day in the small Saskatchewan town of Pumphandle and the streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.
A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.
As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.
The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
The hooker rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 and leaves.
No one produced anything.
No one earned anything.
However, the whole town is now out of debt and looks to the future with a lot more optimism.
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