Saturday, April 30, 2011

NZ Government is Anti-Resilience

I don't believe the government has any intention of taking steps to build resilience or even to take steps to create the conditions for communities to create resilience for themselves. I believe the government are actively hostile to the concept of community resilience. I believe a government of the left would equally be hostile to community resilience but they would use bureaucratic rather than economic means to undermine resilience. It is the nature of all politicians to seek to create  dependence amongst those they govern / claim to represent, but this particular government are pursuing a particularly vicious course.

Most countries in the "free" world are suffering to a greater or lesser degree from Sovereign Debt Crisis. In most parts of the world this has been caused by bank bale-outs following the collapse in credit (electronic money) supply as the value of the securities that it was backed by have plunged. The governments have been using many devices to shore up the banks but the end result is the same. The private debt of the banks has become the public debt of the Sovereign Nations.

New Zealand doesn't need to be running up a massive sovereign debt. We only had to bale out a few dodgy finance companies, the bill was less than $4 billion (thats still $1000 for every Kiwi adult and child alive. but small beer compared to the US, for example). In fact we didn't have to bale them out at all. Our government chose to extend the "bank credit guarantee scheme" to these small finance companies in order to show "good faith" to the larger institutions. In my view the gamblers that put their life savings into these institutions that were offering high interest rates and thus were obviously high risk should have been allowed to lose all. But thats another story.

No, In New Zealand the government is choosing keep in step with the US, UK etc, creating sovereign debt by running the economy with spending levels at the OECD average but revenue levels lower than OECD levels. Why the hell would they want to do that!

As is the way with ruling elites, they always manage to find a way to pluck an advantage from other peoples misery. Fortunes have been made in dire times of war. During the depression of the 1930's the banks ended up owning vast tracts of land across the US midwest and so-on. The advantage that the ruling elites seek most in the present crisis is resource capture.

Globalised business knows that in the near future, as a result of peak oil and other resource depletion, it is going to become very difficult to make money by the more traditional business activities like producing goods and services to sell at a profit. This is because de-globalisation ( it is coming whether we seek it or not due to infrastructure failure) is going to cause business to be done on a local scale that does not fit the global corporate model. Their answer is to maintain profit and control by what economists call rent seeking. This means that they control resources such as land,water, minerals, intellectual property and so-on and charge money for access to them. This means they get paid regardless of how profitable or not the human activity requiring these resources is. Masterplan!

The problem is that a lot of these resources are in the public domain as they have traditionally seen as being too important to be controlled by private interests. This does not sit well with the rent seeking elites.
In other parts of the world, bank baleouts and the resulting sovereign debt crisis have resulted in conditions where sovereign governments will have to sell off public assets just to balance the books. Here in New Zealand, that precondition is not present so the debt crisis is being manufactured.

This all sits very cleverly with the Trans-Pacific Partnership Agreement, presently being negotiated in secret, which aims to secure a situation such that when these assets are privatised, a future sovereign government of a signatory country will be unable to re-nationalise the assets without paying punitive compensation to the usurpers.