Labour affordable housing scheme a ‘patch-on solution’

Media Statement
November 19, 2012

Labour affordable housing scheme a ‘patch-on solution’

A New Economics Party Spokesperson Deirdre Kent said that although Labour had the right goal, their proposed method of doing it doesn’t get to the bottom of the problem and is an artificial patch-on solution. “While land remains as an asset class to speculate on, property prices will keep rising. It is private landowners and banks who reap the unearned gains from rising land prices, and this widens the gap between rich and poor.”

“Land now comprises an average of 60% of the value of a property in Auckland,” she said. “These 100,000 affordable homes will be bought cheaply and flicked over for a profit, so at least Labour should put a caveat on each title to prevent that.”

“Only by addressing the rising land price problem at its roots can we wrench power from the overseas owned banks, which took $3.5 billion in profits last year out of the country. Other solutions are artificial and only work for a while.

“Until we wake up and see that the property bubble in Auckland concentrates wealth with landowners and banks, we will not make much progress in bridging the wealth gap,” she said. “Land should be treated as quite a different asset class to buildings. We need a method to take land out of the market place,” she said.

She said Labour’s weak Capital Gains Tax won’t touch the affordable housing problem, because it leaves the family home untouched and is set far too low anyway.

For further comment phone Deirdre Kent, 06 364 7779
021 728 852
New Economics Party

If you have term deposits in a NZ bank watch out!

Yes the “levers are in place” as Minister of Finance announced earlier. In the event of a banking crisis, part of your term deposit could help bail out the bank .

Listen to Radio New Zealand interview by Kathryn Ryan today at http://podcast.radionz.co.nz/ntn/ntn-20121112-0908-banks_making_record_profits-048.mp3. Bernard Hickey says banks ought now to give you a higher interest rate in your term deposit because the Reserve Bank now has in place what is called the Open Bank Resolution. This means that those who hold assets with a bank will be called on to help bail out the bank in a bank crisis. What is so disturbing in this interview is that the size of a banking crisis can be 35% if GDP and an expert being interviewed told us that this figure is common.

Nicole Foss reminded us that Government bonds are much safer. Personally I have moved my term deposits to Government bonds and I know others who have taken Nicole’s advice.

If you don’t want to do this then take Bernard Hickey’s advice. He says that because your term deposit is now at more risk due to the Open Bank Resolution being in place, you should go to your bank and demand a higher interest rate.

All of which reminds me of what Bernard Lietaer has been saying for decades. If banking crises happen that often there must be something systemically wrong with the system itself. Read his website or any of his books, including the Club of Rome book Money and Sustainability, available from Triarchy books.  He lists the number of banking crises, sovereign debt crises and currency crises which have happened round the world in the last ten years. It is horrifying.

He says the on-going financial crisis results not from a cyclical or managerial failure, but from a structural one: more than 96 other major banking crises occurred over the past 20 years, and these crashes have happened under very different regulatory systems and at different stages of economic development.

Do you know how the Trans-Pacific Partnership Agreement (TPPA) will affect business in New Zealand?

The TPPA, a so-called ‘free trade agreement’, is being negotiated secretly by 11 countries round the Pacific rim and is likely to lead to:

  • Loss of sovereignty and ability for the NZ Government to legislate for the well-being of its people. Corporations will be able to overturn our decisions.
  • Decreased ability for New Zealand to protect itself from a collapsing global economy. With capital controls it would be impossible to impose a financial transaction tax, demand a minimum stay of capital etc. New Zealand is very vulnerable because the NZD is the 10th most traded currency and our current account deficit is large.
  • Loss of New Zealand SME’s ability to genuinely compete for central and local Government tenders. Greater competition for local businesses.
  • Increased sale of land and assets to overseas owners
  • Further deregulation of the already weakly regulated and increasingly powerful financial industry. Lessened ability to regulate against toxic financial products.
  • Possibility for Government being sued if legislation reduces corporate profits e.g. climate change, environmental protection, public health (tobacco, alcohol, food, gambling), financial re-regulation.
  • Restricting or requiring payment for access to internet information, thus reducing the ability of SMEs to compete.
  • More overseas ownership of banks, telecommunications, insurance companies, media, supermarkets, elderly care facilities and transport firms.
  • More unemployment and a lower tax take
  • Fewer opportunities for democratic participation by citizens

The 15th (and final?) round of negotiations takes place in Auckland from 3-12 December.  Time is really short.

Please

  1. Go to www.itsourfuture.org.nz or www.fairdeal.net.nz to learn more.
  2. Write to the Minister of Trade, the Prime Minister and ask the negotiators to insert an opt-out clause for future governments.
  3. Organise your sector to oppose the secrecy and the trend to give increasing rights to Trans National Corporations.

This brochure prepared by the New Economics Party https://neweconomics.net.nz Contact: deirdre.kent@gmail.com

Trade, trade agreements like the TPPA and the role of trade

Trade has played a major part in our country’s economy for centuries. What we can’t grow or make in this country can be imported and what we can produce here can be exported.

The growth of international trade has been enabled by cheap oil, cheap transport, including shipping and air freight costs. Last year New Zealand spent over $7 billion importing oil, up 22% on the previous year. Our balance of payments or the difference between what we earn from our exports and what we pay for our imports is a matter of great concern.

If we could replace at least some of our imports with goods manufactured in New Zealand it would greatly improve our balance of payments situation. Facing the reality that we have reached the end of cheap easy to extract oil and that life after peak oil is actually going to be more localised, we must plan policies to match.

The Trans Pacific Partership Agreement (TPPA) The best description of this deal being secretly negotiated is at http://itsourfuture.org.nz. Do read this carefully. Jane Kelsey, editor of No Ordinary Deal – unmasking the Trans-Pacific Partnership Free Trade Agreement is a leading world authority on it. Watch for her talking in your town. Round 15 is to be negotiated in Auckland New Zealand in early December. Who knows, this may be the last round and it may be signed. So let’s get working to oppose it in whatever way we can. The New Economics Party will be working over the next few weeks, that is for sure. Will you join us?

Party decides to campaign against Transpacific Partnership Agreement (TPPA)

At our meeting yesterday the party decided to focus for the next few weeks on fighting the TPPA. This is a secret agreement being negotiated by 11 Pacific rim nations. Our negotiators are in Foreign Affairs and Trade and our Minister of Trade Tim Groser has stated that the negotiations will remain secret and he has not seen the text of the agreement. Pharmac is under threat, genetic modification may come in, you won’t be able to harm banks or they will sue our government for millions.

There now appears to be just one main website informing us about this secret agreement, http://itsourfuture.org.nz. It has a wealth of materials  on their sites.

The reason we decided to focus on TPPA was that if this agreement was signed, almost all the measures we want to take to protect New Zealand from financial contagion would be illegal. Our government would be sued by multinationals for millions.

We urge our members to inform themselves through this site. Our first action will be to attend the panel to be held in Wellington at Downstage Theatre 1-4.30pm. Seems it is booked out when I booked! Hope they get a bigger venue. Why not join the Facebook group fighting TPPA and help? I found this excellent little video there.

 

Wall Street Mafia takeover, Michael Hudson interviewed by Max Keiser

Today’s Keiser Show interviewed the wonderful Dr Michael Hudson of New York.

He had been to the American Monetary Institute meeting in Chicago, to an economic conference in Kansas Sity and attended the banking group of Occupy Wall Street where Sheila Bair spoke two weeks ago.

Sheila Bair has just written a book (and Michael Hudson has written another one). She is a conservative Republican appointed by Bush and was head of FDIC, the Federal Deposit Insurance Corporation during the Global Financial Crisis. After investigating Citibank she wanted to close it down, but Tim Geithner, Secretary of the Treasury, came to a meeting with her in the White House and refused.

Tim Geithner, said Hudson, had resigned from his role with the NY Federal Reserve when Obama came to power. He wanted to succeed Robert Rubin as head of Citibank at $20 m a year. But the bankers came to him and said they needed him in the key role in Treasury. Hudson says “I am paraphrasing here” but Bair said it was like we want our man inside so that no one will prosecute us. We need a smooth sophisticated crook like you and when you step down we will look after you.

Hudson says it is a Wall Street Mafia takeover. Banks don’t make loans to build factories or create jobs anymore. They only lend these days for real estate, gas or oil reserves or for corporate raiding. So you can get loans to buy companies but not to build them up. Credit is only available for looting. They downsize labour, cut costs and grab the pension fund and the economy shrinks.

The deficit spending these days is not to build infrastructure, it is for lending to Wall Street. Ben Bernanke’s helicopter dropping money only flies over Wall Street.

Sheila Bair says the system can’t be fixed without sending a lot of bankers to jail.

The first part of the Keiser Show described a situation where JP Morgan is being sued for selling fraudulent financial products but of course it is a civil suit. No one will go to jail. In the UK the Financial Conduct Authority can’t send people to jail. They can rig LIBOR and someone MIGHT get fined. Where is the criminal justice system?

Which leads me to what is happening in New Zealand. Before Parliament is a very overdue piece of legislation, the Financial Markets Conduct Bill, which has been through its first reading and committee stages. The Commerce Select Committee reported back on 12 Sept. I notice from reading submissions that it is a civil offence not a criminal offence here too. So if banks sell fraudulent products our Government Superannuation Fund and our ACC may lose millions or more but no banker will go to jail.

The worrying thing is that the ECB can put in its technocrats, which is a euphemism for a bank lobbyist, to rule Greece, Portugal and Spain so that nobody can vote for letting banks fail. We must be so vigilant. Canterbury democracy has already failed and we rolled over like lambs when the government appointees continued with Canterbury Regional Council. Who is to say we won’t do it again?

 

 

For fraud and dishonesty of banks – read Janet Tavakoli

I have some new heroines and yes, they are mostly women. Janet Tavakoli, Brooksley Born, Ann Pettifor are among them. Janet Tavakoli I have recently discovered. She was interviewed by Chris Martenson and quite late in the interview she said “Sorry, you are not getting it Chris. I am opposed to the fraud and lies. I am not opposed to all derivatives”. So I downloaded an e-bookof hers called The Robber Barons, and read more. It is the fact that banks and rating agencies misled investors by rating an investment as AAA when they knew it was junk that is the problem. And the banks knew it was junk yet they sold it and demanded they be bailed out. Innocent investors and home owners lost billions.

Yet nobody is in jail. Not a single one. Nobody has been brought to trial. This is unlike the earlier but smaller Saving and Loans crisis where 1000 or so were indicted.

Quotes from Tavakoli’s book: “Fraud thrives and spreads in a regulatory free, highly paid, criminogenic environment. Cheaters prosper driving honest out of the market”

“While there were instances of fraud by borrowers, the key drivers of our housing crisis were fraud perpetuated by mortgage lenders and securities fraud – by some of our most revered financial institutions – that provided money to fuel fraudulent mortgage lending.”

And I have finally found this one: “If a high-on-crack driver crashed his speeding rental car into your house and killed your spouse, you would be outraged if law enforcers took bribes and gave the driver a pass on a blood test. If the judge then merely fined the killer and order you to pay it, you would appeal, wondering what happened to justice. If the government then handed the crack-driver keys to a bigger rental car and presented you with the rental bill, you would certainly protest.

How is it, then that you have remained largely silent in the face of the same sort of behavior by Wall Street and Washington? Bonus-seeking bankers careened off the right path and ran Ponzi schemes that nearly ruined our economy. Bureaucrats and elected officials bailed them out without demanding consequences. Bankers are revving their engines again.”

Yes that is Janet Tavakoli.