– This is a great little video. Pass it on…. ➡
http://www.youtube.com/watch?v=QM-mfEMssy8
– research thanks to John P.
– This is a great little video. Pass it on…. ➡
http://www.youtube.com/watch?v=QM-mfEMssy8
– research thanks to John P.
– I love my new country but I do believe that New Zealanders can be naive. Perhaps it is because of their long isolation. But the stuff John Key, our current conservative PM, is trying to implement here is the same stuff that the Chicago Boys have tried around the world with repeatedly disastrous consequences.
– And I’m reading that it will likely pass 61 to 60. Isn’t it utterly amazing that not one of those 61 people will change their vote when the majority of New Zealanders clearly do NOT want asset sales. One can only hope that the voters remember the transgressions of the 61 later at the polls.
– Read this analysis – it will curl your hair.
– Dennis
– – – – – – – – – – – – – – –
The Key government’s asset sales agenda is derived from the Washington Consensus – a set of Wall Street-driven policies that were pronounced dead after the global financial meltdown in 2008.[1] The New Zealand government, however, remains loyal to this failed ideology.
Why? The obvious link is Prime Minister John Key – a former investment banker for Merrill Lynch, the world’s largest brokerage failure.
In most other countries, state asset sales have become a last resort on the road to poverty and ruin, but for the Key government, asset sales are “business as usual.” [2]
So what’s really behind asset sales?
All wealth extraction is facilitated by international and national economic policies, coupled with the private banking system, which together deliver benefits to the financial elite by transferring wealth upward within and between nations.
These “free market” reforms are collectively termed neoliberalism.[4] Simply, they provide big business with improved legal access to markets and assets worldwide.
The Key government’s asset sales agenda fits obediently into this ideology ? the same ideology that ushered in financial deregulation, record bank bailouts, and the Second Great Depression.[5]
Governments in New Zealand have succumbed to the neoliberal movement since 1987, when the first round of asset sales began, as a Reagan-Thatcher-Douglas experiment.
Under these policies since the 1980s, New Zealanders have experienced almost the greatest increase in income inequality in the OECD.[6]
The deep roots of neoliberalism
Modern liberalism dates back to the end of World War II, when the Bretton Woods agreement formed the IMF and the World Bank, establishing the US dollar as a de facto world reserve currency, and installing policies aimed at stabilizing the world monetary system. Free private capital flows between countries were restricted because it was believed that international financiers had caused the Great Depression.[7]
For the next three decades, Western governments were characterized by liberal, socially democratic policies that sought to safeguard national economies by keeping trade in balance. The world achieved exceptional economic prosperity during this era known as “The Glorious Thirty” years.[8]
But by the 1970s, corporations began to exhaust the spending power of the “consumer society” as total debt increased under the mathematical bias of fractional reserve banking, exacerbated by the Vietnam War.
Policymakers were faced with a choice between more intervention to protect local economies and social justice, or a more liberal business agenda – neo (new) liberalism. Wall Street interests mobilized to advance a host of “business first” policies that became the Washington Consensus, and the euphoria for deregulation ultimately placed Wall Street beyond the reach of democratic public accountability.
Rising poverty and debt for the majority
Multinational corporations proliferated and expanded, outsourcing cheap foreign labour, extracting oil and other mineral wealth, leveraging weaker economies and favourable exchange rates to monopolise global markets, often assisted by IMF and World Bank development loans.
Globalization is defended as a strategy to boost Gross National Product (GDP) and therefore investment in jobs. But in reality, free trade strengthens capital bargaining relative to labour, so that people who derive most of their income from returns on capital (the rich) gain, while people who earn most of their income from labour (the majority) lose.[9]
The outcomes of neoliberal policies have been similar everywhere in the world. Deregulated markets have benefitted the local educated elite who work with the corporations, while the majority of people have experienced a decline in living standards, with a permanent widening of the gap between the rich and poor.[10] [11]
Neoliberalism has been catastrophic. It has accelerated sovereign debt, collapsed the financial sector, and it has caused the highest ever level of global unemployment, described recently by the International Labour Organization as a worldwide crisis.[12]
Meanwhile, the corporations and the international banking aristocracy have amassed enormous unproductive wealth via their trickle-up incomes.
“Free trade” unlocks foreign assets
The post-World War II version of free trade promoted “fair trade” and often achieved a healthy balance of payments. But the Washington Consensus threw caution to the wind, allowing big business to dominate government policy, making deficits routine.
Free trade agreements, such as the North American Free Trade Agreement (NAFTA), have virtually destroyed US-based manufacturing, leaving Main Street America with a service sector economy.[13]
The Trans Pacific Partnership Agreement (TPPA) signals yet another secretive free trade deal intended to free-up access to foreign assets. The TPPA could render New Zealand government decisions subject to rulings by international tribunals, in the defence of investors from the negotiating countries of Singapore, Chile, Brunei, Australia, Peru, Vietnam and the United States. This is how “free trade” agreements pave the way for the extraction of wealth ? by the erosion of economic sovereignty.
The Key government’s privatisation agenda is well advanced, with various private public partnerships (PPPs) already being developed. This neoliberal doctrine includes the privatization of prisons, schools, water resources, and all infrastructure.
Ultimately on offer is $5-20 trillion[14] in Crown mineral wealth, including gold, coal, lignite, phosphate, iron sand, oil, natural gas, and more, all under the fourth lowest royalty and taxation regime in the world[15] – a paltry 1% of the production value.[16]
“Mixed ownership model” is destined to fail
The Key government plans to sell 49% of four state owned energy companies – Mighty River Power, Meridian, Genesis, and Solid Energy, and a further 23% of Air New Zealand. It is claimed that $5–7 billion can be “freed up” to reduce debt.[17]
What really betrays these asset sales as an ideologically-based policy is the maths. Financial analyst Brent Sheather has calculated that the assets are earning a higher income than the cost of borrowing.
Currently, the cost of borrowing is 4% for ten years, so the cost of $6 billion would be $240 million. The forecast dividends of the four SOE energy companies average $449 million over the next five years, 49% of which is $220 million. Add $20 million for selling 23% of Air New Zealand and the lost dividends average $240 million a year.[18]
Now, add the sales related costs estimated at 3% or $180 million, plus the expected improved performance from substantial recent capital investment, and there is no way for New Zealand taxpayers to come out ahead.
As the Green’s co-leader Russel Norman has said:
“We have seen this before. Like our energy SOEs, Telecom had invested significant amounts of capital in building a modern telecommunications network in the years before privatisation. In the years following Telecom’s privatisation, dividend streams for its new private owners doubled, then tripled within six years. History now seems to be repeating itself with our energy SOEs. National has allowed the taxpayer to build up the asset, only to then on-sell it to the benefit of others.” [19]
The initial public offerings (IPOs) will be snapped up and passed on to larger offshore players, who with only a combined holding of 25% will enjoy foreign-owned status under the Overseas Investment Act (2005),[20] with ample influence at 49% to sway policy. So expect higher power prices.
Over the longer term, asset inflation will provide a mega windfall for shareholders.
In 1999, the NZ Herald reported that: ‘Over the past 12 years 40 state-owned commercial assets have been sold, realising $19.1 billion. As at August 31, 1999 these assets had an estimated value of $35.7 billion, $16.6 billion above their original sale price. … The privatisation programme has been a huge windfall for overseas investors. Just over 79 per cent, or $13.1 billion, of the increase in value has gone to offshore interests.’ [21] [22]
No political party can beat debt under our monetary system
New Zealand’s government debt is presently modest compared to private debt. In the short-term, tax reforms that enable a fairer redistribution of income would slow the deepening tide of all New Zealand debt ? if only the Key government would allow this.
But in our post-peak oil world, without cheap oil to fuel high productivity, sovereign debt in New Zealand ? as elsewhere, will inevitably force austerity measures consistent with the Washington Consensus. The past failure of these policies will be ignored, because ultimately there is simply no other option under the debt-based system.
Under fractional reserve banking the rate of growth of debt must be higher than the rate of growth of income to avoid collapse. In aggregate, debt grows exponentially until it cannot be repaid. [23] [24]The world is literally attempting to engage productive overdrive in a hopeless struggle to satisfy unproductive debt servicing.
Almost half of the average earned income is already siphoned off via direct or indirect hidden interest, and in government debt taxes.[25] In sum, almost half of humanity’s productive effort is to serve useless debt, instead of solve the world’s problems.
The pressure to leverage fiscal advantage from assets, of all kinds, comes directly from the ruling power – the international banking elite. No political party can entirely avoid asset extraction under the fractional reserve system. Governments can adjust the debt hand-brake, but the foreign bankers are in the driving seat.
The world is sliding toward zero and eventually negative growth. Sovereign debt can only speed up. New Zealand will join the economic train-wreck down the track.
The only escape route is a public medium of exchange that is debt-free.[26] Every sovereign nation can issue its own currency without debt or interest, but nearly all governments align with the international bankers to extort the “common wealth.”
The Reserve Bank of New Zealand issues less than 2% of the nation’s money debt-free,[27] serving the global central banking cartel, not ordinary Kiwis.
Selling public assets amounts to economic suicide
The European Central Bank (ECB) is clearly demonstrating how economic sovereignty can be wrested from countries through debt peonage.
The world on its present course cannot avoid fuel shortages, debt-deflation, fiscal austerity, increasing poverty, political and environmental conflicts over energy and essential commodities, unprecedented global protests against Wall Street financial injustice, political and legal challenges for full reserve monetary reform, climate and humanitarian disasters, further revolution and war.
We are facing the perfect economic storm, in which sacrificing long-term high performing income would guarantee poverty for the majority. Selling public assets amounts to economic suicide.
Most New Zealanders don’t realize that their country, and their future, is being sold.
________________________________________
[1] Anthony Painter. (2009, April 10). The Washington Consensus Is Dead. The Guardian., Kings Place, 90 York Way, London N1 9GU, UK.
http://www.guardian.co.uk/commentisfree/cifamerica/2009/apr/09/obama-g20-nato-foreign-policy
[2] Mixed Ownership Monitoring Unit. (2011, December 15). Mixed Owner Model For Crown Companies. Crown Ownership Monitoring Unit , 1 The Terrace, Wellington 6011, New Zealand.
http://www.comu.govt.nz/publications/information-releases/mixed-ownership-model/
[3] John Williamson. (2004, September 24-25). A Short History of the Washington Consensus.
http://www.iie.com/publications/papers/williamson0904-2.pdf
[4] Neoliberalism. Wikipedia.
http://en.wikipedia.org/wiki/Neoliberalism
[5] Steve Keen. (2011, December 3). We’re Already In The Second Great Depression, We Just Don’t Realize It Yet.
http://articles.businessinsider.com/2011-12-03/markets/30471134_1_second-great-depression-hope-new-jobs
[6] OCED. (2011, December 5). Governments must tackle record gap between rich and poor, says OECD.
http://www.oecd.org/document/40/0,3746,en_21571361_44315115_49166760_1_1_1_1,00.html
‘The gap between rich and poor in OECD countries has reached its highest level for over 30 years, and governments must act quickly to tackle inequality, according to a new OECD report. “Divided We Stand: Why Inequality Keeps Rising” finds that the average income of the richest 10% is now about nine times that of the poorest 10 % across the OECD.’
[7] Jan A. Kregal. (2003, April). The Perils of Globalization: Structural, Cyclical and Systemic Causes of Unemployment
http://www.cfeps.org/pubs/sp-pdf/SP13-Jan.pdf
‘In the view of US Secretary of the Treasury Morganthau the creation of the Bretton Woods institutions was to keep the control of the international financial system out of the hands of international financiers who were considered to have caused the Great Depression. Keynes agreed that free private international capital flows were incompatible with a stable international financial system and this similarity of views produced a post-war system in which it was presumed that there would be virtually no private international capital flows.’
[8] Embedded Liberalism. The Glorious Thirty years. Wikipedia.
http://en.wikipedia.org/wiki/Neoliberalism
‘The period of government interventionism in the 1950s and 1960s was characterized by exceptional economic prosperity, as economic growth was generally high, was contained, and economic distribution was comparatively equalized. This era is known as les Trente Glorieuses (“The Glorious Thirty [years]”) or “Golden Age”, a reference to many countries having experienced particularly high levels of prosperity between (roughly) World War II and 1973.’
[9] Ian Fletcher. (2011). Free Trade Doesn’t Work, Why the Theory of Comparative Advantage is Wrong.
http://www.worldfinancialreview.com/?p=866
‘As a result, people who draw most of their income from returns on capital (the rich) gain, while people who get most of their income from labor (the rest) lose.’
[10] Richard C. Cook. (2007, June 2). Monetary Causes of the Immigration Crisis. The “Washington Consensus” has wrecked their economies. Global Research.
http://www.globalresearch.ca/PrintArticle.php?articleId=5862
‘The conditions also include a shift of indigenous economies to the production of export commodities, away from local self-sustaining agriculture and small business. This typically results in a mass exodus from rural areas to urban slums and causes poverty, unemployment, and crime. These financial programs benefit the local educated elite who work with the Western agencies and global corporations but cause a deep and permanent stratification among social classes.’
[11] OCED. (2011, December 5). Governments must tackle record gap between rich and poor, says OECD.
http://www.oecd.org/document/40/0,3746,en_21571361_44315115_49166760_1_1_1_1,00.html
[12] ILO. (2011). Global Employment Trends 2011. International Labour Office, CH-1211 Geneva 22, Switzerland.
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_150440.pdf
[13] Robert E. Scott. (2011, May 3). Heading South: US-Mexico Trade And Job Displacement After NAFTA. Economic Policy Institute, 1333 H Street NW, Suite 300 East Tower, Washington DC 20005, USA, www epi.org.
http://www.epi.org/page/-/BriefingPaper308.pdf
[14] Dr. Don Elder. (2010, September 21). CEO, Solid Energy. Day 2 presentation at the 2010 New Zealand Petroleum Conference, Skycity Convention Centre, Auckland, during which Dr Elder has been quoted as stating that New Zealand has NZ$ 5-20 trillion in Crown minerals.
http://www.nzpam.govt.nz/cms/pdf-library/petroleum-conferences-1/2010-nzpc-speaker-presentations/Don%20Elder.pdf
[15] IPENZ, authorship withheld. (2011, December). Realizing Our Hidden Treasure: Responsible Mineral and Petroleum Extraction. The Institution of Professional Engineers New Zealand Inc., PO Box 12 241, Wellington 6144, New Zealand.
http://www.ipenz.org.nz/ipenz/media_comm/documents/IPENZMineralsandPetroleumFinalDec2011.pdf
[16] Taxation & Royalties for Mining Companies. New Zealand Mineral Industry Association. PO Box 24315, Wellington 6142, New Zealand.
http://www.minerals.co.nz/html/main_topics/overview/taxation_royalties.html
‘The Ministry of Commerce has recently imposed a royalty on minerals owned by the Crown. The royalty is the greater of 1% ad valorem (value of production) or 5% of accounting profits.’
[17] Mixed Ownership Monitoring Unit. (2011, December 15). Mixed Owner Model For Crown Companies. Crown Ownership Monitoring Unit,1 The Terrace, Wellington 6011, New Zealand.
http://www.comu.govt.nz/publications/information-releases/mixed-ownership-model/
[18] Gordon Campbell. (2011, November 24). Gordon Campbell: financial analysts jump ship on asset sales.
http://www.scoop.co.nz/stories/HL1111/S00215/gordon-campbell-financial-analysts-jump-ship-on-asset-sales.htm
[19] Dr Russel Norman. (2011, November 23). National Set To Repeat Telecom Privatisation Mistake.
http://www.voxy.co.nz/politics/national-set-repeat-telecom-privatisation-mistake/5/108571
[20] Overseas Investment Act (2005). Section 7 (1). ‘…or they are 25% (or more) owned or controlled by an overseas person or persons.’ Parliamentary Counsel Office., PO Box 18070, Wellington 6160, New Zealand.
http://www.legislation.govt.nz/act/public/2005/0082/latest/DLM356881.html
[21] Bryan Gaynor, NZ Herald. (1999, October 2). Analysis: Filling Foreigner’s Pockets. The New Zealand Herald, PO Box 32, Auckland, New Zealand.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=15142
[22] The Treasury. (1999, September 30). Income from State Asset Sales. Historical information on the sale price and background to New Zealand Government asset sales as at 30 September 1999. The Treasury, Level 5 (Reception), 1 The Terrace, Wellington 6011, NEW ZEALAND.
http://www.treasury.govt.nz/government/assets/saleshistory
[23] Michael Hudson. (2004, January 24). The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part I.
http://michael-hudson.com/2004/01/the-mathematical-economics-of-compound-rates-of-interest-a-four-thousand-year-overview-part-i/
‘Orthodox academic models rarely acknowledge the problems posed by the exponential growth of debt overhead. Such models typically make government policies appear unnecessary to cope with this problem, by focusing on the kind of world that might exist if the financial overgrowth of savings and debts did not double every decade or so, having multiplied again and again over the past century. It thus has been left mainly to non-mainstream writers to address the structural problems created by an accumulation of interest-bearing debt.’
[24] Debt Grows Exponentially. (2010, October 30). The Elephant In The Room: Debt Grows Exponentially, While Economies Only Grow In An S-Curve. Washington’s Blog.
The Elephant In The Room: Debt Grows Exponentially, While Economies Only Grow In An S-Curve
‘Hudson says that – in every country and throughout history – debt always grows exponentially, while the economy always grows as an S-curve. Moreover, Hudson says that the ancient Sumerians and Babylonians knew that debts had to be periodically forgiven, because the amount of debts will always surpass the size of the real economy. … One thing is for sure. The exponential growth of debt is a structural problem which – unless directly addressed – will swallow all economies which try to ignore it.’
[25] Margrit Kennedy. (1995). Interest and Inflation Free Money. Creating an exchange medium that works for everybody and protects the earth. Published by Seva International, ISBN 0-9643025-0-0.
http://kennedy-bibliothek.info/data/bibo/media/GeldbuchEnglisch.pdf
‘On an average we pay about 50% capital costs in the prices of our goods and services. Therefore, if we could abolish interest and replace it with another mechanism to keep money in circulation, most of us could either be twice as rich or work half of the time to keep the same standard of living we have now.’ (Other estimates are 40-45%.)
[26] Positive Money NZ. A campaign for Full Reserve Banking, based on similar campaigns in the UK and USA.
http://www.positivemoney.org.nz/
[27] Deirdre Kent. (2011, November). Money For Nothing. New Zealand Investor.
http://most0010122.e-xpert.co.nz/includes/download.aspx?ID=118572
– To the original article… ➡
– Research thanks to Kierin M.
Localized ecological systems are known to shift abruptly and irreversibly from one state to another when they are forced across critical thresholds. Here we review evidence that the global ecosystem as a whole can react in the same way and is approaching a planetary-scale critical transition as a result of human influence. The plausibility of a planetary-scale ‘tipping point’ highlights the need to improve biological forecasting by detecting early warning signs of critical transitions on global as well as local scales, and by detecting feedbacks that promote such transitions. It is also necessary to address root causes of how humans are forcing biological changes.
– To the actual article… ➡
– Warning, Science magazine wants you to pay to read the full article. I think that’s a crock of shit, myself. But then, hey, the entire world, including stories of its demise, are a for-profit enterprise, right? Yeah, right.
– Research thanks to Piers L.
– Racism has no place … anywhere. But surely, it has no place in medical academia.
– But, apparently, it is alive and well at one of America’s foremost Medical Campuses; UCLA.
– Watch this video to see what’s going on and sign the petition.
– AND pass this on and do your part to say ‘no‘ to this sort of crap.
– Dennis
= = = = = = = = = = = = = = = =
– To the Video… ➡
– To the Petition… ➡
= = = = = = = = = = = = = = = =
– Research thanks to John P.
– It’s not a good idea. Data from the U.S., which has been doing this for some time, is bad. The article, below, is an example of what is happening there.
– Dennis
– To the article… ➡
WASHINGTON — David Simon of Simon Property received a pay package worth more than $137 million for last year, and the typical CEO took home $9.6 million, according to an analysis by The Associated Press.
Here are some ways to think about just how much money those salaries represent.
Simon’s $137 million is almost entirely in stock awards that could eventually be worth $132 million. The company said it wanted to make sure Simon wasn’t lured to another company.
HOW LONG IT TAKES OTHERS TO MAKE THAT MUCH: A minimum wage worker — paid $7.25 per hour, as some workers at Simon malls are — would have to work one month shy of 9,096 years to make what Simon made last year. A person making the national median salary, $39,312 by AP calculations, would have to work 3,489 years.
BY THE HOUR: Assuming Simon worked a 60-hour week, his pay was $43,963.64 per hour, or $732.73 per minute. To put that in perspective, the minimum-wage worker would have to labor for nearly three years to make what Simon earns in an hour. The average U.S. worker makes slightly less in one year than Simon makes in an hour.
COMPARED WITH AMERICA’S CEO: Simon makes about 342 times the $400,000 annual salary of President Barack Obama. In fact, if you add the salaries of Obama, Vice President Joe Biden, the Cabinet, the Supreme Court justices, all the members of the Senate and House of Representatives and all 50 governors, it is less than $110 million, so Simon makes well more than government’s top 600 leaders. In the past 100 years, U.S. taxpayers have paid a total of $80.6 million, adjusted for inflation, to presidents from Woodrow Wilson to Obama.
The median CEO salary of $9.587 million:
HOW LONG IT TAKES OTHERS TO MAKE THAT MUCH: A minimum wage worker would have to work 636 years to make that much. A person making the national average salary would have to work 244 years to make the median CEO salary.
BY THE HOUR: If you assume the CEO works a 60-hour week, the pay comes to $3,072.84 per hour, or $51.21 per minute. To put that in perspective, the minimum wage worker would have to labor more than 10 weeks to make what the median CEO earns in an hour. It would take the average U.S. worker nearly a month to make what the average CEO makes in an hour.
COMPARED WITH AMERICA’S CEO: The CEO who made the median salary took in 12 times the total $789,674 in gross income that President Obama reported last year. But it is less than half the $20.9 million in income that presumptive Republican nominee Mitt Romney reported in his tax filing.
– To the original article… ➡
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