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The real legacy of the Clark/Cullen years

12/02/2009

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John Armstrong writes in the NZ Herald on the $500 million package announced by John Key yesterday.

It would seem that he and some other commentators now realise that there is little the government can do in the face of the global slump to actually create myriads of jobs. Further, Armstong at least recognises that sooner or later borrowings will have to be paid for.

At least his comments are more relevant than those of some other commentators who keep contrasting National’s package with those in the US and Australia for example. Such comparisons are meaningless  In any event, despite the hundreds of billions thrown at the problem in the US, the news does not appear to be getting better. In fact some of the US money will undoubtedly be wasted as it is political pork and unlikely to provide the stimulus or jobs it is touted as doing.

Here in NZ Phil Goff and David “Boy Wonder’ Cunliffe can carp all they like, but reality is that they would have had little scope to do much different. Though as Armstrong points out:-

But Labour believes English’s defensiveness is evidence National is starting to lose the debate on how best to respond to the internationally generated economic crisis. So Labour is on the attack, saying the public deserved something far bolder than yesterday’s “tinkering”.

Yet he notes that Labour are not yet ready to meet the challenge as to how such largesse will be paid for.

Goff should know better. The policies of the last 9 years did not deliver a robust economy. They delivered a fair weather economy with far too many people benefiting from government benefits than from rising incomes generated by a strong growing economy.Yet Goff and Cunliffe would try and make the populace believe there is some money pit which the government has access to which can solve our problems ‘Just like that’ as Tommy Cooper used to say. Unfortunately the problems we face cannot be solved through a magician’s illusions. Indeed, we have suffered severely from the machinations of the master magician “The Great Culleno” inflicted on us over the past 9 years.

The real Clark/Cullen legacy is now becoming clear. An economy which lacks resilience and with a large percentage of the population dependent on a government handout. The GLNZ  and The Great Culleno can truly be proud of their handiwork.

The lack of ability to do more results directly from the legacy of Clark and Cullen. The wasteful spending of the last 9 years is now coming home to roost. As Bill English noted yesterday far too many people believed Labour had committed funding for initiatives when in fact they had not, but had created a fantasy which cannot be satisfied.

5 Comments
  1. 13/02/2009 16:20

    “Further, Fill In and Boy Wonder seek to insinuate that they could create jobs overnight.”

    They can afford to.. there’s a natural catchment of stupid for them to play..

    There’s some nice graphs out there on all the significant recessions since WW2.. by and large they show such recessions typically lasted 6-18 months.. but from 1982 onwards the 82, 91 and 2001 recessions show progressively longer recovery times for employment. The 01 recession took fully 4 years before employment regained the ground it had lost just before the slide.

    That seems to indicate that the earlier recessions were “real” corrections and the later ones more managed to gentler slopes without the necessary jolt to the system to get rid of the chaff and change direction.
    At the moment we are following the steep slope of the 82 loss of jobs and Govts are trying to shallow the slope with printing money.. seems like this one is determined to achieve a real correction regardless of the money poured in.

    For that reason, I think National is being prudent in not committing to a bottomless pit before it knows quite where the various recessionary slopes are heading.

    JC

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  2. 13/02/2009 13:24

    Fill In or Phil Gaffe is relying on the public to not realise that there is no way in hell that we could afford $50 billion and carefully seeks to build a perception crafted on an untruth that Labour would do more.

    When in fact their policies coupled with the RBNZ brought us into recession a year earlier than everyone else and left us with little ammunition to fight it.

    Further, Fill In and Boy Wonder seek to insinuate that they could create jobs overnight.

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  3. 12/02/2009 21:46

    TV3 reports that Key’s initives including tax cuts amount to 5% of GDP ($9 billion). That’s the same as Oz and just 2% less than the US.

    So Philin is saying thats just a drop in the bucket.. one presumes nothing less than a $50 billion stimulus to Labour’s friends will be good enough.

    Get out the cattle prod, HP.. we’ve got some stimulatin’ to do!

    JC

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  4. adamsmith1922 permalink*
    12/02/2009 17:01

    HP

    You are correct.

    As I noted above Bill English had referred yesterday to their fantasy world in this

    regards

    Adam

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  5. 12/02/2009 16:19

    Not just wasteful spending, but spending announced without being budgeted for. They not only spent the lot, as Cullen crowed after last year’s budget, they overspent it.

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