Favourable market conditions for dummies

The problem with being the Economic Illiteracy Support Group is that New Zealand politics is a target-rich environment right now. There are so many stupid comments from so many stupid people that it’s hard to know where to begin.

Thankfully there are other high-quality commentators to do some of the heavy lifting, so we don’t need to intervene everywhere – for instance both No Right Turn and the inimitable Gordon Campbell pilloried the Minister of Dirty Dairying, David Carter, for his announcement of up to $400 million in subsidies for his farmer mates to dump effluent in New Zealand’s rivers. Their posts avoided us having to point out that it was yet another dumb-assed move from a Minister who makes Rob Muldoon look like an economic rationalist.

The other challenge is not turning this site into a continual Bill-and-John show. The dynamic duo in charge of the National Party have the sort of turns of phrase which stand-up comedians can only envy – like this pearler from John Key (thanks, Danyl):

“For the most part we are 100% pure.”

John Key defending New Zealand’s environmental record during a BBC interview.

The big challenge: how can we possibly maintain our hip post-modern ironic stance when the politicians are saying this kind of shit in real life? It’s a problem.

And then there was today’s contribution from the Prime Minister, part of the justification for slashing Kiwsaver:

The Government would borrow $20b this year. That is more than needed, but Key said the Government was taking advantage of favourable market conditions. “On a weekly basis, that averages out to new debt of $380m a week. That … increase in debt is absolutely unaffordable,” he said.

Umm … let’s analyse this one for a moment. The logic – such as it is – seems to go something like this:

1. We’re going to borrow more than we need this year because the market conditions are good.

2. We can’t afford to keep borrowing like this.

Every credit card user in the country can see the obvious error. The bank has lowered the interest rate we pay, so we go out and load up the credit card because the money is a bit cheaper, even though we don’t really have a use for the money, and now we’re moaning and complaining because paying the interest bill costs so much that we can no longer afford to go to the doctor. And the credit card is now full – how on earth did that happen?!

Irony is lost on these clowns. And the results can easily be seen in the government’s books – from surplus to the largest deficit in the country’s history in less than three years. Some commentators are suggesting that National is engaged in some form of class warfare, deliberately looting the country for the benefit of the rich. But that requires a level of intelligence that is nowhere on display with the Bill-and-John show. It could simply be that they are the sort of brainless idiots that borrow money they don’t need, and then bitch about how expensive it will be to pay it back.


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