The Green party is soliciting funds for its election campaign with an email that says:
. . . National’s policies of more mining, weakening environmental protections, poor economic management and growing inequality are not the recipe for a fair society and a better future.
In contrast to National, we have the ideas to deliver a richer New Zealand. . .
Green is supposed to be the colour of growth but these Greens are really reds promoting the policies that have failed in the past.
Take their plan to bring down the exchange rate. Prime Minister John Key says currency intervention and printing money won’t work:
. . . “It didn’t work very well for Argentina, or Venezuela or Zimbabwe and it could never be done in New Zealand at the sort of magnitude we’ve seen in the United States,” said Key.
As for the New Zealand dollar versus its United States counterpart, Key used a seesaw analogy.
“It’s a bit like being a seesaw and if I weigh 85 kilos and you weigh 170 kilos, I’m going to go up when you sit on the seesaw and you’re going to go down. And that’s really the situation we’ve got at the moment.”
“We kind of weigh 85 kilos and the United States weights 850 tonnes. Right up to this point it (the US) has been very unwell. It has got everything from aids to bird flu. It has really been pretty unwell so the market’s just massively adjusting what they’re doing.”
When people say the Reserve Bank should be printing money, Key said you wouldn’t do that with base rates – the Official Cash Rate – at 2.5%.
“All you do is cut interest rates for a start off. The second thing was even if you printed money, it’s never going to work. I think they’ve printed US$5.5 trillion in the US. I mean it’s massive. So what would we print? NZ$50 billion or something? It wouldn’t make an iota of difference.”
“So my view would be I know we want to get the exchange rate down and I know it’s hurting a lot of companies. But it’s a cycle you’re going to have to ride through and all the Government can do is control the things that are in our control. So get out there and reform the Resource Management Act, make sure we don’t spend too much money, make sure we keep pressure off interest rates, manage the place well,” Key said. . . .
The reds want to increase the burden of government, their policies will lead to higher interest rates and they haven’t a clue about good economic management.
. . . Furthermore, he said intervention in the currency markets never works.
Here Key cited an example from his previous career at Merrill Lynch, where at one time he was head of global foreign exchange. One of Merrill Lynch’s biggest clients was the Bank of Japan, which used to intervene in the currency markets through Merrill Lynch.
“To tell you how bad it got, one night we were sitting there and the Bank of Japan rang up and the US$-yen was about 90 or something and they didn’t want it to go down lower. And the guy said to me ‘I want you to start buying dollars at 90’. And I said ‘how many do you want me to buy’, and he said ‘well, I’m going out for three hours so I’ll give you a yell when I get home.’ And I said ‘yeah, but how many do you want me to buy?’ And he said ‘I’m going out for three hours, don’t you understand the conversation?’
“I bought US$4.5 billion in three hours. He said ‘where is it (the US dollar-yen exchange rate)’ and I said ‘it’s 90, you bought US$4.5 billion. And he said ‘ah, well I’m off to bed now give me a ring in the morning’,” said Key.
“It never worked, it just never worked. I don’t know how much money they lost on intervention but it was massive.” . . .
Who do you believe – someone who has worked in international finance and has managed the country through the global financial crisis or people who want to print money and whose power policy would have a chilling effect on on private investment? Rob Hosking writes:
. . . There is something essentially frivolous about anyone who would cheerfully rip up the value of some of the country’s largest firms, and the value of the investment in those firms, simply for a political positioning exercise.
This is why the exchange caught by TV3 between Green energy spokesman Gareth Hughes and party spin zambuck Clint Smith was so telling.
For those who missed it, Mr Hughes was asked if the party was pleased at the reaction: Mr Hughes paused, turned to Mr Smith and asked “Hey, Clint – are we pleased?”
It was telling that he even had to ask.
But the almost palpable glee coming out of the Green and Labour camps at the destructive impact of their policy is highly revealing.
It underlines – not for the first time – the problem with the makeup of both parties. They are dominated at the MP and the staff level by the sub-genus homo politicus.
That is, they are full of people who have done nothing in their lives apart from politics. All parties have a complement of this group, but with Labour and the Greens the group has reached critical mass.
This group has been involved in politics at university, moved from there to various political/union offices and then into parliament.
There is little real world experience and everything is viewed through a very narrow prism of political advantage.
It’s the sort of attitude which means the value destruction seen this week can be just laughed off.
There will, unless we are careful, be more such frivolous policies to come.
I would use a far stronger word than frivolous and the business community certainly isn’t taking it lightly.
In an open letter to LabourGreen they say the policy would harm jobs, growth and investment, causing interest rates to rise, reducing KiwiSaver retirement savings and making people less well off.
. . .Business shares your concerns about constantly rising power prices and their impact on our global competitiveness. Businesses and consumers work hard every day to minimise their spending on electricity in order to stay in business and
John Scandrett Chief Executive Officer Otago Southland Employers’ Association
Raewyn Bleakley Chief Executive Business Central–Wellington
Kim Campbell Chief Executive EMA
Peter Townsend Chief Executive CECC
Michael Barnett Director New Zealand Chambers of Commerce
These people represent people who employ people, the ones who need certainty and confidence to make investment that creates jobs, earn export income and pay taxes.
These are people who work in the real world.
They know there’s nothing funny about bad policy that would take the country backwards, cost jobs and make us all poorer.
They know that Green isn’t for growth and it doesn’t mean go.
Green economic policy is bright red and it will mean stop to economic growth and job creation.