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Posts Tagged ‘BNZ chief economist’

History Lesson – Toru – Jobs

20 March 2012 4 comments

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Another look back into our recent history. Just to remind ourselves, that what is past, is prologue…

Firstly, too many of our simple-minded fellow New Zealanders still cling to the bigotted fantasy that those on welfare benefits are there “by choice”.  Currently, our unemployment stands at 150,000 – or 6.3% of the workforce.

But was it always so…?

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6 June 2002

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14 September 2002

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New Zealand’s growth rate in the early to mid 2000s was between 4% and 6%, and the skilled labour shortage reflected an economy that was doing well,

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Tony Alexander, the BNZ’s chief economist, was reported to have said that “businesses are also going to have to consider helping with basic education. They are going to have to take on less  skilled people and train them up in reading, writing, and arithmetic“,

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24 October 2002

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Unemployment dropped to a record low of  3.8%  by December 2007. Interestingly, as the recession impacted on our economy, unemployment soared. It is no secret that unemployment and recessionary periods are closely intertwined,

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28 October 2002

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Our GDP (per capita, adjusted by purchasing power parity) rose steadily in the 2000s, levelling of post-2008,  as the global banking crisis hit New Zealand, creating into a full-blown recession,

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The result of leaving everything up to the free market – a skills shortage. It became readily apparent that businesses demanded well-educated, trained, experienced workers – but were not prepared to pay for that upskilling. That was the role of the State. So much for the State staying out of  the Market – when the Market could not/would not, invest in skills training as required,

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20 November 2002

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As the economy boomed, the government post surplus after surplus. (So much for the mischief-making  from certain National/ACT agitprops who scurrilously spread the lie that the previous Labour Government mis-managed the economy.) The actual data is  on record for all to see,

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Which, in turn, allowed Labour’s finance minister, Michael Cullen to pay down our sovereign debt,

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As always, the building industry was affected. Which is in marked contrast to builders who, in the last couple of years were finding work hard to come by. But in 2002, it was a completely different world,

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25 November 2002

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Even though the economy was growing and unemployment was dropping, it was evident that people’s skills (or lack of) did not match the demands of employers for their businesses. This failure of the Market to upskill workers, to meet the needs of business, is  yet more clear evidence that without State assistance and intervention, economic growth is stifled.

If the self-regulating “Invisible Hand” of the Marketplace acted as per theory, then unskilled unemployed should be upskilled by businesses as required.  This did not happen,

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2 December 2002

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The point of this history lesson is that a poorly performing economy will not maximise the use of available human labour. Or to put it more plainly, if the economy is in recession – expect high unemployment.

That is fairly simple to understand.

Those politicians, and their groupies, who talk about a “welfare lifestyle” or “welfare dependancy” are being deliberately disingenuous. These  politicians are well-educated, sophisticated men and women who have a clear understanding of economic forces and their consequences.

Politicians understand that very few people are on welfare as a “lifestyle”. And “dependancy” should actually mean being dependant on state assistance – or the alternative being to starve. Those who are unemployed are as “welfare dependent” as an astronaut in space is “spacesuit dependent”.

In truth, when the likes of John Key, Paula Bennett, et al, talk of  “welfare lifestyle” and/or “welfare dependancy” – they are using ‘code’ to paint welfare recipients as being the architects of their misfortune.

Because, dear fellow New Zealanders, as we all know, the unemployed here in New Zealand were sitting in the Boardrooms of  Goldman Sachs, AIG, Bank of Scotland, General Motors, Lehmann Bros, etc, etc, etc, and were responsible for the chaos and misery of the 2008 Recession.

When a politician attempts to paint a welfare beneficiary as “welfare lifestyle” and/or  “welfare dependancy” – they are shifting responsibility from themselves – the people with power – onto welfare reciepients – the most powerless in society- for the pitiful state of the economy here in New Zealand, and  throughout the world.

I wonder if welfare beneficiaries know that they crippled the revered demi-god of Western Capitalism, and brought Wall St and City of London, to it’s knees?

Damn crafty, these benes, eh?

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= fs =

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