Monthly Archives: November, 2008

What’s Happened!??!

Can anybody tell me what the hell has happened to capitalism?

Over the course of the 20th century, our market-led capitalist leaders made billions, trillions and maybe even gazillions, selling stuff to we, the consumer, without a second thought from either party. They supplied a good/service, we paid for said good/service. Money changed hands, profits were made, dividends were returned to shareholders every quarter. It was a simple formula. The consumer demanded things, and the suppliers supplied. The model was tinkered with from time to time (For example, if the quarterly dividend started to fall, then corporate leaders would out-source particular parts of their workings, such as call centres, customer service, manufacturing, design and development, cleaning, maintenance, and so on, to third world labour factories run and manned (or kidded?) by children, and, as a result of their excellent decision making, leaders would receive bonuses rivalled only by the cost of purchasing several new Airbus A380s, even if their decisions ended up losing companies millions, billions or even gazillions) but ultimately the capitalist model held firm.

The model held firm because it was a good model. Capitalism central, or the United States of America (corporate, not regular types like Joe the Plumber), led the charge. What corporate America said went for the rest of the world. When they demanded low, low, low taxes at bargain basement prices, the rest of the world followed. Why pay tax, they said. Tax is for people who use government services such as health-care, education and social welfare. We don’t use those things, they said. We shouldn’t pay for them. And how right they were. Never in my time as a teacher have I seen a corporate leader enter a school, hospital or food-bank, or indeed express any views about any of those things, or the people involved. If they are not going to use the service, why should they pay?? That is an absolutely fair question, that needs to be answered with a ‘no they shouldn’t’. And so they didn’t. People didn’t expect corporations to pay tax, because they didn’t use services. Individuals paid the tax instead. We are the ones who get sick, or start off stupid, or lose our jobs to when corporates outsource to our subcontinental friends. We should be the ones to pay.

Then in the 80s, our brilliant market leaders began the utterance that would define them as pure capitalists. “Let the market provide!” Oh yes. The collective monetary climax of a million Thatcherites rings as true today as it did back in ’81. Their argument, quite rightly too, was if the market would provide in all areas of our lives. It’s simple idea talked about as far back as the 18th century by the likes of Adam Smith. If there is a demand for something, the market will make it to on-sell to the consumer. Political leaders adopted this idiology quicker than a fat guy making his way to a pie eating competition. Before we knew it, all government systems – health, education, social welfare, utilities – were being run under this commercial model. How absolutely brilliant! Of course the market will provide! Why wouldn’t it? It knows everything about education. If a school is no good there will be no demand for its services, and people will take the very easy option of selling their house in that school zone and moving their entire family to an area where there is a school offering top quality educational solutions for the up and coming young capitalist.

Privatise everything. Pure capitalism. If there is no demand, why should the government provide. Why should they indeed!!???! Actually, it’s not quite “no demand” is it? We should say, “little or no demand”, because, let’s face it, we’re talking about profit here. If there is no profit to be made, there is no point in the market providing. And if the market, and in this case, the market includes the government, doesn’t need to provide a service because there is no (sorry, little or no) demand, then why should they? If the government don’t need to provide, then the demand on the taxpayer falls and we all win by paying lower levels of income tax. The only people that might lose out of this might be the very occasional poor person, who may have been demanding this service, but not enough to contribute payment of any kind. How can you make a profit if someone isn’t willing to pay! And any capitalist will tell you, low taxes mean that people will spend their money in shops, or online on all those goods/services we talked about earlier.

Oh, but hang on… I saw on the news last month that some of the bankings giants in the US were asking for a bit of government help… Oh God, no!! Because the banks have no money, they can’t swing any our way. By ‘our way’ I mean consumers and companies wanting to work the market. What’s more, some of the banks stopped working and went bankrupt. Shite! What’s happening? I still need banking services. I get paid every fortnight. My money needs to go somewhere. A bank is the obvious choice. Banks – I demand your service, therefore you must provide. After reading a bit about the problems, it seems that maybe there may have been a false market… What’s a false market? Well, sometimes in capitalism (and when I say sometimes, I mean only very occasionally, like, maybe, once or twice a month, perhaps), if companies make lots of profit on something, they want to keep making the profit, so they create conditions that will keep a declining market going. In the US, banks wanted to keep lending to people because mortgages & debt make a lot of money for them. Over the course of a 30 year mortgage, banks can make a very tidy profit on a household mortgage. So why not keep this market going??? After all, profits are really important to companies like banks.

Unfortunately, and it wasn’t the bank’s fault – rememember, they only lent the money to the people, it was the people who couldn’t afford to pay the debt. American people who dream of owning their own home in which to raise their children can choose to borrow money at any time, but it’s THEIR choice. They shouldn’t really be borrowing if they can’t afford to pay it back. That’s just silly. Ask any capitalist. Companies NEVER, EVER borrow if they can’t afford to pay it back. Anyway, so many American families could no longer afford to service their mortgages, and the banks started forclosing. As a result, there is now a massive slump in the US real estate market. Currently the banks own a lot of worthless property or family housing that nobody wants to buy. How selfish of the American families for not thinking of the banks before they borrowed their hundreds of thousands of dollars to live the American dream…

The Domino Effect: whereby you hit one domino in a row of dominoes and as it falls it causes all of the other dominoes to fall after it.

As the banks started to run out of money, so did many, many other companis. This month the big three Detroit car companies GM, Ford and Chrysler have run out of money. Having seen the demand for tax-payer funded federal money being met by the US government, a most gracious benefactor in these troubled times, the automobile industry has started asking for extra money. Flying to Washington in their private jets (to, quite sensibly, avoid the stress of domestic air travel one would think), they petitioned Congress for some of the juicy bailout billions. There has been a demand created, therefore the government must supply. It wasn’t the car companies fault that they have been misreading the market for years. How could they possibly be expected to foresee a time when crude oil prices would skyrocket because supplies were running out? How could they possibly be expected to see this. They are in the business of making cars, not, and I repeat, NOT in the business of predicting when the world oil supply may or may not run out. How could the car companies possibly be expected to understand about the international oil market. Their products only run on oil-based fuel. They aren’t made from any products that are refined from crude oil – none at all – except maybe for some of the plasticy bits. Car companies are car companies. They make cars, not oil. How could they possibly be expected to foresee world oil prices rising astronomically. Particularly in these troubled times when the Middle East oil supply is threatened by Al-Qaida and Somali pirates. How could they possibly be expected to foresee the future. They are not soothsayers. They are just car makers. Just car makers.

Sorry for 1500 words of sarcasm, but really, what do they expect? Any system is only as good as the people who run it. Communism is a great idea. Everyone shares everything and everyone contributes to the wellness of society. Sounds pretty sweet to me. But then you get idiots like Stalin and Mao running the show and it turns into opression central. It’s the same with capitalism. The problem with capitalism, with the commercial market model, is the people running it. As long as they focus on maximising profits, they are never, ever, ever, in a million, billion, gazillion years going to adapt to anything that is beyond the next quarter. Profits is profits. Dividends need to be returned to shareholders. That’s all that the corporate world care about. They can’t care about the people who work for them, the customers that buy from them, all of the millions of people around the world who are domiciled to use their goods/services. It is the shareholder that rules.

The greed of shareholders and the greed of the corporate elite will foreever be the downfall of the capitalist market model.

As New Zealand Green Party co-leader Jeanette FitzSimons put it so eloquently after election night a few weeks back…

Will we look back 20 years from now and think, “I’m really glad I voted for tax cuts rather than the future of our children”

Boon x

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New Zealand has Spoken

Last night New Zealand lurched a little to the right. Lurch is probably a bit to strong to describe what actually happened, as we shall see.

As the United States of America rejected the last 8 years of right wing autocracy led by one George W Bush and the Halliburton-Cheney alliance, our little country said yes. We must remember that a lurch to the right in New Zealand is actually more of a 3 centermetre shuffle. As we have seen in the US over the last 8 years, Bush + 911 x youarewithusoragainstus = massive national debt and all manner of extreme views on anything from gun control to abortion to gay lovers entwined in marital harmony…

As an aside – I was watching some coverage of the Republican Party national convention from earlier on this year. Talk about rednecks. The reporter had selected a range of delegates to ask a few questions of; two being their views on abortion and gun control. It never ceases to amaze me how people who routinely espouse the mantra of pro-life can be, often in the same sentence or breath even, ardently pro-death. One of the delegates was even telling the reporter how proud he was of helping to draft or pass something he called “Your Home is Your Castle” legislation. By way of a short explanation, he said your house should be your castle and your castle alone. His new law allowed you to shoot and kill anyone who shouldn’t be in your “castle”. I’m not even going to talk about the death penalty. That’s a whole other blog.

Back to New Zealand. Our new esteemed leader is John Key. He is leader of the current centre-right coalition involving some minor parties who are gingerly dipping their foot into the Republican pool of redneckery. Some of the other parties, like the Maori Party, he is offering the hand of parliamentary friendship to. I don’t believe this current National-led team will do anything major in terms of radical change. Of course, there is the worldwide economic meltdown to contend with (nice first week on the job for you Mr. Key!), but that really only affects money traders, banks, share investors – people who like to gamble with other people’s money. And they don’t say that those people have a compulsive gambling problem, they work in finance. So far in New Zealand, the alleged crisis has not reached the you’s and me’s of this world. Particularly the me’s, because I don’t own a house and have no desire to, so I’m not lumbered with a ridiculously sized overdraft facility that I have to pay back. Not like a student loan… aaaahhh the joys of not having to pay something back if you don’t want to.

John Key was elected on the same mantra as Barack Obama – change, change, change. Are there any real policies behind that? In Barack’s case, it didn’t really matter. His acceptance speech on Wednesday was one of the best I have ever seen. One of the best, shit, it was the best. Despite any lack of substance, what Barack was able to do to win the election was take voters on his ride of hope. If you haven’t seen it yet, click here. It gives me tingles every time. And with hope, comes change. If the US didn’t want change, they would not have voted in a young African-American. They would have voted for McCain, 71 years old.

What sort of change is New Zealand in for? Not much really. Before, during and after John Key’s victory speech last night, he looked like a little boy who had been given a new bike for Christmas, and had found out that the bike was actually a car, and inside the car was a mountain of chocolaty treats, ice-cream and small-bore weaponry. He looked excited enough to lose bladder control at any moment. It was all very cute. Compare this with Obama – cool and calm, like an iceman. Key also talked about change in his speech. New Zealand has voted for change, he announced, and the party faithful cheered. What change!!???!?!?!?!?????? In the last two years National have first rejected, then accepted and finally adopted just about every single major policy that the Labour government brought in. Key talked about moderate and sensible policies. Again I say, what change????!?!?!?!?!!??!!???

NEW ZEALAND IS CHANGING TO THE SAME THING!

Is that even possible? Well, yes. What a stupid rhetorical question. Of course it’s possible, Boon. New Zealand voted for a change to the same thing last night. Idiot! Don’t you watch the news. If you want to see proof of Key’s little boyishness, click here. It’s not a direct link, but it’s a link to a page where you can watch it.

May the wind of change bypass your house, like it will most of New Zealand over the next three years…

Boon x

Vote for ME!

Hello again and welcome to election week. 130 million or more are expected to vote today in the US presidential election. There they have a choice between a cranky old man and a jive brother – I know which one I’d choose. Personally I’d like to see Obama take the pledge next year dressed in a purple pimp suit sporting a particularly enormous afro. Old school.

Back to New Zealand… oh dear. When you compare our elections to those being run in the USofA, what a marked difference! On the one hand you have a young African American with truckloads of charisma, and say what you will about McCain, at least he’s got character. What have we got? A former financial trader with all the personality of a half-dead eel and a woman whose teeth resemble a picket fence that’s had a strong vehicle-based disagreement with a truckular mechanism. 

Both our major parties, National (=UK Tories or Republicans) and Labour (=UK Labour or Democrats), are exactly the same. Neither are offering anything remotely different to each other. Both have aimed for those middle ground voters who are regularly willing to change who they vote for. As our most respected of journalists John Campbell (you can’t hear or read the sarcasm, but it’s there I promise you) pointed out the other night, “Why don’t you two just create a grand coalition?” There was much flustering and pontificating. Ultimately they don’t want to work with each other because they hate each other. 

It’s all about sound-bites this year as well… “this one’s about trust” (Labour), “it’s time for a change” (National). The only problems with this type of polling is the total lack of vision. What are their plans for the future of New Zealand. Nobody knows, yet we go to the polls on Saturday! It’s ok to have a lack of vision. Obama hasn’t really said much other than the mantra NZ National Party stole off him. He has, however, the charisma and charm to back it up. This year, our election seems to be a charm free zone (see previous paragraphs re metaphors about charm/charisma ie fish and picket fence).

Due to the lack of vision and/or charm from our candidates, it seems hard to pick or indeed trust any of them. All they seem to be doing is trying to get everyone’s vote while trying desperately not to offend anyone. What you end up with is nothing – a political ice-cream where the flake of ideas and vision has been replaced by the poo of cynical media manipulation.

Roll on Saturday. 

Boon x