United States Federal Reserve chairman, Alan Greenspan, defended globalistion on Friday but warned that latent forces of
protectionism and state intervention may reassert themselves. Meanwhile here in NZ there are also communication
problems. John Howard writes.
"Since the fall of the Berlin Wall and the collapse of the Soviet Union a growing number of countries have turned to
free-market policies, rejecting government-controlled systems like those of communist countries," Greenspan told
colleagues of the central bank at its annual conference in Wyoming on Friday.
But he warned an economic downturn could reverse the trend.
"Any notable shortfall in economic performance runs the risk of reviving sentiment against market-oriented systems,"
Greenspan said. Although he was quick to point out that such a shortfall is not anticipated.
Greenspan also bolstered the view of many leading economists that the sizeable pickup in productivity growth over the
last several years represents a lasting structural change in the economy.
"It is still difficult to find credible evidence in the United States that the rate of structural productivity growth
has stopped increasing. Still, a tapering off in productivity accelerations is inevitable at some point in the future,"
"Those of us who support continued endeavours to extend market-driven globalisation need to understand and, if possible,
address the concerns that give rise to the desire to roll-back globalisation," Greenspan added.
He was referring to recent protests against the WTO, the IMF and the World Bank where various groups protested against
what they see as serious flaws in global capitalism.
New Zealand, and the world, has been subjected to free-market theories for more than 15 years.
This has instilled in the minds of some governments, politicians, leading business leaders and economists an ideology
that "there is no alternative" - the TINA principle.
But there is, and always has been, an alternative. The new Labour/Alliance government seems to want that alternative for
What went so wrong last week that international investors flew from the New Zealand dollar and government securities?
In my view, nothing more than lack of simple communication between people.
If you were an investor seeking stability and return and suddenly your 15-year-old thinking was being overturned by a
government which had not explained its plans and concerns fully and properly to you, what would you do?
Sure the government announced its policies in broad terms prior to the election, but, according to the business
community, the devil was in the detail over which they say they were never consulted properly.
Is communication, leadership, and taking people along with your ideas important? You bet it is!
For example, I am not a member of any union but I was astounded recently to read in the Engineers, Printing and
Manufacturing Union newsletter that the Labour Department was investigating 61 cases of alleged sweatshops in New
Zealand which involved 250 workers.
There is even one case where four workers lived and worked in an unheated garage, sleeping two to a bed and working up
to 18 hours a day for a pittance.
How is it possible that workers in New Zealand can be employed in such a way that the police consider laying charges of
I e-mailed a few friends in the business community who had been vociferous opponents of the government with this
information. They, too, were astounded that this was happening in Godzone.
That's it then - knowledge is power and ignorance punishes. I've always found that most people act reasonably when they
are aware of the facts.
So, it's time to start re-building the lost confidence in this country and it's way past time for the government to
start communicating properly.
Like Tony Blair's British government some of our politicians are now being accused as being nothing more than spin and
control merchants - let's hope they don't spin out of control.