The Editor, Scoop

Dear Sir/Madam

“The crash of 2008 continues to reverberate loudly nationwide—destroying jobs, bankrupting businesses, and displacing homeowners…” “The Atlantic Magazine,” 03/09 Richard Florida

Meanwhile, in New Zealand, the ‘21 points of action’ from the recent Jobs Summit (27 February) filled me with a sense of foreboding, as I watched the delegates from the elites of NZ society eat their pre-prepared lunches on the tax payer.

I just can not but help feel we are drifting into a storm without the appropriate settings and life jackets.

Also framed around the beginning and end of the conference, was the news of the NZ Government outsourcing to China: clothes for our armed services, and locomotives. Apparently the 21 point response, as part of a typical bureaucratic culture - according to Key - will be overseen by one person to a maximum of two from each relevant sectional group, charged with implementation. Where is the vision?

As without vision we shall perish (Proverbs 29:18).

It is not a response to the real causes of the downturn which respected Harvard economist, Niall Ferguson, expects to last four years. World trade is collapsing along with the GDP of the USA which dropped over 6.2% in the last quarter of 2008.

East European countries are on the brink of total financial collapse. Dubai is in a serious recession. Iceland lauded only six months ago as an example of a “transformed” smart economy is bankrupt. Ukraine held up as an example of a former Soviet republic integrating with the West is suffering bank failures and large scale loss of jobs.

Prince Walid of Saudi Arabia and several other investors from the Middle East and Asia, including the Abu Dhabi investment fund, are now suffering the public embarrassment of seeing their investments in Citigroup evaporate.

One particular statistic of concern is the large amounts of external debt certain countries are currently carrying relative to the size of their economy (GDP) and will continue to build as they battle the economic slowdown.

Brian Gaynor, who seems to be routinely ignored by Governments of both persuasions, says New Zealand's current account deficit is the fifth-worst of the 30 OECD countries, after Iceland at 8% of GDP; and total net debt 125% of GDP.

The mounting debt of the US, due to recently implemented bailout programs and stimulus packages, appears relatively stable in comparison. Currently, the US debt to GDP ratio is approximately 100 % with the bulk of its external debt mostly in dollars.

Netherlands currently has a ratio of approximately 328 %, while Ireland has built a debt to GDP ratio of 900 %. Unexpectedly, the two countries that appear most susceptible to economic collapse are the UK and Switzerland. The UK's debt to GDP ratio is currently 456 % while Switzerland's is 433%. The reason being that both these countries are connected to international financial centers, and their economies, like Iceland’s, are dominated by financial transactions.

God tells us that “every way of a man is right in his own eyes” (Proverbs 21:2).

We are not being told the truth by our leaders.

“The world’s 40 largest mega-regions, which are home to some 18 percent of the world’s population, produce two-thirds of global economic output and nearly 9 in 10 new patented innovations.” Richard Florida

But the way out for NZ is not to export more, or become more efficient or reduce the entitlements of workers (whilst at the same time paying the executives more). These are worthy, but repeat the old clichés. The opportunity exists to transform NZ by better use of its creativity. Creativity is the magnet for most people when they migrate offshore for a more stimulating work environment. Those companies that have not borrowed heavily and value their workers will do well. Auckland needs to be further developed so that clusters of creativity may be nourished by good public transport. It is the mega region of NZ.

Unfortunately, places like Waitakere that have borrowed heavily to finance subdivisions and real-estate boom, will suffer due to collapse of property prices, and foreclosures. A few movie town activities such as Shortland St is not going to save Waitakere but this definably is the direction we need to go. Tourism of the Waitakere Ranges, through NZ Government support of a National Park, would buttress any down turn.

Within NZ, like the USA, there will be (and are) stories of people and businesses defying the down turn.

Some country towns may die, some industries will die. But places like Auckland and parts of Wellington and its hinterland will do well, as the West Coast of the South Island and Invercargill which built a creative aspect that people want to be around.

Our leaders have shown little sign of grasping the enormity of what is happening in the World, and the opportunity within to change the culture in NZ which has seen the best and brightest leave.

Some specific economic points that may assist:

* The Government could buy foreclosed houses and rent them to the unfortunate previous owners with a option to buy

* Develop micro finance for small business

* Encourage community living concepts that minimize the need for separate utilities

* Government sponsorship of community gardens through work for the dole with needy families receiving free produce

* Repatriation of what’s left of the Cullen fund before it totally disappears

* Suspend our so called free trade agreements in cases which sideline local enterprise

* Tax free first three years for new medium to small enterprises

* Remove GST on rates and educational costs and fees, and books

* Help charities such as the Salvation Army and others deal with the down turn and associated social problems—the NZ Council of Christian Social Services held a conference the same day (27 th) and was largely ignored by the media.

http://www.kiddlegal.com/index_files/page0001.htm
Dr Michael Kidd was the Waitakere candidate for the Family Party in ‘08 election

ENDS

© Scoop Media