If large banking institutions like Countrywide, Citibank &
Bank of America are affected by todays sub prime mess why
is the New Zealand Labour Government about to embark on
our own sub prime fallout in the future by lending taxpayer
money to individuals to buy houses who wont be able to pay
back the loans?
"government is not the solution to our problem; government is the problem".
Ronald Reagan, Inaugural Address
West Front of the U.S. Capitol
January 20, 1981.
The fuss made last Tuesday over Helen Clark's "state of the nation" address by politicians on the left and their supporters has left me dazed and confused.
There was much talk of the "problems" that must be solved post a 2008 election and also that the Labour Government had worked hard for the last 8 and a half years to solve many of the problems that faced the nation over that time.
Surely if the hard work had been truly fruitful we really wouldn’t be facing any major problems now?
That’s where I got confused, the dazed part came after Helen Clark’s address but more about that below.
Ronnie was and is right, Governments, of all colours, make problems and then politicise these problems in the media when they offer to “fix” them.
Labour though has been the biggest problem maker in this small countries political history.
The most public example of that lately has been the anti graffiti legislation. Something made worse by Labour’s casual attitude to law enforcement and socialist family centered legislation like family group conferences instead of jail time or appropriate punishment are the problem.
The legislation is actually there already, but it is election year and Labour are merely grandstanding for votes.
You can pick through any of the huge problems that this Motley Crewe have either engineered or been responsible for and it is quite clear that Labour cannot “fix” what it has fucked up.
From the crippled health “service”, crumbling education standards, record high crime figures to record numbers of New Zealanders on welfare.
I would like to dig deeper on a future “fix” that Labour seem stuck on.
In Clark’s verbose and unsustainable “address to the nation”, she mentioned the word “sustainable” more than a dozen times, she made a feature of her governments efforts to fix the “housing unaffordability crisis”, whatever the hell that means.
The fact is, houses have always been “unaffordable” but in this day and age it seems unacceptable to those on the left for people to start at the bottom, earn their own money, save for a house and then buy one themselves. Logical isn’t it but it worked for us in a previous less politically correct life.
"The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help".
Ronald Reagan, 1984
Don't worry citizens, Labour is going to help you buy a house, providing taxpayer funded loans or “shared equity” subsidized hand outs to those on “low wages”, in most cases up to 100% of the value of the house!
To fix the “housing unaffordability crises” Labour also propose to build more cheap taxpayer funded homes in increased densities, you know, like the ones they built in the 1930s onwards, the ones that still breed poverty, crime, dependence and hopelessness. Most sensible individuals call those housing developments slums.
Little boxes made of "ticky tacky" should remain as
part of a song or on the monopoly board, not causing
repeated social decay generation infinitum as State
housing always turns out to be.
They will go further than that though. They will force local government to get involved and local housing commissions set up, ones that in the United Kingdom in the past were filled with corruption and favouritism and led to the current social mess they are having. Tower blocks of hell filled with poor dependant UK nationals and disaffected immigrants, some with Koranic scythes to grind.
It’s a fact that slums don’t and never have worked. Labour propose to follow this well worn path of failure, evidenced here and in every other nation. If they did work we wouldn't still have them decades after they were introduced.
You want to know the really funny thing about Labour’s ultimate “solution” to this thing they call a “home unaffordability crisis”?
They helped cause it!
Record high taxes have burdened lower paid workers with low take home wages, while those same record high taxes have funded a government that have spent the proceeds recklessly on social interference and handouts to those undeserved of taxpayer largesse.
Even a third form economics student at the bottom of a class full of deaf and dumb mutes could tell Michael Cullen that his spending was inflationary.
That reckless spending has led to record high mortgage rates, the highest in the “developed world” and increases in local rates, petrol and food prices and all the essentials of life.
Not much left over for mortgage repayments huh Helen and Mike?
I haven even got to the main thrust of this piece though(I’m sure many of you lefties wish you hadn’t read this far-I hope you can grasp what it is I am saying)
By attempting to “fix” this self made “problem” Labour will set up the economy for a fall, one such fall that is having repercussions on us at this present moment.
I’m talking about the sub-prime mess in the United States.
The sub prime fallout was basically caused by defaults in fringe private institutions and Freddie Mac and Fannie May, two state run lenders, lending money to those borrowers in the USA that wouldn’t normally be able to get funding to buy a house.
Surprise, surprise, they eventually couldn’t pay back the loans. Labour propose to State back these same sorts of loans because they are being politically and philosophically motivated to get another 3 years at plundering the treasury benches.
If we in New Zealand are unlucky to get this vermin voted back in again will the same government propose to “fix” our own sub prime fallout when it inevitably happens here and will we forget that they caused the problem in the first place?
I question the veracity and honesty of Labour’s position on this and urge them to seriously rethink a socialist backed dream of all of us owning a state funded house. I question a New Zealand mainstream media, especially the business and finance sector, that would let this lunatic idea go unscrutinised and unaddressed.
Here at Political Animal and Share Investor, we see our job as that of informing readers of things that are not ordinarily looked at or maybe looked at in a deeper or alternative way. A commonsense approach if you like.
Labour’s intention to foist this future “sub prime” housing fallout on Kiwis should be a major concern to all sectors of the economy, from business, to the higher and lower wage earners. It will impact on all of us if their plan gets snowballing.
The push into the Sub Prime lending market in New
Zealand will affect more than house prices, the economy
will be seriously affected when the fallout comes, and it will.
Look around now. The US sub prime fallout is already negatively affecting your share portfolio, your mortgage rates and is having a serious impact on business lending and therefore business and economic growth.
Imagine if you will the direct impact it will have on a small fragile economy like New Zealand.
The word serious would be understatement.
“The best minds are not in government. If any were, business would hire them away”.
“Don't be afraid to see what you see”.
Ronald Reagan
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c Political Animal & Share Investor 2008
I mentioned to one of my email correspondents that I would return in a few months to see my bank manager, "Bryce" at the ASB Bank in Albany after having seen him first late one Thursday at the end of February to re-negotiate the terms of our rather large mortgage.
