Scoop Election 08: edited by Gordon Campbell

On income inequality

December 7th, 2011

The OECD report this week that has found New Zealand to have one of the fastest growing income gaps in the entire OECD will come as no surprise.

Since the 1980s, successive governments have been complicit in a wealth transfer of massive proportions, as tax revenues collected by increasingly regressive means (eg the flattening of the income tax scales, the imposition of highly regressive consumption taxes) have been wasted in tax cuts that have disproportionately favoured the wealthy, while a major form of wealth accumulation (via capital gains) has been barely touched at all.

It is not exactly rocket science that when you do such things, you will get a society of unequal opportunity and wasted potential, marked by the usual array of criminal behaviours and poor health outcomes that follow in the wake of systematic income inequality. Such problems are particularly rife in the United States, where Treasury and the Act Party continue to draw their inspiration.

The latest piece of highway robbery – a spending cap on government – has just been delivered via the Act Party coalition agreement. Well, at least we now see clearly that the Epsom tea party was less about keeping National in power, and more to do with sneaking an agenda of failed 20-year-old American extremist policies into Parliament, without any democratic mandate at all.

In practice, the spending cap will prevent government from responding to any social need in excess of the inflation rate, population growth or natural disasters. Presumably, it will not stop one departmental budget being raided to fund another – and for that reason the Maori Party will probably go along with an overall spending cap so long as they get the money for their programmes, whatever the cost to anyone else.

Some years ago, when Rodney Hide was using Colorado explicitly to justify his spending cap plans I wrote about the impacts (“Rodney Hide’s Latest Plan For Gutting Local Democracy”) in this article here and also here (“Rodney Hide’s Wet. Hot Colorado Dream”).

Thankfully, while the details of the Key government’s spending cap have yet to be revealed, they will not contain the referendum mechanism responsible for some of the most pernicious effects in Colorado. However, the core principle – that the public has no right to expect the taxes they pay will be spent on social services they use, but should be paid out instead in tax cuts to the rich – has been retained.

Talking of taxes, the OECD report recommends – as one of its three restorative principles – that the taxes on the wealthy in New Zealand should be increased. Fat chance. Over the past 25 years, New Zealand has chosen to increase taxes on the poor, and lighten the tax burden on the wealthy, to no perceivable social or economic benefit. The explosion of economic entrepreneurial activity supposed to result from lowering taxes on the wealthy? Like the Tooth Fairy, that mythical bonanza remains missing in action.

Good timing: the evidence of just where New Zealand sits in relation to the rest of the world on tax matters can be found in a little book that was officially launched last Monday.

The New New Zealand Tax System, by Rob Salmond is that rarest of beasts – a cheap, brief (129 pages, counting footnotes) well-researched and well-written account of just how New Zealand’s tax system compares to that of other countries. Wonder of wonders, Salmond’s tax analysis is also extremely easy for non-professionals to understand. It would be the ideal Christmas gift for the policy nerd in your life, and/or could be essential holiday reading for all of us.

The book contains particularly useful ammunition for those Christmas dinner arguments with that problematic father-in-law prone to bending your ear on just how heavily we are taxed in this country by Big Government.

If anything, the reverse is true. With research into income and consumption taxes to back it up, Salmond concludes ( p 121): “First, at very low income levels New Zealand charges more tax overall than each of the three most comparable countries [Australia, Canada and the United Kingdom] Second, at very high levels of income, none of the comparison countries levy lower taxes than New Zealand.” So, on the international comparisons, we tax the rich less, and we tax the poor more, than elsewhere. If you don’t believe me, get ahold of Salmond’s book.

Is the current government likely to do anything at all about this situation? No. National and the Act Party that it nurtures hydroponically in a glasshouse in Epsom have not had a new idea in 30 years. Why, as a nation of four million people, do we continue to look for inspiration to how market mechanisms operate in the United States, a country of 307 million people?

Why do we not look for inspiration to countries of similar size and social cohesiveness in Scandinavia? Finland, as the educational historian Diane Ravitch pointed out yesterday on RNZ, has one of the best performing, most egalitarian school systems in the world – and so, she asked, why doesn’t New Zealand look to it as a model? Instead we are, once again, looking to the United States and its charter schools experiment.

Unfortunately, Finland is no panacea to New Zealand problems with income inequality. In the very first article in which the term ‘Rogernomics’ ever appeared (headline : “Rogernomics in Finland” in the Listener in the mid 1980s) Douglas regaled me with how Finland was his inspiration, and by 2008, the fruits of such policies were having much the same outcomes. By 2008, what were the two countries in the OECD with the fastest growing rates of income inequality? Finland and New Zealand:

Statistics over the past two decades show that the growth in income disparities was highest in New Zealand, with Finland coming in second. However, New Zealand’s income gap widened only in the period from 1985 to 1995, while the past decade no longer saw any significant growth in the country’s Gini-coefficient figures, the standard unit of measurement in this context. In spite of the rapid growth rate, Finland is still a country with low inequality of incomes, clearly below the average.

That finally, is what is so disturbing about this week’s OECD report, because it shows the Gini co-efficient figures for New Zealand are kicking on very strongly once again, putting us back in 1985-1995 territory. Currently, there are countries with historical legacies of income inequality that are higher on average than New Zealand’s, but we are currently on a headlong track to the bottom – and with only failed policies for guidance, as promoted by a Treasury and an Act Party that seem to have learned nothing since the glory days of the Chicago School.


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    1. 56 Responses to “On income inequality”

    2. By Peter on Dec 7, 2011 | Reply

      I think it is worth studying these figures more to identify what they are telling us – but also I think standing alone these figures do not explain the problem fully – nor do they indicate the solution. The danger is that people with preconceived ideas will use them to ratify their own thinking with only casual analysis.
      Firstly by my observations and I am only going off the small attached graph – but it shows that income equality in in New Zealand increased by 31% between 1995 and 2008 whereas it increased by 55% in Finland and a whopping 63% in Sweden, the latter being the country often held up by the left as being the most equal place on earth, because they have high distribution of wealth via tax. One would assume that therefore there needs to be a lot more analysis of the reasons this is occurring. I would expect the current multi-cultural migration that is happening worldwide may be having an impact here.
      Secondly the difference between the highest income and the lowest income is not as relevant as the difference between the lowest income and the medium income. This being that inflationary price which is causing the biggest problem to the poorest people is driven to a large extent by the ability to pay by the bulk of the population. The higher income people often waste their money in inflating the price of things only they will buy. e.g. A house costs between maybe 300K and 600K to build – but a 300K housing in the suburbs might be worth 500K with land but put it on a peninsular on Waiheke island and it might be worth 2 or 3 million. Whether it is worth 300K or 2 mill is of no issue to the poor (except perhaps the tax if it wasn’t a private home) so much of the rich persons’ wealth is funny money. i.e. only as much as the next rich person will pay. However the cost of bread, milk and good food – is in demand by all – and if you just want to sell your tomatoes to the rich you wouldn’t sell many – so they will be priced to get the highest margin from the bulk of the population.
      The other problem is country wealth – so a high income in NZ – and I don’t mean the few who get silly money, is still low compared with other countries and so you get internal inflation pressures as commodities are snapped up by richer countries and or countries with huge populations – again impacting the poor; also we get pressures on key skills that we need in NZ to do almost anything. i.e. international competition for our basic commodity – skilled people – and I have lived and worked around the globe for years and kiwis are good at what they do and in high demand.
      Do we have a problem – yes we do – and it starts mainly because there is not enough wealth grown in NZ that is sourced from outside NZ. Lots of wealth created internally (which is funny money i.e. people just make up the value) Yes lower paid jobs have moved to other countries. My wife just bought me some Tshirts from overseas. Some were made in Jordan, some in Peru, they were shipped from Canada and she purchased them from a shop in the USA.
      I do not believe the NZ government – of any persuasion can help us just by redistributing wealth, as that helps in some areas and harms others ( a balance is needed and I am not sure we have that yet but I don’t think we are miles away) I think there are far more fundamental issues and they start by identifying how NZ Inc. can prosper in the world – so we can bring wealth into the country, so we can keep the skilled and talented people we need to create leverage, so that we can provide good high value jobs for those who have potential but need guidance.
      Education may well be the key – but for the short term it needs to be targeted education – I think, for a few years at least we need to think of a return on investment with education with payback within years not decades, whilst still maintaining our base education for the future.
      But all the education in the world won’t work unless we can attract and keep the best people in NZ to provide leverage – and unfortunately that means we often have to pay them international market rates or something close to those.
      In summary I don’t think this measure is a good one for identifying the key problems, nor for coming to early conclusions, but it may well provide some input to reflect on.

    3. By Dan on Dec 7, 2011 | Reply

      “I do not believe the NZ government – of any persuasion can help us just by redistributing wealth”.

      I do.

      So does anyone who isn’t a “the market is the answer, I don’t care what the question is” free market fundamentalist. The data is so obvious.

      Redistribute wealth upwards, as has provably been happening, and it gets locked into houses (due to a lack of capital gains tax). Redistribute it downwards, and it gets spent on things that stimulate businesses.

      I really don’t know how many more times this needs to be said.

    4. By Dee on Dec 7, 2011 | Reply

      Where can The New New Zealand Tax System, by Rob Salmond be purchased?

    5. By Peter on Dec 7, 2011 | Reply

      OK Dan maybe I am missing something – please give me an example of a country where solely by redistributing wealth they have for a sustained period of time with all the economic ups and downs solved all their social problems.

      My understanding is that the Scandinavian countries are the best examples of this – but they had unique circumstances and even now some of them are factoring in these stats shown in this report as having some of the biggest growth in the gap between the have and have nots.

      I know it has been said many times – but that doesn’t make it any more than a good idea to try. – And in New Zealand terms – it isn’t just the interplay within the country that needs to be considered – it is also the interplay between all the countries in the world that need to be considered, and our influence there is reasonably small.

      But maybe you are right a capital gains tax could just solve all our problems, like it has in all the other countries who have such a tax.

    6. By Elyse on Dec 7, 2011 | Reply

      @ Peter
      “I do not believe the NZ government – of any persuasion can help us just by redistributing wealth”.

      The Liberal govt did this in the 1890’s by breaking up large land holdings because too few owned too much. Perhaps they remembered the reasons why immigrants came here in the first place: to escape the inequalities and penury of England?

      The right wing will not be happy until we live once again in a Dickensian world.
      Intelligent wealth holders like Warren Buffet are suggesting a sharing of wealth via a fairer tax system. He wants to pay more tax. Imagine that. Perhaps he read A Tale of Two Cities.

    7. By brybry on Dec 7, 2011 | Reply

      We keep saying that these policies don’t work, but actually, they do. They work becasue the desired outcome is NOT equality, rather it is robbing the poor and middle class and transferring the wealth to an extremely rich few. Once we admit that this is the objective, then we can say that these policies work marvellously well!

    8. By Elyse on Dec 7, 2011 | Reply

      Excellent speech on topic by Barack Obama.
      Change the place names and he could be addressing Kiwis. Situation is more dire in USA but we’re catching up.

    9. By Dan on Dec 7, 2011 | Reply

      Peter: “please give me an example of a country where solely by redistributing wealth they have for a sustained period of time with all the economic ups and downs solved all their social problems”

      Straw man. A classic tactic of putting words in my mouth. I never claimed what you say I am claiming. Nor do I subscribe to the belief that if you can’t immediately solve all social problems you should just not bother.

      But, now that you mention it, there is a large body of research that shows that income inequality correlates with a raft of negative social statistics. From the wiki on “the Spirit Level”:

      “(The Spirit Level) claims that for each of eleven different health and social problems: physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being, outcomes are significantly worse in more unequal rich countries”

      Maybe you don’t accept the findings but you will have to explain why, and “they don’t fit with my ideology” is not an acceptable explanation.


    10. By Dan on Dec 7, 2011 | Reply

      Elyse, if I had a buck for everytime Obama did a great speech and followed it up with a lame capitulation and no action, I could solve the global financial crisis myself using my piggy bank.

    11. By Joe Blow on Dec 7, 2011 | Reply

      I’ve had a look at the overview of the OECD report and it is calculating using “pre-tax” incomes. I’m wondering if they have factored in the Family Tax credit into their income calculations… It also seems strange that pre-tax incomes are more uneven between rich and poor because of unfair tax distribution. Possibly the relationship can be explained by the wholesale move to GST, which is likely not factored into the income calculation. I’m not very good with numbers…

      It was interesting that the income gap in Spain, France and Portugal has stayed steady. All have high public debt (Spain 60% of GDP, Portugal 92%, France 60%) and Spain has an unemployment rate of around 20%. I wonder if they have instituted GST like tax systems? Wait let me check. Na, France has a VAT which accounts for 50% of state revenue. Na, not sure about all of this. I wonder if they tax imports more than we do?

    12. By Joe Blow on Dec 7, 2011 | Reply

      @ Peter

      I’m not sure that the greater increase in income debt for Finland between 1995 to 2008 compared with New Zealand means much. We did institute our privatisation and tax reduction policies more radically and quickly than elsewhere. The Fourth Labour government did reduce the top marginal tax rate from 66% to 33% in the 1980s… Therefore, we may have had a faster widening gap from 1985 to 1995 and it just took Finland longer to catch up.

      Peter, are you suggesting that we should protect our export industries by putting tariffs back on imports, which would in turn generate more tax revenue?

    13. By Peter on Dec 7, 2011 | Reply

      Joe – no I am not suggesting protecting our export industries – I am advocating ensuring our brightest and smartest people are focused on increasing our exports. I see NZ has lots of small innovative companies and that competing in the wide world is rather tricky when you add up marketing, knowledge of overseas markets access to the right players etc. – its another topic but my base idea is around a series of branded coops more like Virgin than Fronteria. Co-ops that deal in multiple – perhaps complementary products where the clever people can concentrate on their products but they collectively can have some international clout and services resources. I also believe in the worker ownership model as well – so in many ways I am a great believer in an equal society – but believe in people working together to achieve it – I don’t see profit in trying to claw things back from the rich. People get to where they are for whatever reason, I prefer the hard work model. I also would like people to choose to focus on the external economy rather than the internal one. e.g. I am a sole operator in IT, I have many opportunities to work in NZ but at the moment am trying to maintain my focus on working overseas via my NZ company. So I earn better wages overseas but pay my tax here. So far this year I have worked 2 months in the UK – dialling in remotely from NZ (actually know of another NZ company doing work for these people as well) and I just did 2 months at Macquarie Bank in Sydney initiating a project for them. I had thought of giving the Reserve bank a tool to use an internal variable levy on mortgages to help control inflation rather than just using the interest rate (money could go to say the super fund or such) which does impact our exchange rate – but that is just a thought.

      So I have a couple of things from above to listen to and read, and think about.

    14. By Joe Blow on Dec 7, 2011 | Reply

      correction = the OECD report only uses pre-tax incomes when assessing the increase in top 1% of income earners. These increased because of “a more global market for talent and a growing use of performance-related pay
      which particularly benefitted top executives and finance professionals, as well as changes
      in pay norms”.

      They must be calculating ‘income’ as after tax income then I guess.

    15. By Joe Blow on Dec 7, 2011 | Reply

      @ Peter

      I guess the trend of globalisation in OECD countries over the past 30 years have been good to you Peter. But the point is that they haven’t been good to everybody. High-skilled workers like yourself have earned more while low-skilled workers have earned less. Can everyone be a sole operator IT expert Peter? I notice from your posts that you base everything on your own experience and seem unable to comprehend the experience for others not as fortunate as yourself. Are they just stupid Peter? Is that their problem? Is it their fault?

      The OECD report does not only recommend tax reform, it also recommends investment in human capital (with increased tax revenue from a fairer tax system). This would mean “better job-related training and education for the low-skilled (on-the-job training) [to] help to boost their productivity potential and future earnings” AND increased access to tertiary education. The report also suggests better labour market regulation to allow low skilled workers better bargaining power on wages.

      Tell me does your master plan involve employing people with high skills or low skills? Smart people are only as good as the opportunites and skills they are lucky enough to acquire… I guess you think you’re doing well because you’re smarter than everyone else not because of the opportunities you are lucky enough to acquired? Am I right?

    16. By Leon Henderson on Dec 8, 2011 | Reply

      To Hell with your rotten capitalism and your rotten “markets” Peter.

    17. By Elyse on Dec 8, 2011 | Reply

      @ Dan
      I agree, Obama talks a good game but doesn’t act on it.
      The speech was exciting because he was channelling the two Roosevelts, both of whom introduced radical programs for adjusting income inequality.
      I’ve not heard a contemporary Labour politician praising MJ Savage and most Kiwis under the age of 70 know nothing about him or those times in the past that brought about the radical changes which are the basis of our way of life.
      “Those who cannot remember the past are condemned to repeat it”.

    18. By Brian on Dec 8, 2011 | Reply

      Sweden and Finland joined the EU in 1995. Whether this has had any influence on their growing income disparities makes for interesting research. Note that Norway is not a member of the EU. In any case I’m reading some untruths and misinterpretation on the report figures. To quote the report “Public cash transfers, as well as income taxes and social security contributions, play a major role in all OECD countries in reducing market-income inequality. Together, they are estimated to reduce inequality among the working-age population by about a quarter on average across OECD countries (Figure 5). This redistributive effect is larger in the Nordic countries, Belgium and Germany, while it is well below average in Chile, Iceland, Korea, Switzerland and the United States”. We are 21st out of 34 countries studied, with Australia at 23, UK at 27 and US at 29- all countries we seem to take inspiration from, and admire.

    19. By Joe Blow on Dec 8, 2011 | Reply

      @ Leon

      Um Leon the OECD is not anti-markets or capitalism either:

      “This report finds that neither rising trade integration nor financial openness had a significant impact on either wage inequality or employment trends within the OECD countries. The wage-inequality effect of trade appears neutral even when only the effects of increased import penetration from emerging economies are considered – a finding that runs counter to the expectation that trade flows should drive down wages of workers in manufacturing and/or services in OECD countries. However, increased imports from low income countries do tend to heighten wage dispersion, although only in countries with weaker employment protection legislation.”

      I particularly like this comment:

      “Inequality also raises political challenges because it breeds social resentment and generates political instability. It can also fuel populist, protectionist, and anti-globalisation sentiments. People will no longer support open trade and free markets if they feel that they are losing out while a small group of winners is getting richer and richer.”

      The report seems to be saying that with a fairer distribution of income through tax reform along with better regulation protectioning labour that open trade and free market capitalism will work! This could be the beginning of a new economic policy direction somewhere in between the wholesale freemarket agenda on one side and a return to Keynesianism on the other… If the fat cats don’t spread the wealth around those protectionist stirrings I was talking about will soon come home to roost… they better wise up!

      Peter’s going to have to give away a little more of his earnings each week if he wants the human capital he needs for his master plan to work. Of course if we raise taxes he’ll just pay them somewhere else and probably import ‘smarter’ people from elsewhere…

    20. By Joe Blow on Dec 8, 2011 | Reply

      @ Elyse

      Don’t forget to teach them about John A. Lee too. He was the true radical of the Labour Party at the time…

    21. By Leon Henderson on Dec 8, 2011 | Reply

      Howdy Joe Blow! – Yeah, I know that the OECD isn’t exactly a Bolshevik organisation (although that’s what Peter-The-Capitalist will think!!!) but I was just peeved-off at the way that individuals like Peter continue to “talk” and behave as if the Rotten-Corrupt Monstrosity of Global Corporate Capitalism and it’s “Markets” and the Vicious Bloodsuckers in Wall Street and the London Business District who slyly manipulate them, (so beloved of people like Peter) hadn’t just been bailed-out globally to the tune of more than FORTY-SEVEN-TRILLION-DOLLARS, to prevent the whole Crooked Racket And Scam of Global Corporate Capitalism from collapsing down the Economic Lavatory wherein it so truly belongs!!!

      Joe, the foreign-owned corporate mass-media (and of course the equally reprehensible National Radio) in this country have been, just like Peter, acting as though nothing has happened, and not only that, they have been making strenuous efforts ever since the early years of 2009, to try and get another “Housing Boom” rolling by “talking-it-up”. I cannot count the number of times that National Radio in the morning and evening, virtually every day, have got grovelling “interviewers” letting Real-Estate “spokespersons” wax lyrical about “What A Great Time It Is To Buy/Sell In The Housing Market!!!”.

      Meanwhile one of the “major daily” so-called “news”papers in this country totally ignored the latest South Canterbury Finance development a-la Serious Fraud Office Prosecutions pending!!!

      See, this is all part and parcel of Peters’ Beloved “Market”, Joe.

      The “Peters” of this world want everything to be this way (but without Serious Fraud Offices in the equation, of course!!!), because it is in their pecuniary interests for it to be so.

      But not in anyone elses interests!!!

      Also Joe: Trade YES “Markets” NO!!!

    22. By Peter on Dec 9, 2011 | Reply

      Leon you spout a lot of rubbish – well in terms of me being a capitalist. Yes I do own my own home; one home that I live in, I have no super, no shares, and no money to speak of in the bank, though my mortgage is small – but nothing else – If I am the symbol of capitalism than I would imagine in all probability you may well be a bigger one than I.
      But it is rather pathetic to try and insult your way to a considered opinion – and I apologise for doing so now in a minor way.
      I agree this South Canterbury Finance and all the other finance companies that have played fast and loose is disastrous.
      But funnily you have actually made my point.
      That much of the wealth owned by the so called rich is fictitious. e.g. Someone has a million dollars in a finance company – a good bit of wealth – tomorrow it collapses and they have zilch – so considering those two days how much wealth did they have? If you did the above mentioned report on the first day you would get a different answer the second day – however the people with low, none or negative wealth would not have changed, their poverty is real. Equally is a house with a sea view really worth a million more than a house without a sea view?
      That was the original point I made and suddenly I am a major capitalist. Well you sir could also become one simply as a fiction writer.
      So my comments really said that because much of the top line of wealth is arbitrary according to market fluctuations and that the low wealth i.e. the poor is real, then I think it would be better to understand those areas that cause both internally influenced inflation being the difference between the medium income/wealth and the low income/wealth (i.e. the sizable proportion that can and will pay the increased prices causing the poorer people to struggle) and the externally influenced inflation being the competition for necessary resources between wealthy or large consuming countries and smaller countries.
      I did also suggest the idea of co-ops and such worker owned businesses (and to Joe Blow I am assuming all skill levels if possible) – which I am not sure is a capitalist concept – though I accept this is not an easy solution.
      Joe – “Inequality also raises political challenges because it breeds social resentment” I too like this statement and of course it is true – however it is equally true to say that “Equality also raises political challenges because it breeds social resentment” I have lived and worked in Sweden and Denmark that are reputed (until this last OEDC report in the case of Sweden where inequality is growing albeit from a lower base as fast as NZ) to be the most equal of countries – but there is also major resentment going the other way.
      Yes Joe I have done quite well – but that is the end result of a lot of work, a lot of hardship, quite a bit of fun as well and 37 years of work, it is also now I am 55 getting towards the end of my successful time in this game. My experience isn’t confined to my current situation rather my whole life time. My ideas change – I consider other opinions, sometimes I change my mind on things sometimes I come up with new issues to ponder. You probably need to broaden your thinking, try arguing the other side for a change; I often play that game and for all you know I may well be doing so now.

      Actually I will probably be paying less in tax in the near future as my income drops and I need less – funnily enough when I did the sums I would be financially better off under the Labour policy proposals than the national ones.

    23. By Leon Henderson on Dec 9, 2011 | Reply

      Ahhh, so it’s “Peter The Proletarian” now is it, Peter?

      A “Proletarian” who writes like a Treasury official!!! A “Proletarian” who sounds like a mouthpiece for the Business Roundtable (Peter says that equal national wealth distribution leads to as much societal disruption and trouble as does wealth inequality!!! Peter reminds me of Roger Kerr of the Business Roundtable who has been going around ranting that the massive collapse of capitalism from 2008 and onwards, WAS, AND IS, DUE TO TOO MUCH REGULATION!!!).

      But then again, Peter DOES say that he likes to “be creative” (“I often play that game and for all you know I may well be doing so now”) when it comes to the ways he portrays himself.

    24. By Joe Blow on Dec 9, 2011 | Reply

      @ Leon

      Chill bro! Be nice. You’re doing well not mentioning the “J” word but as one who has been called a capitalist pig (and a lot of other things) by you in the past I feel that you need to calm down a bit and actually read what Peter is saying maybe two more times before throwing insults. Actually just don’t throw insults at all. Insulting and debating or discussing a topic are two very different things.

    25. By Joe Blow on Dec 9, 2011 | Reply

      @ Peter

      Yeah, I like the coop idea and I also agree that we need more investment in technology. But my point is that if the economy as it is right now and during the boom time hasn’t provided us with this investment, what’s wrong with the government offering a helping hand? Especially when as a country we invest one of the lowest proportions of GDP in R&D in the world. Look you’re having to fly off around the globe to do your work. Why couldn’t that work be done here? And investment in skills is not going to cut it on its own. We need actual investment in ideas.

      Now, I’ve got news for you, to someone who can’t afford a house no matter how smart they are and how much they try and save, which is quite a lot of us these days, you’re rich Peter. You can’t see past your own nose.

      And your rant on equality breeding resentment the other way is hillarious. It’s democracy baby! the resentment of 1% the other way is a lot different from 99% resentment upwards. In a democracy, if the majority of us aren’t getting a good deal out of the social contract anymore, the majority eventually get up in arms. It’s that simple!

      Do you have children Peter?

    26. By Ian on Dec 9, 2011 | Reply

      Unfortunately, each generation seems destined to relearn the same lessons as its grandparents. Progressive taxation and the leveling of incomes was the norm throughout the developed world in the three decades after World War Two. So was the regulation of capital flows and the consequent evening-out of the business cycle.

      The Germans called it the “Economic Miracle” and the French called it the “Thirty Glorious Years”. Half way through, a British Prime Minister campaigned for re-election with the slogan “You’ve never had it so good!” And he was quite correct.

      And the interesting thing is that, through much of this period, most of the major economies were run by right-of-centre parties, with leaders such as Adenauer, de Gaulle, Churchill, Macmillan, Eisenhower, Menzies, Diefenbaker etc.

      But, around 35 years ago, common sense started to go out of fashion and ideology took over. So, no wonder we’re in a mess!

    27. By Leon Henderson on Dec 10, 2011 | Reply

      Fair enough Joe Blow: I am prepared, being democratically-minded, to give Peter-The-Fascist a great big platform for political espousal anytime!!!

    28. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      Just a simple question = how do you have trade without there being a market within which the trade takes place?

    29. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      I nearly forgot! What do you make of these protests against Putin?

    30. By Leon Henderson on Dec 10, 2011 | Reply

      Gooday Joe.

      First of all, Za Vladimir Putin!!!

      How do you have trade without a “market”??? Well, you operate “Trade” on a barter system: nobody is selling, or is trying to sell, anything. In the USSR the word “market” (in all of it’s forms/variants) was classified as an extreme obscenity and was illegal.

      But then along came Globalist Gorbachev.

    31. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      Isn’t trade by barter still consist of a market anyway? Supply and demand must still affect a barter system…

      Anyway, I’ve never ever heard of the USSR trading by barter without using a medium of exchange… The Russian ruble has been the Russian unit of currency for over 500 years.

      Please explain.

    32. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      That should be “Doesn’t” not “Isn’t” sorry.

    33. By Leon Henderson on Dec 10, 2011 | Reply

      Those “Anti-Putin Protests” Joe: a couple of thousand people at most in a city of at least sixteen million!!!

      They are organised by an American Jew named George Souros (an infamous Wall-Street currency speculator who in the early 1980’s ripped off, in a single day, the Bank Of England to the tune of five-million-pounds, and who in the mid-1990’s ripped the economic guts out of Malaysia, Indonesia, Jaspan, South Korea, and Thailand.

      None of those countries have ever been able to even start recovering from the horrendous “Blood Loss” that this evil Wall Street vampire is responsible for).

      Souros and Wall Street/London Business District are behind such “NGO’s” as the “National Endowment for Democracy” which is a direct arm of Mossad, the CIa, and M15/16, and is extremely active in Russia, Belorussia, and Ukraine (and to name only three territories).

      The NED and it’s affiliated organisations are responsible for years of infiltration, sabotage and outright terrorism (bombings) in Belorussia, and Russia – the Jews are supporters of the rebel Muslim republics in the Far South of Russia in the Caucausus Mountains.

      Although these Muslim republics (Chechenya, Ingushettia, and Dagestan) that lie along the exact border between Europe and far-northern Asia are only tiny, they nevertheless in geopolitical terms are pivotal: they literally are a “Powder Keg” like the Balkans used to be.

      They are the Achilles Heel of Russia, and the Russians do not know how to deal with them except by using massive, brute-force to repeatedly smash them.

    34. By Leon Henderson on Dec 10, 2011 | Reply

      no Joe, Trade by Barter is not a “market” because in a Socialist World it is an agreement between countries: the entire ideological construct of how they deal with each other externally is completely different to the way things happen now.

      In a Socialist construct, nobody is trying to get more than anyone else, and instead, everyone collaborates to help nations who are in peril: when the Zionists/USA put Pol Pot into power in Cambodia, and he went on his Zionist-backed mass-murder spree, and created one of the worst famines that this world has ever seen, the Russians and so-called “East” Germans sent huge “Food Fleets” to Cambodia for sheer humanitarian purposes.

      joe: do you contribute financially to Werewolf?

      I do.

    35. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      (My post didn’t come up cos it’s got a link. Here’s the version minus the link:)

      Russia and barter economys

      That was pretty much what I expected your take to be on the Putin protests. I think you’ll find that you are talking about a planned economy (as opposed to the USSR command economy) and will find that there has never really been a society based solely on a barter economy as early societies usually existed on what were more like gift economies.

      I think that if you have a barter economy you will need people to go to big markets so that they can find someone that needs the product that they have for barter. If there is an under supply of potatoes than it will cost more corn cobs and peas to exchange for potatoes. Thus the laws of the market will still remain.

      I don’t contribute financially to Werewolf. What’s your point? They aren’t a non-profit organisation like Greenpeace or something like that. They make money through advertising, don’t they?

      Special votes

      Good news = Paula Bennett lost Waitakere. The Greens got an extra seat with the Nats dropping to 59 seats.

      Bad news = Nicky Wagner won Christchurch Central. The Maori Party maintained their share of the party vote so Parliament will have 121 seats so the Nats, ACT and United hold a 61 seat majority.

      I’ve never been so sad to be right…

    36. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      Nearly forgot! The final result on the referendum on New Zealand’s voting system has also been confirmed, 57.77% voted to keep MMP and of those who wanted a change, 46.66% preferred the first passed the post system.

    37. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      I think you need to read more socialism from real socialists Leon. I think you’ll like it:

      Spreading the pain and pocketing the gain

      “A planned economy, under the democratic control of the majority in society, is the only way to avoid the damaging effects of the capitalist cycle–booms in which the lion’s share of the gains go to the rich, and slumps in which millions of people are tossed out of work and left to rot.”

      “But now that we’ve entered a long-term period of economic crisis, a debate about alternatives is inevitable. It’s time to make the case for socialism.”

    38. By Joe Blow on Dec 10, 2011 | Reply

      @ Leon

      Here’s the Committee for Workers’ International (CWI) view of the protests against Putin in Russia:

      Thousands arrested after two days of street protests

    39. By Joe Blow on Dec 11, 2011 | Reply

      @ Leon

      I find it quite surprising that you haven’t mentioned Georgia in your usual diatribe about US/Jewish machinations against Russia. A large part of that conflict is due to both Russian and American imperial competition for securing access to the Caucasus oil supply. Russia claims it was merely supporting minorities in the region (by bombing the bejesus out of Georgian civilians) but really it’s about that pipeline I’ve tried to tell you about several times – the Baku-Tblisi-Ceyhan pipeline.

      Anyway, don’t take my word for it. Here’s an article by some real socialists, our very own International Socialist Organisation (ISO):

      Russia and USA clash in the Caucasus

      Michel Chossudovsky’s ancestry is Russian, right? That couldn’t have anything to do with his website’s favourable view of his motherland, could it?

    40. By Joe Blow on Dec 11, 2011 | Reply

      @ Leon

      Here is another article (by real socialists – ISO) on Syria that I thought you might appreciate:

      The Revolution in Syria

    41. By Leon Henderson on Dec 13, 2011 | Reply

      Joe: Georgia was an ancient Christian protectorate of Russia – Georgia and Armenia would not even exist if it wasn’t for the Russians protecting them from the Turks.

      What is more, the Georgians are not even Orthodox Christians, but are “Nestorians” who technically are Heretics when looked upon by Russian Orthodox Doctrine.

      Nevertheless, the Russians always “stared down” the Turks to protect the Georgians, even though the Georgians are not Orthodox Christians, and the Russians actually have no theological reason at all for defending the Georgians, but the Russians have got massive headspaces (Konstantin Ziolkovsky!!! Ivan Pavlov!!! Igor Sikorsky!!!) and have got a propensity for “thinking outside the the square” and their Faith is extremely flexible in the way that it has the capacity for forgiveness.

      Joe: You ought to bone-up on the history of Russia and Turkey: for literally hundreds of years they have fought massive wars against each other, the Turks were always trying to invade Russia.

      But the Russians pulverized the Turks again and again and again.

      Your Mates, Joe, the Pommies and the French (a-la Libya!!!)did everything in their power to aid and abet Muslim Turkey against Christian Russia.

      Did you read those words Joe?

      Muslim Turkey against Christian Russia. Pommies and Frogs supplying the Turks with weapons: providing them with guns to use against Christian Russian soldiers.

      Building the Turks massive warfleets to use against the Russian Navy on the Black Sea (the horrendously outnumbered Russians sent them, every time, down to Davy Jones: in one battle alone, nineteen Russian battleships took on a colossal British and French – built Turkish Armada of more than sixty warships, and the Russians sent every single Turkish ship to the bottom of the Black Sea.

      Am going to now warn you Joe, to be careful when you try and tell me things about Russia: I might know more about Russia and the Russians than you do Joe.

      And the so-called Russian “attack” against Georgia!!!

      Joe: have you ever heard about a race/nationality called the “South Ossettians”???

      They are Russian Orthodox Christians (not Nestorians) and are not Georgians either, and they want to be members of the Russian Federation.

      Your Pals Joe, the Zionist/USA are massively active there, and have been for years: the USA carpet-bombed South Ossettia, in the late 1990,s – and the reason?

      Well there are two: (a) South Ossettia is small and weak, with a population of only sixty-thousand, and so is is irresistably attractive as a target to a massive, cowardly, bully like the USA), and it is in the Caucausus Mountain Range – which is the “New Balkans”.

      The Caucausus is the “Powder Keg” of Europe.



    42. By Leon Henderson on Dec 13, 2011 | Reply

      Joe, you also speak through a hole in your Arse with your slander against President Vladimir Putin.

      President Vladimir Putin of the Mighty Federated States of Russia.

    43. By Leon Henderson on Dec 13, 2011 | Reply

      Speak of President Putin with respect: Russia is very strong, and all the time is growing stronger: she heroically has got a way of being able to literally dig her way out of the grave – she fights back, and wins, against seemingly impossible odds.

    44. By Leon Henderson on Dec 13, 2011 | Reply

      Joe: I think I owe you an apology somewhere, so am going to apologise to you here.

      Am absolutely crippled with computer trouble and can barely even get online any more.

      cheers Joe.

    45. By Leon Henderson on Dec 13, 2011 | Reply

      Oh, Absolutely Crash-Hot: Bennettb dumped on it’s Fat Arse!!!


      So, Joe, (fingers crossed) Sue Bradford now in Parliament?

    46. By Leon Henderson on Dec 13, 2011 | Reply

      Joe: Russia is the Mighty Fatherland and Motherland of brilliant thinkers and writers such as Michel Chussodovsky.

    47. By Leon Henderson on Dec 13, 2011 | Reply

      Vladimir Putin:

      Da Prez!!! Russian Federation!!!

      Joe Not Happy!

      Hey Joe, Mr. “Hopey Changey” is not happy either!!!

      Neither is his Boss bin-Yamin Netenyahu!!!

    48. By Leon Henderson on Dec 13, 2011 | Reply

      What was meant in the previous statement is that the owner of “Mr Hopey Changey” Obama, in the form of the Rothschilds, through their USA Governor Henry Kissinger, and their “Face” in the form of bin-Yamin Netenyahu, …. well, what more needs to be said???

    49. By Leon Henderson on Dec 13, 2011 | Reply

      Hey joe: here is a picture of a Nice Fascist for ya!!!

    50. By Leon henderson on Dec 13, 2011 | Reply

      Joe: I do not know what kind of music you listen to, but I would highly recommend to you “British Steel” by Judas Priest.

    51. By Joe Blow on Dec 13, 2011 | Reply

      @ Leon

      It looks like you have a VERY rosy view when it comes to Russia… Tell me, with your vast knowledge of Russian history, in your eyes, can the Russians do any wrong?

      What did you think of the articles by real socialists I pasted above?

    52. By Elyse on Dec 13, 2011 | Reply

      hey Leon,
      Not that I want you encourage you on this touchy subject, but google Haim Saban to learn about the power behind AIPAC and the Democratic throne.

    53. By Leon Henderson on Dec 14, 2011 | Reply

      The Russians can do no wrong joe: they are fabulously intelligent, and jaw-droppingly brave.

      Za Rus!!!

      Elyse, I Love You!!!

    54. By leon Henderson on Dec 14, 2011 | Reply

      Elyse, I love you!!!

    55. By Leon Henderson on Dec 14, 2011 | Reply

      Hullo Elyse: yeah have read a lot about AIPAC on Global Research, they basically drag the USA around by the nose.

      Mr “Hopey Changey” is their glove-puppet!!!

    56. By Leon Henderson on Dec 14, 2011 | Reply

      Have committed a heinous crime: when listing somewhere on Werewolf some of the great Russian Geniuses who are responsible for creating our modern High-Tech world, I forgot to include Dimitri Mendeleev, the creator of the Atomic Table Of The Elements (otherwise known as The Periodic Table Of Elements).

      Mendeleev totally revolutionised European science: he literally dragged it out of the Paracelsian era (Paracelsus was regarded as the greatest physician in the Europe of his time: he was an enthusiastic advocate of the curative powers of mercury – administered both orally, and applied as poultices on wounds!!!
      The European physicians of those days, and those times were not long ago … were nothing other than ignorant, superstitious, barbarians: there was everywhere in Europe the saying: “If your ailment does not kill you, then your physician definitely will!!!”.

      One of Ivan IV’s (“The Terrible” – a grossly inaccurate misrepresentation of his name, and in Europe he was never known as “Ivan The Terrible”, but instead was known as “Ivan The Awesome” or “Ivan The Astounding”) Ministers became ill, and Ivan had at his Court an English “medical” doctor.

      The “doctor” was a typical “physician” of those times and he cut open a vein on the Ministers’ arm and “bled” him copiously: in those times, it was thought that disease was produced by “humours” that “lived” in the blood, and that by draining large amounts of blood out of the patients, you might be able to get rid of most of the “humours”.

      Russia in those times was one of the most backward countries in Europe: she was, in spite of having for those times, modern firearms, in every other respect, entirely medieval. That is why Ivan had an English physician, as they were very highly regarded in Europe for their supposedly advanced medical expertise!!!

      But this was the age of Paracelsus, who thought that mercury was a universal elixer for health!!!

      So what happened to Ivan’s Minister?

      Well, he died.

      Czar Ivan asked the physician: “Why did he die?”.

      And the physician said: “Because, Sire, I do not think I bled him enough!!!.

      Am writing this stuff primarily for you, Joe Blow, and it is not intended to be an “angry” response to what you have said about Russia: you seem to think that I am some kind of Nazi, but actually I am not, and instead am the diametric opposite of a Nazi.


    57. By Leon Henderson on Dec 14, 2011 | Reply

      Elyse: was hammered out of my brain on some pretty brutal Home-Brew when writing the “I Love You” messages.

      Have been re-reading them, and have realised that they could be perhaps easily misinterpreted, and you might think they are a bit weird; so Elyse, was just drunkenly trying to say that I liked you!!!

      And I do!!!

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