Councils Holding the Country to Ransom

[Perry]

The upshot is that a little tinkering will not bring about lasting change.

Unfortunately, the socialists will not want to hear - never mind accept - that situation.

--EDIT--
PS. A very telling item, that article. Thanks.

[Davo36]

A generation/30 years ago, was an out-of-the-box situation. It was a golden time for prosperity, brought on by the post-war conditions. Since the 80s, things have been regressing back to the 'norm.' The (unpalatable) fact is that great inequality IS the norm and has been throughout history. Apart from brief periods brought on by catastrophe, it's always been the case that home ownership was only for the 'haves.' (Not to say that's right or desirable, just that it is.)

Why do you think that the same thing is being repeated in the other countries that were involved in the Wars, and particularly those that benefited from reparations, either directly or indirectly?

NZ benefited from a protected trade environment with the UK and a lack of labour and import duties meant high local wages for unskilled jobs. And of course the money flowing in meant social programmes galore. But it's now far enough down the track that those times are well gone and not to be repeated. Yet societal memory is short and people forget that it wasn't like that before the Wars.

This article makes the wider point that only catastrophes bring about the narrowing of the inequality divide and that there is unlikely to be such in the future. The upshot is that a little tinkering will not bring about lasting change.

That is a very interesting comment actually.

I read the article.

I find it all a bit defeatist. We started down this road around 35 years ago. With the 1984 Labour government (ironically enough) and Rogernomics.

Surely we could undo some of those changes if we wanted to?

Whether we should or not is another question, but it can't be impossible.

[sidinz]

Rogernomics is a little before my time as I was only a kid then, so I can't comment on what he actually did. However, I do know that something had to be done as we could no longer afford those programmes and we were living beyond our means and heading down the gurgler.

So the 80s being the tipping point is not because of Rogernomics. It was the tipping point in other countries too, according to that article.

[eri]

imagine going backwards on telecommunications

no more smartphones + wifi

each house has a dynamo phone that rings a morse code signal to let you know which phone on the party line was being called

an operator would be employed every 26 houses to connect to outside lines, great employer that was!

no more paying bills over the internet, you'd go into the post office, there'd be 1 every km or so, another great employer!

and fills out paper forms to pay bills via the post office banking system

if you couldn't get to a post office you could have a cheque account and post cheques...lots of people employed by banks to handle the cheques, another great employer

[Perry]

Very selective. Technology and economics don't have to work that way.

Out-sourcing hundreds of thousands of kiwi jobs to foreign countries with few to non-existent labour protection laws was both hypocritical in the extreme and a critical factor.

[Perry]

A generation/30 years ago, was an out-of-the-box situation.

A couple of items that have an interesting relationship with all this . . .

PM Jacinda Ardern pumps NZ's 'wellbeing budget' at World Economic Forum

Study of millionaries shows the six 'wealth factors' to get rich

She found that six behaviours, which she called "wealth factors", are related to net worth potential, regardless of age or income:

• Frugality, or a commitment to saving, spending less, and sticking to a budget
• Confidence in financial management, investing, and household leadership
• Responsibility, which involves accepting your role in financial outcomes and believing that luck plays little role
• Planning, or setting goals for your financial future
• Focus on seeing tasks through to their completion without being distracted
• Social indifference, or not succumbing to social pressure to buy the latest thing

[Sportsvee]

Worker gets pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer wanting pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer....

Also:
The more the employee earns, the more paye they pay.
The more a company pays an employee, the more they contribute to kiwisaver.
The more the company earns, the more gst they pay.

And so it repeats.

[Wayne]

Worker gets pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer wanting pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer....

Also:
The more the employee earns, the more paye they pay.
The more a company pays an employee, the more they contribute to kiwisaver.
The more the company earns, the more gst they pay.

And so it repeats.

So we should pay people less and that would solve things?

[Perry]

Worker gets pay rise ->

So we should pay people less and that would solve things?

The bit that's missing is that the Worker gets pay rise part is independent of any increase in productivity.

[flyernzl]

The only pay rise worth having is the one nobody else gets.

[Davo36]

Worker gets pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer wanting pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer....

Also:
The more the employee earns, the more paye they pay.
The more a company pays an employee, the more they contribute to kiwisaver.
The more the company earns, the more gst they pay.

And so it repeats.

You pay people less, they can afford less, so then companies earn less, so then they pay less...

Which way would you rather it go?

[Perry]

Worker gets pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer wanting pay rise -> company charges more to cover cost -> consumer pays more for good/service -> consumer goes to employer . . . .

You pay people less, they can afford less, so then companies earn less, so then they pay less...

Which way would you rather it go?

Either way, with no increase in output / productivity, it's a 'zero-sum-game,' as the expression goes.

[Bob Kane]

Either way, with no increase in output / productivity, it's a 'zero-sum-game,' as the expression goes.

Except if you have a mortgage.
If wages go up and prices go up then you win as your mortgage stays the same.
I love inflation.

[flyernzl]

But it screws the thrifty, who are the savers.

Moral outrage?

[Don't believe the Hype]

Except if you have a mortgage.
If wages go up and prices go up then you win as your mortgage stays the same.
I love inflation.

This is a critical part of wealth creation that is simple but many don’t realize AND is rarely talked about. The inflation adjusted (real) value of a loan reduces over time without a single principle payment.