Monetary Justice

The Reserve Bank Governor, Dr. Allan Bollard, stated in his media release, 30 July 2008 that ‘… we cannot all pass on the higher costs to our customers or employers. If we do try to pass it on, then monetary policy will respond.’ By making this statement Bollard has finally accepted that orthodox economic polices are based on faulty doctrine. Orthodox economic polices are based on a doctrine, which defines the relationship between income and prices. J. M. Keynes, a British economist, advanced theories on macro-economics which still form the basis for policies applied today. In his General Theory of Employment, Interest and Money Keynes states: ‘Provided it is agreed that income is equal to the value of current output… all of which is conformable to common sense and the traditional usage of the great majority of economists…’ In other words In the process of producing goods and services there is sufficient incomes available to pay for the market price of those goods. Mr Bollard now q...

It’s not the “Big picture” – it’s the rotten canvas Brian Gaynor (Herald, Saturday June 28) says ‘None of our political leaders seem to have a big picture vision or any idea how to reverse this long term under performance.’ I disagree - as important as the big picture is, it will never come to much if it is painted on a rotten canvas. New Zealanders have never suffered from an absence of visionary political leadership, have always had a pretty good idea of what they want as a country and have never had an economy that has been rudderless. New Zealand’s political visionaries, with their big pictures, have just been painting their dreams on the rotten canvas of debt and compounding interest. We have a desperate drive for growth, decades of current account deficits, a never ending need for taxation and rates and the unavoidable boom-bust cycles. We are unable to achieve a stabile and prosperous economy. There is the difficulty of funding a generous superannuation scheme, the impossib...