Wednesday, September 16, 2020

Mike's Minute: No Prime Minister, the economy is not back to level 1

You can feel the incredulity meter ramping up.

Good on all those who spoke out yesterday calling out the Prime Minister over her claim on Monday that the economy was back to level 1. 

Quite apart from the fact it isn't, the claim was based on a small skerrick of card data that spanned a ludicrously short period of time. It indicated nothing other than we had been locked down and when we weren't as locked down, some might have gone out for a dinner.

It's the bounce-back we've seen before, the bounce-back seen all over the world. The shop takes in nothing one week, and the next week under a new level it takes in $10, half of which wasn’t spent the week before. So, from $0 to $10 looks more impressive than it actually is.

The Prime Minister's fundamental lack of economic understanding, if she's not careful, is going to get her in real trouble. Economies win and lose elections, and no one is more invested in their personal economy than those living it.

So, out came the business people of this country with the dismay and anger that was richly deserved over a claim that, by the time she turned up on this show yesterday, when challenged she couldn't back up.

The economy is not back to level 1, and highly likely it won't be for several reasons. The wage subsidy is running out, government support is tailing off, and given we now bounce in and out of various forms of invented levels, confidence is trashed. As a result, we won't be spending like we used to, even those that can.

And we have those who can't spend, because they lost work. That number continues to grow daily. Not by the record breaking amounts of the early level 4 days, but it grows every day nevertheless.

Today's PREFU, the fiscal update, will tell us just what a mess they’ve made of this economy. And then tomorrow the GDP figure will confirm it.

But the most dangerous thing you can do in politics, especially around an election, is pretend things are what they aren't. You can do it with future promises, who knew they were never building 100,000 houses.

But when you tell people whose lives have been upended that the bounce-back is on and spending is great, and you're standing behind your counter wondering where the people are, and how level 2.5 is no way to pay the bills, no amount of fairytales changes your reality.

Once again, the pulpit of truth was the podium of BS.

Mike Hosking is a political broadcaster on Newstalk ZB, who has hosted his number one breakfast show since 2008 - see HERE.


MikeV said...

Spot on. Let's hope the electorate see through the "Spin"

Maximillian said...

Mike is incorrect in saying, "Economies win and lose elections". If that were the case, why is the current Government rating so highly? Unfortunately, it's personality that wins elections. What else could explain the huge jump in support for the Labour party when its leadership changed from Little to Ardern? It certainly wasn't economic policy.

lee said...

How about a blanket AMNESTY for all in NZ. They are here to work and are scared of being traced and harrassed . Hence the reluctance to come forward for testing.

5th generation Kiwi said...

Unfortunately the great proportion of unenlightened, dumbed down Kiwis who think our belovered leader can walk on water still think she has saved thousands of lives, the country and us. We are a team of 5 million, all in this together., let's be kind to one another, let's keep moving ... has anyone checked that these slogans are straight out of the little red book. We get in this case what we vote for and I fear another 3 years is going to be cast upon us.

Mike L. said...

But will enough of the Cindy-supporting sheeple realise the truth in time for it to show on election day? That's the big question. I don't think that the Nats have yet shown enough ability to prove that they would do much better, but at least some of them have business experience. With some minor party assistance from ACT and New Conservatives, we might see a centre-right win to pull us out of the mire slowly. Even above that wished-for result, I dream of hearing that NZF and the Greens have expired, never to be in government again.

Geoff. said...

Sorry to say that the empathetic smile will prevail over economic common sense in this election and NZ taxpayers will be paying fro this mistake for many years to come. In three years Labour will have squandered any opportunity there may be for an early recovery, they will miss the "Stitch in time".
But who can blame Jacinda for riding her wave of popularity when it only increases her chances of being able to take her extreme left wing policies into the UN.
It must be terrible when you can't get the crowd to socially distance when you want to take a photo of yourself.

Anonymous said...

Time to stock up on waders, it looks like we'll be getting deeper in the doo-doo for the next 3 years.