If you’ve ever wondered why New Zealand seems to have endless economic problems, why our standard of living is considerably lower than it used to be or why it never seems to improve, the answer lies in an act of economic sabotage from which the country has never recovered: in July 1975, the Kiwi dollar was devalued and not just devalued but taken to with a jolly great axe.
Click to view
The period before the 1975 devaluation and through to the present day. The BFD.
Prior to that, as the graph shows, New Zealanders were buying things with a dollar that was quite valuable – more valuable than a US dollar. This is why our living standard was high; this is why when you were a younger man you seemed more prosperous than today. Then, in a moment of drunken madness, New Zealanders elected the Kirk government. They promptly set about punishing the population for keeping them in opposition for decades, and did so without hesitation or restraint.
The king hit was the 1975 devaluation; the graph shows that ever since we’ve been buying stuff with increasingly less valuable wampum. Even in good times the dollar you handed over to the grocer 50 years ago isn’t the dollar of today. Be under no doubts – it was done deliberately by people who knew exactly what they were doing! It was done to punish.
Part of the con game to make this plausible, and I suspect you’ve swallowed this twaddle whole like everybody else, is the old line that goes ‘devaluing the currency makes exporters more competitive on world markets’ (or words to that effect). Except it isn’t true (of course it isn’t: it’s illogical and preposterous). A few questions get raised about this claim:
1. So why isn’t Zimbabwe a rich country?
2. And America a poor one?
3. Why do Australian companies export stuff to NZ?
4. Why do they sell something for $1 in Melbourne, but only 91 cents in Auckland?
5. If we made the Kiwi dollar worth five cents (perhaps renaming it the peso), would we suddenly become rich?
And when you call out economists or members of Parliament unthinkingly making such ludicrous (‘it helps exporters’) claims, they get all frustrated and foot-stampy with you – sort of like a child learning to talk.
Anyhow, my point in all this is to say that almost nobody (except me) views Bob Tizard, the finance minister in 1975, as the wicked evil man he clearly was: our equivalent of Adolf, or Joe or Barack; evil men whose names endure as bywords for evil and national disgrace. Even as you read this you probably have a quizzical look on your face. Yet Mr Tizard is the reason you can’t make ends meet today, why living standards are lower and why we never overcome economic difficulties. He did more damage to New Zealand than the Emperor of Japan ever intended to do.
A classic case of what happens when there’s no truth eyeing you sideways or no one holding you to account. Sliding under the radar despite being the worst New Zealander who ever lived if you think of the damage done to the greatest number of people.
Capitalist is a simple country boy from the deep south who seeks nothing less than the destruction of socialism and collectivism in New Zealand. This article was first published HERE
Prior to that, as the graph shows, New Zealanders were buying things with a dollar that was quite valuable – more valuable than a US dollar. This is why our living standard was high; this is why when you were a younger man you seemed more prosperous than today. Then, in a moment of drunken madness, New Zealanders elected the Kirk government. They promptly set about punishing the population for keeping them in opposition for decades, and did so without hesitation or restraint.
The king hit was the 1975 devaluation; the graph shows that ever since we’ve been buying stuff with increasingly less valuable wampum. Even in good times the dollar you handed over to the grocer 50 years ago isn’t the dollar of today. Be under no doubts – it was done deliberately by people who knew exactly what they were doing! It was done to punish.
Part of the con game to make this plausible, and I suspect you’ve swallowed this twaddle whole like everybody else, is the old line that goes ‘devaluing the currency makes exporters more competitive on world markets’ (or words to that effect). Except it isn’t true (of course it isn’t: it’s illogical and preposterous). A few questions get raised about this claim:
1. So why isn’t Zimbabwe a rich country?
2. And America a poor one?
3. Why do Australian companies export stuff to NZ?
4. Why do they sell something for $1 in Melbourne, but only 91 cents in Auckland?
5. If we made the Kiwi dollar worth five cents (perhaps renaming it the peso), would we suddenly become rich?
And when you call out economists or members of Parliament unthinkingly making such ludicrous (‘it helps exporters’) claims, they get all frustrated and foot-stampy with you – sort of like a child learning to talk.
Anyhow, my point in all this is to say that almost nobody (except me) views Bob Tizard, the finance minister in 1975, as the wicked evil man he clearly was: our equivalent of Adolf, or Joe or Barack; evil men whose names endure as bywords for evil and national disgrace. Even as you read this you probably have a quizzical look on your face. Yet Mr Tizard is the reason you can’t make ends meet today, why living standards are lower and why we never overcome economic difficulties. He did more damage to New Zealand than the Emperor of Japan ever intended to do.
A classic case of what happens when there’s no truth eyeing you sideways or no one holding you to account. Sliding under the radar despite being the worst New Zealander who ever lived if you think of the damage done to the greatest number of people.
Capitalist is a simple country boy from the deep south who seeks nothing less than the destruction of socialism and collectivism in New Zealand. This article was first published HERE
3 comments:
Yes you make good fair points as usual cap. Didn't Muldoon devalue the dollar also? A little before my time these events but I'm aware of this ' tinkering' which does more harm than good for countries.
Kirk died in 1974.
Surely you mean the Wowling Government of '75?
How was the dollar devalued? Was it shifted to a floating rate from a fixed exchange rate?
Post a Comment
Thanks for engaging in the debate!
Because this is a public forum, we will only publish comments that are respectful and do NOT contain links to other sites. We appreciate your cooperation.