Economic Correction Needs Political Correction

20 October 2008 16:20:00

“The response of the mainstream political parties to the global economic crisis has been universally appalling,” says Libertarianz party leader Bernard Darnton. “First denial, then promises of deficit spending of both the type and degree that helped delay recovery from the Great Depression for more than a decade.”

“New Zealand just can’t afford this,” he says. “The scale of the market calamity is potentially the worst since the 1930s, and our own markets need to be as free as possible to allow us to respond, to correct, and to get back on our feet among the first of the recovering countries.”

“And let’s admit something right up front,” he says, “we’re not playing tiddlywinks here. Just like the rest of the world, New Zealand has no choice about the pain of the coming correction. Our only choice is whether the pain takes one year, or two, or ten. We either confront the task and endure one year of pain – like ripping off a band-aid, we can get it over with as quickly as possible – or we can try to fake reality and endure a whole decade of pain instead, just as Japan did in the nineties – the period they still call its ‘lost decade’.”

“Only Libertarianz appears to realise the scale of the crisis bearing down on us, and the reality of this fundamental alternative,” laments Darnton.

“This morning, Libertarianz finance spokesman J Darby released the first part of our plan outlining what government can do to prepare New Zealand to weather the crisis: the Stop-Spending-So-Goddamn-Much Plan. This afternoon,” says Darnton, “I’m announcing the crucial second part.”

“I call it the Get-The-Hell-Out-Of-The-Way Plan.”

“When market corrections bite, the most urgent pressure is on prices. We urgently need to remove all the handbrakes on markets correcting themselves — to slash away all the political barriers that stop prices dropping to meet the new market reality we all have to face: that things today aren’t worth anything like what they were yesterday.”

The most urgent of these barriers is the minimum-wage law, and all pro-union legislation. In time of recession when labour costs need to drop to meet falling demand and plummeting prices, laws that keep wages artificially high and that featherbed labour protectionists are a clear invitation to produce huge lines of unemployed and turn ‘recession’ into ‘depression’. “The necessary adjustment will be painful,” admits Darnton, “but if the correction is allowed to proceed across the board, other prices will drop commensurately so the pain need not be so great as you might imagine.”

The other matter of urgency is the removal of all the legislative restrictions that keep replacement housing prices high – so high now that most houses are now worth less than their replacement cost. These include all the green and gold-plated additions to the Building Act (which would have included the ban on decent showers) – which essentially means gutting it and going back to 1987. It includes removing the power of councils to collect exorbitant levies on new developments – which essentially means gutting the Local Government Act.

And it urgently includes removing all the well-documented restrictions on land supply that have pushed the cost of new housing up so high – and that means abolishing the Resource Management Act and sending council planners on a long holiday to their spiritual home: North Korea.

Once these are out of the way, removing the other barriers to prices dropping and businesses getting on with their business affordably should follow almost immediately – this means an urgent and immediate end to expensive “luxuries” such as GST, OSH, compulsory ACC levies and the Emissions Trading Scams of both major parties.

“Political correction like I’ve described above,” concludes Darnton, “is the necessary response to the much-needed economic correction. While other countries struggle to get their own tired economic vehicles into the pits, we’ll be back on the track and heading for the home straight. Only correction on this scale will allow struggling businesses to cope with the new economic reality, to ‘de-coke’ our clogged economic engine, and to set us back on the road to real recovery.”

“It’s enough to make you vote Libertarianz!”

For more information, see www.libertarianz.org.nz or contact:

Bernard Darnton
Libertarianz Leader
Phone: 021 324 466 / 04 586 2182
Email: [email protected]

Libertarianz – More Freedom, Less Government
www.lp.org.nz


Authorised by Robert Palmer, 10 Tui Glen Road, Birkenhead, Auckland, as demanded by Helen Clark, 4 Cromwell Street, Mt Eden, Auckland.