Electronz - Issue 034 27 August 2001 Weekly International E-zine focussing on the New Economics ------------------------------------------------------------------- CONTENTS : [ 1 ] ROWBOTHAM IN GODZONE.. [ 2 ] REGINALD McKENNA ON CREDIT CREATION [ 3 ] ROGERNOMICS SELECTIVELY BENEFICIAL [ 4 ] QUESTIONS ABOUT NEW L. HUNTER BOOK ------------------------------------------------------------------- [ 1 ] ROWBOTHAM IN GODZONE.. Meetings at Waikato University on 23rd August and subsequent radio and TV interviews all evoked positive audience reactions. Report on full day of workshops at Auckland involving Deputy Mayor Bruce Hucker, Professor Kelsey and others is not yet in. Monday 27th - Wellington. Tonight is the debate at Wellington's Victoria University on the question of whether NZ Treasury should support most of our money supply being created by overseas banks. Venue is Students Assn Memorial Theatre. Wednesday 29th - Christchurch. Michael Rowbotham will be Guest Speaker. Other well-known participants are Bill Rosenburg, and also Stephnie de Ruyter who accompanied Rowbotham on his recent Australian tour. Venue is Knox Centre, 28 Beasley Avenue. Christchurch contact is Allan Cookson (03) 312 4057 or mailto:asimeo@paradise.net.nz ============================================= [ 2 ] REGINALD McKENNA ON CREDIT CREATION With a public debate taking place in Wellington at Victoria University tonight on the subject of credit creation by the private commercial banks it is relevant to note what people on the inside have publicly said on the subject, without ever being challenged. One of these was the late Reginald McKenna, among other qualifications being a Director of the Bank of England and the Midland Bank. One of his statements ran: "I am afraid the general public would not like to learn that banks create and destroy money. Those who control the credit of the nation, hold in the hollow of their hands the destiny of the people". Another Bank of England Director and respected statesman put the issue and consequences of credit creation by non-government institutions even more forcefully with this choice: "If you want to become slaves, and pay the costs of your own slavery, let the banks create money". [Quotes from 'Economic Reform' No 11, Vol11; William Krehm] Could we imagine a situation in which officers of our own Reserve Bank (100% state owned) would publicly defend existing banking arrangements in which overseas banks continue to enjoy the privilege of creating most of Godzones money supply? We might have to at the above debate. ============================================= [ 3 ] ROGERNOMICS SELECTIVELY BENEFICIAL Professor Jane Kelsey deserves a bouquet for her thoroughly documented and revealing book 'Reclaiming The Future' which should be course material for all institutions responsible for teaching Modern History, Socio-Economics, or whatever is its current label. Unlike the authors who try and support status quo policies driven by 'market models' and that sort of jargon (which can only be justified by inferred benefits from fashionable conformity with expert advice) Kelsey brings together most relevant data and then fires the statistics like bullets. Anyone who can't see them hitting the target is either dumb or ideologically blinded. Take the discussion of the 5 yearly Statistical Report on NZ covering 1991-96, from page 368, to see how full flight Rogernomics was changing Godzone's income profiles. Bill English, then Minister of Finance, inferred the report was complimentary because he claimed that the diverging 'income disparities' were less than the previous 5 years when the extreme right Labour Government was introducing Rogernomics. While accepting the validity of that criticism should still see Roger's cohorts blushing, the National record in statistical terms is still a damning one. Between 1991 and 96, average household income for the top 10% rose by over $2,000 per annum, from $121,500 up to $134,100, while the average non-Maori income rose by a tiny fraction of that amount, in the longer 10 year period to 1996. That is shocking enough, and clearly shows that the only income sector group which derived benefit from Rogernomics were the country's wealthiest 10%, and the existing disparity between income groups continued to expand rapidly under the National Government. But the hardest hit people by far were Maori. In the Labour period up to 1991 their incomes fell from $16,800 down to only $11,900, and in the next 5 years of National slightly improved to 14,400. Looking at these figures again makes it remarkable that Maori can still put any trust at all in Labour politicians, especially as many of those in the 1984-90 Government when Maori incomes were slashed to only about half the NZ average are still inside, or on the outside, like David Caygill, advising the current Labour Coalition. While one does not say that forcing whole population sectors to exist on dramaticly lower incomes than others, or the national average justifies crime and anti-social behaviour, no-one with the interests of community and country at heart can ignore the consistent correlation between those mammoth problems and income deprivation. At the very least these statistics should stimulate consideration of how soon the diseased carcase of Rogernomics should be incinerated and the remaining supporters of the Washington Consensus carted off to a Sanitorium for decontamination. ============================================= [ 4 ] QUESTIONS ABOUT NEW L. HUNTER BOOK Publicity about another book written by Les W Hunter soon to come off the press, and ostensibly providing a fresh understanding of economics, makes us nervous. But not only because his first one (which was supposed to see the A+B theorem superseded by X+Y) failed to keep anyone we know awake past page 40, but because recent statements attributed to the author suggest he is sometimes confused between facts and banking mythology. For someone claiming to be a finance spokesman for the Social Credit Party when it peaked at 31.6% support (1980-81) in public opinion polls this is surprising. (Yes, for a few months in that period the Social Credit Party ranked as New Zealand's second top political party behind only the National Government. Ed.) Is the author serious when he claims, in criticising the NZ Post Kiwi Bank, that it must go on to the money markets and borrow 'savings' to lend to borrowers? He also asserts that the Democrats should not support the new bank as a monetary reform proposal because it will not work. While this may be music to the ears of Act and National MPs it mimics the criticism of Abe Lincoln and his ground-breaking Greenbacks. Nearer to here and now, we see several Australian cities much smaller than Godzone with their own very healthy banks. It is also official that foreign banks took out of New Zealand in dividends just last year $1.4Billion; paid via our hard-earned, export based, overseas exchange. And it's no secret that when sell-out mania was at it's peak, the purchase by Westpac (previously Bank of NSW) of Waikato Trustbank resulted in the formation of the wealthiest Trust in the Waikato; just ahead of the Wel Energy Trust. To be hoped our reservations are groundless, but if and when Hunter's latest book hits our desk we will be delighted to review it - straight from the shoulder. ------------------------------------------------------------------- This is the 34th edition of Electronz. Thank you for your ongoing support. As always, your feedback is welcome and appreciated. Copyright Electronz, 2001 ------------------------------------------------------------------- ******