Thursday, September 27, 2012

Taking from the poor to give to the rich


Peter Cresswell gave some clear reasons why it is delusional as economic policy, I'd like to make it a lot simpler.

Devaluing the New Zealand dollar would be the government stealing from the poor to give to the rich.

How?  Because those who win are exporters and those who lose are people who save cash in the bank.

Those with modest savings, without stocks or shares, without the means or wherewithal to shift their money into foreign currencies, equities, gold or property, are the losers in any devaluation.

It debases the cash they hold, whether it be in banknotes or bank accounts.  It takes away from their ability to consume, to buy what they want if it comes from overseas or is dependent on imports as a major factor of production.

It means the poor will less be able to afford an overseas holiday.

It means the poor will less be able to buy a laptop or a games console or a new TV, or books that aren't printed in NZ.

It means the poor will have to drive less (not that the Greens give a damn about that)

The winners are farmers, vintners, hoteliers and moteliers, in essence those who own export oriented businesses (or in the tourism sector) who suddenly find they can undercut competitors in other countries (or in the case of tourism attract visitors).

That of course makes for another group of winners.  Foreign consumers of NZ goods and services.

Devaluation discounts the prices they pay, which of course is the opposite of what happens to the goods and services NZers buy from them.

So there you have it.  The Labour and Green Parties want to reward those who sell goods and services overseas and their foreign customers, by taking wealth directly from New Zealanders who import goods and services from overseas, and who undertake foreign travel.

If you have enough money, you can open foreign currency accounts, you can shift your depreciating NZ dollar into other assets or commodities, and protect yourself from this government endorsed theft by stealth.

However, if you're relatively poor, with savings largely sitting in a bank, you've had it.

That's from the parties who, like attention seeking poseurs, are pretending to live like poor people to highlight how tough poverty is. 

They want to take from the poor to give to the relatively well off. Why?  

Because their entire philosophy is to intervene, to do something, because they know better than the millions of people making individual decisions about what to buy and sell and at what prices, because they are uniquely blessed with greater knowledge, so they can debase the wealth of some to better others, so they look like they've done something good.

They're not.  They are ready to steal by stealth.  Don't let them.

1 comment:

Mark.V. said...

The Greens are opposed to the purchase by foreigners of New Zealand assets. It does not seem to have occured to them that by devaluing the New Zealand currency all New Zealand assets will become cheaper and more attractive overseas interests.