There’s been a bit of talk about New Zealand’s current account deficit lately e.g. (1), (2), (3) – probably because it looks like borrowing to fund the deficit is becoming much more difficult (The current account deficit is the difference between what the country earns from overseas and what it spends overseas).
New Zealand hasn’t had an annual current account surplus since 1973, and if we don’t turn things around soon it seems we may be back to the bad old days of Finance Ministers going cap-in-hand to the world’s financial centres to beg for loans, and/or facing a significant decline in the value of the New Zealand dollar. Being in such an indebted and vulnerable position undermines our economic sovereignty, as we can less and less afford to do anything that upsets our foreign moneylenders.
In the Kiwi summer DIY spirit I thought I’d offer a simple (some might even say simplistic) approach to tackling this problem…if we try it, it won’t happen overnight, but it will happen 🙂
We can see the gradually worsening trend in our current account easily if we look at a chart – this one uses data provided by the Reserve Bank.
Current Account as % GDP - New Zealand
Oil prices in recent times rose dizzyingly to all-time highs. In an intuitive way, the experience seemed to many to validate the notion of Peak-Oil. Then along came the credit-crunch and the global-financial-crisis, and oil prices have plunged dramatically. Does that mean Peak Oil is no longer a problem?
Well no. Peak oil is a consequence of geological realities, and oil prices are a manifestation of market forces. In themselves, rising oil prices didn’t ‘prove Peak Oil’ and falling oil prices don’t ‘disprove Peak Oil’.
The financial crisis which has unfolded this year has caused governments to release billions of dollars at short notice to prop up the financial system. One might wonder why such funds have never been available to alleviate poverty, cancel Third World debt, or take meaningful action on climate change. But we don’t wonder about such things, since we know the answer… governments are keen to protect ‘business as usual’ for the wealthy few, but they are far less keen to act to transform the lives of the poor or look to the long-term future of the biosphere.
Climate change is undoubtedly the most significant issue facing the planet right now. Human society must immediately begin rapid and radical alterations to the industrial and agricultural production systems causing much of the greenhouse gas emission that is driving this climate change. Yet we seem chronically (one might suggest criminally) unable to make the necessary transformation in the way we live. The best we can do – the EU’s much-trumpeted policy of 20% emissions reduction by 2020 – is ridiculously inadequate.
So what are our options?
Nearly a year ago David posted about Jack Harich’s paper: “The dueling loops of the political powerplace”. Harich suggested political competition could be likened to a race to the bottom versus a race to the top, in which the race to the bottom had an inherent advantage, namely: you can always lie bigger, but truth is constrained. Not a very cheery conclusion, but one that has some resonance when you look at the behaviour of many politicians.
Q: How do you know when a politician is lying?
A: Easy, it’s when their lips are moving.
All is not lost, though – Harich and the people at Thwink .org identified that the competitive advantage of deceitful politicians can be overcome if – a) if more voters are skilled at detecting political deception, and b) if this knowledge changes their political behaviour (i.e. they at least stop voting for the liars).
If you’re like me, the thoughts that pop into mind at this point are: “Brilliant! Now how do we do that?” Well, Thwink has now released a guide to some of the basics of detecting political deception.
Today (December 6) has been declared the International Day of Action on Climate Change; the day has been chosen as it falls midway through the UN climate change conference in Poznan, Poland. And so, while around 190 nations’ representatives prevaricate, numerous grassroots actions and events are taking place around the world as citizens express their concern about the growing impact of climate change.
Meanwhile, in a parallel universe, the new government of Aotearoa New Zealand is considering a parliamentary select committee review of the scientific evidence around whether any human-induced climate change is actually taking place at all.