Romney - Tax Rates & Faith

In many ways Republican contender Mitt Romney reminds me of our current Prime Minister John Key. Romney may be many times wealthier than Key (Key however is a big fish in the New Zealand pond), but like Key he made his  money  trading. And as we know wealthy people must know about business and job creation? Like Key he has been a beneficiary of tax cuts to the rich. These tax cuts, often funded by massive state borrowing have seen a growing decline in real wages for ordinary people, while at the same time the super wealthy have seen their wealth dramatically increase. The logic behind this rising inequality is the belief that the super rich are drivers of growth.

Under reforms made by President George W. Bush, dividends, capital gains and other returns on investments Romney made as head of Bain Capital are subject to a marginal rate of 15 %, compared to 35 % for regular income above US$379,150. After Warren Buffett, the billionaire investor, complained that he paid a lower tax rate than his secretary, a so-called ‘‘Buffett Rule’’, closing the loophole, was proposed last year by President Barack Obama but is opposed by Republicans, including Romney.

In any event the incredibly wealthy Romney could potentially be a leader of the most powerful nation in the West. He is a devout Mormon and as such believes the following: The Book of Mormon is considered by the Church of Jesus Christ of Latter Day Saints to be a divinely inspired book of equal value to the Bible. Joseph Smith, founder of Mormonism, claimed that he was directed by an Angel to a hill near his home in which he found golden tablets containing the full text of the book. With the plates he found two objects called the Urim and Thummim which appear to have been like a pair of magical spectacles, which enabled him to translate the ancient writing on the gold tablets. Unfortunately, but conveniently for Smith after he finished his translation, he had to return both the spectacles and the plates to the Angel, so there is zip physical evidence that they ever existed.  Incidentally while America may have been the birthplace  of Joseph Smith, it was also the birthplace of P.T. Barnum,  who is credited with saying, "There's a sucker born every minute."

While Romney's Mormonism may be weird and does suggest that if one believes that one could believe anything, what causes more concern is his belief as an article of capitalist faith that if taxes are raised on the rich, job creation will stop.

Trouble is, sometimes the things that we "know" to be true are wrong. For the larger part of human history, for example, people believed that the sun circled the Earth with the earth being at the centre of the universe. It doesn’t, and it isn't. The conventional wisdom that the rich and businesses are our nation’s “job creators” is every bit as false.

You might be a very successful venture capitalist and help start a dozen companies and hire hundreds of staff. But if no one can afford to buy what you have to sell, your business will soon fail and all those jobs will evaporate.

You see ultimately rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the relationship between customers and businesses. Only consumers can set in motion the environment that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than Mitt Romney will ever will be.

True, one cannot have a dynamic and growing capitalist economy without entrepreneurs and investors. But without consumers, you can’t have entrepreneurs and investors. And the more we have consumers with lots of disposable income, the better businesses will do.

That’s why our current policies appear flawed. As in New Zealand we see in America  the middle class defending a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation. In the meanwhile while most of us are getting squeezed the rich get richer.

Since 1980, the share of the United States income for those in the top 0.1 percent has increased 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007, from 42 percent at the peak of U.S. productivity in the early 1960s, and about 30 percent during the expansion of the 1990s. In Romney's case, that meant that last year, he paid around a 15 percent rate on his eight-figure income.

One reason this policy is so wrong-headed is that there can never be enough of the superrich to power our economies. The annual earnings of people like Romney are hundreds, if not thousands, of times greater than those of the average American, but he does not buy hundreds or thousands of times more stuff. His family may own 15 cars, but you can be sure he won't own several thousand. He might own many trousers and shirts and may well buy more every years and like everyone else, he may go out to eat occasionally with friends and family.  The point being no matter how someone who is extremely wealthy, like Romney, spends their money they can never do do in a way that creates a significant  lift in job creation.

Ultimately wealthy businesspeople don’t create jobs. Middle-class consumers do, and when they thrive businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich. Yet Key and Romney favour a system that cements their own wealth at the expense of the majority. They do this as a concomitant of their belief that they alongside other members of the wealthy elite are the drivers of growth. In doing this they have forgotten that capitalists without customers are out of business.

To my mind while Romney may believe in some weird space Jesus and follow a religion founded by a snake oil salesman, it is more worrying that he believes that by virtue of being mega rich he should enjoy a favoured tax status compared with ordinary people. The issue here is not class envy, hating a rich person because they are rich, but class interests – cementing the advantages of the privileged over the rest. The problem is not personal, it's systemic. In the current climate, politics in the West appears largely controlled by wealthy people in business who decide which wealthy people in power they would like to tell poor people what they can't have because times are hard. While at the same time cementing class privilege for the wealthy because they are after all - the job creators, when this is patently not the case .

Cap'n Key and the Costa Concordia

The media in New Zealand are afflicted with a very bad dose of  the disease of unfounded admiration when it comes to John Key. Here is a man who earned his spurs as a senior manager at Merrill Lynch speculating on currencies in a way that contributed to the Global Financial Crisis.

When first campaigning for office Key suggested that the way forward for NZ was to copy the Celtic Tiger (this was in 2007, when the global slide was well under way), only for Ireland to be seen for what it really was - not so much tiger as neutered kitten who didn't go and hunt its prey as rather mew and eat from a bowl it is only now paying for.

When Key was opposition leader he used to slam Michael Cullen for running huge surpluses, when Dr Cullen said we needed a buffer for the down part of the cycle. When the global crisis hit, Finance Minister Bill English said it was lucky the books were in such good shape and we had no net debt. Since then he has gone on the biggest debt binge in history. Indeed Key first attacked Labour in 2008 for the bleed of Kiwi worker to Australia, our high unemployment, and for the level of poverty in New Zealand. In all these areas we are now worse off than we were under Labour.  


One of National's 'key' slogans in the 2008 campaign was  ‎"Balance the books sooner". Key told us "National is on track to get the Government’s books back to surplus by 2014/15".  Now in January Key admits what most of us knew - the claim was rubbish. Around 65 years ago Orwell wrote that "the great enemy of clear language is insincerity." When politicians make promises on hoardings that are insincere or make no meaningful sense then they remove from our democratic process the ability to choose between competing ideas and plans. National campaigned on a promise they knew they couldn't deliver on. Yet Key says, it is not his fault. Rather the problem lies with Christchurch and the Global Financial Crisis. There is only so long that people will put up with being told this. The Government will spend $18.5 billion more this year than it will bring in. Only half that deficit is caused by Christchurch. So when National says it stands for "less debt", it is making a statement that simply isn't true.

Under Key we have witnessed the steady march to New Zealand becoming a police state with the increasingly intrusive surveillance powers given to an increasing number of government departments to spy on us, the limiting of the right for citizens to elect trial by jury, the increasing power of the police to extract DNA from citizens, the loss of the right for many offences to elect counsel of choice, and the steady erosion of press freedom.  I first noticed this with Radio New Zealand's poodle like banning of Martin 'Bomber' Bradbury  from National Radio for committing the new blasphemy - doubting John Key's omniscience. Worse came with Key treating the Police as his personal goons when a journalist accidentally left his microphone on a table where the two Johns' were having their staged conversation at a carefully managed publicity stunt and inadvertently recored what the two men said. The Dear Leader was incensed - how dare this man record what he said in anadvertised publicity stunt! That Key reacted by attacking the journo and calling in the Police like his private goons to muscle in on the media to gag what was recorded was gravely worrying. The tapes have now been leaked yet to my mind it was how Key reacted to the tea tapes tells us more about Key the man, than any actual content.

Then there is National's political patronage in appointing Stephen McElrea, Key's electorate chairman to the board of NZ on Air. The same body now worrying about programmes during election time being politically neutral (this was following TV3 broadcasting a documentary abour child poverty in New Zealand the week before the election. It is weird that informed programming about issues relevant to where our society is heading should be swept under the carpet during an election period when as voters we are asked to vote on where our society is heading. 

It is shameful that under National we have sunk another 5 places in the international register of media freedom, the press freedom index. National has nothing but contempt for human rights. We saw this with the Search and Surveillance Bill, the removing of access to Court for dismissed workers with the 90 Day Fire at Will law, and now they are allowing a totalitarian single party state that executes more of its citizens than any other country and is infamous for its arrests of artists, dissidents and religious worshippers to own a sizable chunk of New Zealand.

New Zealand is demonstrably worse off under Cap'n Key, than before he took the helm. Like the Italian captain of that ill fated liner the Costa Concordia, he will be one of the first to jump ship and bugger off when he steers the ship of state onto the rocks of depression and despair. You can bet your last dollar, Cap'n Key won't be hanging around when the band strikes up, "Abide With Me" as New Zealand and all who sail on her sink beneath the waves.

Farewell 2011

Well 2011 has come and now it has gone. Key's strategy of timing the election to coincide with the Rugby World Cup worked and analysis of the dire straits our economy is actually in, were pushed to the back pages of our dailies as stories of rugby teams and our collective fascination with odd shaped balls and cauliflower ears took over.

The year ends with the country in a worse state than Treasury forecast. Worse is to come, as 2012 slides towards the second recession in three years. Virtually everything the Key government has done has made matters worse. In reality Key promises much but delivers little, he is a comfortable opportunist possessed of an affable shallow charm and a fecal version of the midas touch.

While Key soft peddles on green values, he is certainly in to recycling. We are seeing a recycling of old ideas - charter schools - the putting of state education out for tender to the private sector, privatisation of prisons, benefit cuts, cuts to the public service, deregulation and tax cuts for the rich. Now the greatest piece of recycling - the privatisation of state assets. All of this with the aim of narrowing the wage gap with Australia and reversing the decline of our economy. It appears that Captain Key's plan for New Zealand not being wrecked by the iceberg of the global recession, is rather than steering around the iceberg, is to steer full steam ahead onto it.

What we can expect is for things for the bulk of New Zealanders to get worse. But will our mainstream media pick it up? As our SOE's are privatised, expect the cost of power to go up. As people have less money in their pockets, they will have less money to spend and businesses will go bust. Expect more diversionary policies - going hard on crime (ooh look shop lifters might be stealing food, but we've increased the penalties for theft) etc, etc. In other words going hard on the effects of poverty - not preventing poverty itself. The OECD's latest report on rising inequality finds the bottom 30% with just 3% of our wealth, while the top third commands 75%. With money comes the power to sway governments to protect tax privileges and loopholes. Notice how Key whined about poverty and inequality when first campaigning for office in 2007-2008, but this year both he and his poodle media were practically silent on it. In reality under Key the richest people in NZ increased their wealth by 20% over the past year, to $45.2 billion. That translates to an amazing 35% of NZ’s yearly GDP owned by 150 people. But we didn’t have 20% economic growth in 2010. We didn’t even have 2% growth. There will be more poverty and even more children will face hunger, poor housing and the health effects that flow from this.

While domestic violence is on the increase as are the sizes of queues outside foodbanks, Key like a modern Ceasar used the distraction of the rugby Colosseum, to distract people from the fact that New Zealand is on life support, and that in reality the only people to benefit under National are people like Key himself. With the smokescreen of rugby New Zealanders were seduced into the fact that National were actually doing something for New Zealand.

Not only has National presided over the sale of our state assets, they have also eroded many of our civil liberties and free trial rights. It was repugnant to witness a government almost dispose of our cherished right to silence without demur. We have lost the right to counsel of choice for many charges (a strange contradiction for a party that prides itself on the right of people to choose)and we have lost the right to elect trial by jury for a number of offences, all in the name of efficiency.

Weirdly we have also seen in 2011 amazing examples of "double speak" aka "pissing on our backs and telling us it's raining." Unemployment is a classic example. Key campaigned in 2008 about reducing unemployment (it has grown from 95,000 to over 157,000), narrowing the wage gap with Australia (it has grown not reduced). Key chided Labour for the fact that 33,000 people had left our shores for Australia, yet under his leadership that figure has now grown to over 100,000. In addition we now have over 200,000 children living in poverty. On the 3rd of November 2011 Key declared that an increase in unemployment was proof that National’s policies were working. I quote from the Herald:

“Prime Minister John Key has reacted to unemployment figures released this morning, saying more people are seeking work, and "confidence is coming back".
The figures showed the jobless rate unexpectedly rose in the third quarter, with little evidence the start of the Rugby World Cup drove an increase in casual workers to service the wave of tourists.
The unemployment rate rose to 6.6 per cent in the three months ended September 30 from 6.5 per cent in the June quarter, according to Statistics New Zealand's Household Labour Force Survey.”

"More people are seeking work" and this is good? What planet is he on? The only reason more people are now seeking work, is that more people are out of work!

One of the most prescient moments for me came when I was in Dannevirke several days out from the election. I was having a pie at a cafe. The owner came over and started talking to me. "Labour hasn't got a chance" he said. "Why do you say that? We have plans for the future, national super is unaffordable in the long term and only Labour is planning for that. What about capital gains tax and the need to broaden our tax base? Labour has plans our long term future, National has nothing." The shop keeper's eye glazed over, "Yeah, but John Key knows what he's doing, he's a millionaire." "True", I said, "But are you saying that because he has lot's of money, he know's how to handle an economy?" "Yep" came the reply. "So", I said, "You'd vote for Bernie Madoff the billionaire fraudster?" Again the eyes glazed over, "Yeah but Key's a millionaire."

I tried another strategy, "How's your business going?" It turns out that this man's business was in the crap and he closes shop for several months of the year and props it up by working in the mines in Australia. "Doesn't that tell you something - if your local economy is so stuffed, that you have to find work in another country to prop up your business?" Again it was to no effect. Effectively this individual had been subjected to a charm offensive from a political party promoting a brand based upon a man as opposed to policies and for 3 years there has been minimal challenge in the media to that brand.

So 2011 for me represents the apotheosis of a failed capitalism that is eating itself. We are in the shit because of the free market and the lack of regulation of the international banking sector. A compliant media owned by large corporate interests have feted as our economic messiah a millionaire who made his money feeding off the extravagance of the very sector that dropped us into the shit in the first place.

2012 is the year of the Winter Olympics. Key should lead a New Zealand tabogganing team - his ability to drive New Zealand downhill at speed, must mean we have a sure chance of a gold.

Charter Schools - The Education of Children Used As Deal Maker

Former National cabinet minister, new Act member and sole ACT MP John Banks has won a concession that John Key will allow some New Zealand children to be subjected to the charter school experiment as part of his deal to assist National with its programme of forcing a free market agenda upon New Zealand.

Considering neither National or ACT campaigned on charter schools a number of people are asking, "What are charter schools and do they work?"

Worryingly I have just heard the Prime Minister on Radio New Zealand respond to a journalist's question about not putting this before the electorate, with words to the effect, "Well do you think that the average voter will actually care if with all the hundreds of state schools in New Zealand, if we make a couple of them charter schools?" To my mind this speaks of an callous indifference to the welfare of the children he is subjecting to being John Banks' guinea pigs.

First charter schools are publicly-funded private schools. They are primary or secondary schools that receive public money but are not subject to some of the rules, regulations, and statutes that apply to other public schools in exchange for some type of accountability for producing certain results, which are set forth in each school's charter.

Do they work? From my reading of evaluation research and several articles I believe that charter schools don't outperform public schools in any meaningful way. Interestingly the New Zealand Business Roundtable has a link on its website to this article which summarises the research concisely: "The evaluation by the School Choice Demonstration Project, a national research group that matched more than 3,000 students from the choice program and from regular public schools, found that pupils in the choice program generally had “achievement growth rates that are comparable” to similar Milwaukee public-school students. This is just one of several evaluations of school choice programs that have failed to show major improvements in test scores, but the size and age of the Milwaukee program, combined with the rigor of the study, make these results hard to explain away."(Charles Murray, Perspectives: Issue 368 Why Charter Schools Fail the Test, 19 May 2010).

There seems to be a preoccupation with testing in charter schools. That is as success is measured by children meeting predetermined test markers, processes are put in place to ensure the schools accept only those children who will perform. This has led to allegations of "cherry picking."

Ross Barkan on 21 July 2011 wrote an article highlighting several problems entitled, "Bronx Charter School's Failure Highlights Failure of Charter Schools": "As a charter school, Academic Leadership is required by New York state law to admit students through a random lottery. But multiple parents and staff members described a process designed by the school’s director to weed out low-performing students.

Four parents who tried to enroll their children at Academic Leadership, an elementary school, this year or last year said that school employees tested their children before deciding whether or not to accept them."

This article reveals several of the problems inherent in the charter-school model. One is that a randomised lottery is supposed to determine who goes to a charter school. Since when did access to education become a game of chance? One might think that lotteries, at least, must be fair, but why should the educational futures of small children — who already hail from the economic underclass because wealthier areas tend to keep charters out of their school districts—now hang in the balance of one right or wrong selection from lottery box?

Further, the state school system is already struggling. Now it appears that state schools who take allcomers regardless of ability - to give them their entitlement - a free education; are going to have precious funds siphoned away to fund charter schools when the international research shows that despite promising much in fact deliver little.

Earlier this year John Key announced in a public meeting in Masterton that funding was going to be cut for the Wairarapa's flagship last chance school Ohorere Student Transition Programme. That school has a proven track record with an 85 percent success rate at taking troubled young children and getting back on track to return to and complete mainstream education. It cost just $150,000 a year to run (the same prices as 10 minutes of fireworks used to open the Rugby World Cup). It has ERO report after ERO report congratulating the school on its success. It is shameful that a school which has a proven record of success with some of the children from the poorest levels of our communities, is going to be binned when Mr Key can find millions of dollars to plough into charter schools, just to make a deal with a former National Party cabinet minister, when the bulk of research suggests charter schools are a failure.

ASSET SALES IN A BEAR MARKET?

There has been a lot of heat generated in the debate over asset sales. ACT claims the assets are underperforming and need the discipline of the market. Key claims we need to sell a share of the assets to “balance the books faster.” Brent Sheather is an Auckland-based authorised financial adviser who has analysed the logic of National’s proposed partial sale of state assets and finds it wanting.

National’s sweetener is that part of the money from the sales will be used for schools, and hospitals etc:

“The spin is that if we sell up to 49 per cent of each of Meridian, Mighty River Power, Genesis Energy and Solid Energy, and part of the Government's 75 per cent stake in Air New Zealand, this will produce cash for an investment fund to buy schools, hospitals and fund transport projects.”

Sheather explains why some big hitters in the finance world either support asset sales, or are keeping quiet:

“But don't expect too much negative comment, because many people stand to benefit from these transactions. The management and/or directors of the privatised companies will be looking for share options that will massively reward them if the companies do well.”

Duncan Garner comments on the same point on the TV3 site, “But at Treasury the process has already begun – an Australian investment bank Lazard has been hired to prep their sale before voters have their say.
Labour has estimated Lazard will be paid a fee of around $100 million for their troubles. As Phil Goff puts it, “It’s a bloody rip off - $100 million to line the pockets of Aussie banks,” That’s money we should be keeping in New Zealand.”

Let’s deal with the ACT argument that the SOEs are underperforming dogs (admittedly this was came from the ACT Wairarapa candidate). If that was the case why is Key spinning the deal as being a great for “Mum n Dad” investors to plough their retirement savings into?

On another level, the assets sales don’t make economic sense. Sheather contrasts the two ways governments raise money – selling something or issuing debt.

“Let's look first at the economics. A government can raise money by selling assets or issuing debt. The price we get for assets versus the cost of borrowing the same amount is a good place to inform a view as to whether we sell or hold.
The secondary market in 10-year government bonds prices them to yield 4.4 per cent. The yield on five-year government bonds is just 4 per cent. To get these asset sales, the Government will need to price the companies at price-earnings multiples of somewhere around 14 to 16 times, which implies after-tax earnings yields of 6 to 7 per cent.
In lay terms, that means the Government is proposing to sell assets producing returns of at least 6 to 7 per cent a year after tax plus growth, when it could issue debt costing just 4 to 4.4 per cent. On the face of it, this doesn't look particularly bright, does it?”

In other words, National wants to flog off assets that provide a positive long term return, when short term capital expenditure can be funded from borrowing easily serviced from the profit generated from dividends. Make no mistake about it, SOEs have been a brilliant investment and what’s more they are owned by all of us:

“In terms of historical performance, the SOEs have been a good investment - Treasury reckons they have returned 17.5 per cent a year during the past five years. From a financial perspective, selling state assets is not a no-brainer. The real tragedy of these asset sales is that the average New Zealander will see his or her equity in these great assets reduced. At the moment, every New Zealander, rich or poor, young or old, has an equal shareholding in the assets proposed to be sold.”

So once these assets are sold, the wealth of some New Zealanders will increase and more of us will be poorer. This will hit home as the new boards begin to work to increase profits for the investors. Power prices will rise as this is the easiest way to bump up profits:

“While many individuals will buy shares in the new companies either directly or via their Superannuation or KiwiSaver Fund, there will be a much larger number of less well-off New Zealanders and young New Zealanders who won't be able to participate in any way, shape or form.
This sad situation will probably be compounded by the new "private enterprise model and strategy" implemented by the new boards of directors of the privatised assets, which is frequently spin for putting up prices and restructuring the balance sheet to increase borrowings. These two factors mean that, unfortunately, the rich will get richer and the poor will get poorer.
The only rationale for these transactions that might have some validity is that private ownership could introduce a higher level of efficiency into these state-owned enterprises. But is it realistic to think that the current directors and management of Meridian, Mighty River and Genesis are asleep at the wheel?”

The other question is why the hell are we selling our blue chip investments in the middle of a market slump? So when the market is at its lowest we are pitching our most valuable assets. It is bad business to sell at a low point in the market. I thought even Key would know that? It is highly likely that the old mistakes of the past are going to be repeated:

“Furthermore, all of the above assumes the mistakes of the past will not be repeated. New Zealand governments have a long and consistent history of selling assets at low prices to the private sector. Contact and NZ Rail are a couple of examples. How confident can we be they will get the pricing right here?”

Sadly we can’t trust Key that asset sales will stop with the power companies, Solid Energy and our airline. With Key you need to read the fine print printed on the back of the contract. As Garner sceptically quotes Key, “If we are the Government for the next three years and the process goes well, then we’re not in a position to say what we will campaign on in 2014 – we will cross that bridge if we ever come to it.”

KEY - INCREASE IN UNEMPLOYMENT SIGN OF SUCCESS

The other day John Key mocked Phil Goff over his costings with taunts of “show me the money.” Today Labour has released its costings. National will no doubt try and confuse matters. But one thing, as I demonstrated yesterday is that Key is dodgy with his own use of figures.

What cannot be disputed is that Key campaigned last election about reducing unemployment (it has grown from 95,000 to over 157,000), narrowing the wage gap with Australia (it has grown not reduced). Key chided Labour for the fact that 33,000 people had left our shores for Australia, yet under his leadership that figure has now grown to over 100,000. In addition we now have over 200,000 children living in poverty.

Meanwhile we have Key’s big idea from the 2009 jobs summit of building a national cycleway that would create some 4000 jobs. Aside from the interesting contradiction in using public spending to reduce unemployment (a contradiction because Key is actually reducing public sector jobs to increase unemployment), the actual number of jobs created by the cycleway is only 120.

As Phil Goff remarked today with the release of Labour’s figures, “show me the jobs!”

On the 3rd of November Key’s pronouncement about an increase in unemployment being proof that National’s policies are working was incredible. I quote from the Herald:

“Prime Minister John Key has reacted to unemployment figures released this morning, saying more people are seeking work, and "confidence is coming back".
The figures showed the jobless rate unexpectedly rose in the third quarter, with little evidence the start of the Rugby World Cup drove an increase in casual workers to service the wave of tourists.
The unemployment rate rose to 6.6 per cent in the three months ended September 30 from 6.5 per cent in the June quarter, according to Statistics New Zealand's Household Labour Force Survey.”

"More people are seeking work" and this is good? What planet is he on? The only reason more people are now seeking work, is that more people are out of work! This is weird it is like a cancer specialist telling a patient to relax because "relapse" means that they are cured. We would think the doctor was mad and change our specialist. Likewise with lunacy like Key’s, that an increase in unemployment shows the economy is on the up, New Zealanders should be waking up to the fact that it is time to change our Government as this current lot are out of touch and bereft of ideas.

The Second Leaders Debate

I smiled at watching John Key trying to get one over Phil Goff during the second leaders debate, with his shrill taunts, of, “show me the money, son!” He came across as an out of touch school bully who had lost the intellectual argument and reverted to shouting 'son' and 'show us the money'. Let us not forget that Key largely gained his experience at the now defunct Merrill Lynch, an investment business that went under through dodgy management from which fold Key was recruited into National. His so-called skill can be seen from his adding up in the Christchurch debate. $1.3 billion a year for 4 years is $5.2 billion not $6 billion (as claimed by Key) and over the previous three days his claims that Labour will increase debt have gone from $17 to $16 and last night $14 billion and all of this is done with double counting. Key adds in the projected short-term gain from asset sales to the cost of tax cuts. This is artifice they are two different things.

Key is claiming that not selling off assets will run up debt, this is a myth. Keeping the assets and the dividend they bring will help pay off debt and in the long run generate greater returns. Goff and Labour seem to have costed their policies to me, increase tax on those in the best position to pay more and introduce a Capital Gains Tax, which will over a period of time bring in billions.

I would rather have a long-term vision for New Zealand rather than short-termism from Key whose theory that tax cuts for the wealthy and cutting Government spending encourages growth has been rubbished by top experts. When President Obama uttered this mantra, the comments drew a rebuke from Nobel Prize-winning economist Paul Krugman, who said in a Web posting that Obama was embracing “the myth of expansionary austerity and the confidence fairy.” So here we go with Key, a brighter future consisting of shonky maths, and optimism sustained by myths and manipulation.