Don Brash's taskforce -- responsible for telling the government how to reduce the income gap between Kiwis and Australians by 2025 -- reported back today. The results aren't surprising:
1. Reduce Government operating spending to 29% of GDP by 2012/13 (it's currently around 36%)
2. Cap future spending to a pre-determined level set in the parliament and hold the government to that spending.
3. Establish "expert" taskforces to review each area of government spending.
4. Abolish KiwiSaver subsidies and progressively increase the age of eligibility for NZ Superannuation. Wrap up the Cullen Fund.
5. Abolish universal healthcare subsidies and provide for privatisation of the healthcare sector.
6. Reverse the "substantial" subsidies for early childhood education.
7. Abolish fee caps for university fees.
8. Introduce a flat tax.
9. Sell all state assets where those assets exist in a market where competition either already exists or is feasible.
10. Labour law should be amended to "strengthen" negotiating powers between employers and employees.
11. Restore the minimum wage to 1999 levels.
What a fucking surprise. A taskforce headed by Don Brash, avid disciple of neoliberal economists like Friedman and Greenspan, recommends gutting the state sector and regressing back to the dark days of "every man for himself".
Yeah these recommendations are almost as big a joke as the commission of the inquiry in the first place. Another big win for the national government.
For the record, though, Greenspan is probably the finest monetary leader in US history.
Don't agree with your assessment of Greenspan. He's shrewed - that much I'll give him - but I think the bow's being stretched a little too far to suggest he's their finest monetary leader. Although, having said all that, it's a pretty small pool of talent.
Greenspan's biggest problem was his ideological opposition to regulation of any kind whatsoever. That aversion allowed false markets to be created, with their profits guaranteed by other false markets. Take derivatives as but one example of this. In an unregulated market, speculators are able to leverage huge sums on the basis of a derivative profit that actually doesn't exist. OTC derivatives were almost single-handedly responsible for collapsing the American economy in the late 90s, post the dot com boom. Were it not for government intervention, the entire market would have fallen to pieces years before it eventually did.
Appearing before a Senate committee, Greenspan, shortly after resigning, admitted that his ideological drive had blinded him to the growing realities of a market hell-bent on profit at the expense of prudence. In short: he admitted he was wrong. The fact he was tacitly endorsed by, how many, four (?) presidents only illustrates his ability to con others and doesn't convince me he was anything other than irresponsible and kinda lucky. The scary thing is that his 'yes' men - Larry Summers, Tim Geithner, et al - are still considered financially literate by Obama and are still turned to for advice.
Greenspan was idealogically opposed to regulation, yes, but that didn't affect his performance as chairman of the Fed. He was in charge of monetary policy, meaning his job was to control inflation and control the money supply - he had nothing to do with regulation. He was not a legislator and not a politician. Also, he "admission" you refer to wasn't him admitting he was wrong, rather admitting his flawed idealogy. Again, that had little to do with his role as chairman of the Fed.
Also, I seriously question your assertion that derivatives were the cause of the 90's boom - and it was leveraged speculation, not derivatives, that caused the dot com boom. Derivatives can't really create an economic crisis on their own - sure they contributed by destabilising the financial sector, but to say that OTC derivatives are responsible for economic collapse is dishonest.
I don't think it's "dishonest" to say OTC derivatives were responsible for the bust of both the 90s and 00s booms. And besides, in fairness, I said "OTC derivatives were almost single-handedly responsible for collapsing the American economy in the late 90s".
This is from The Economist:
And to say Greenspan wasn't resposible for regulation is to turn a blind eye to the incredible influence he held throughout his time in office. I'm sorry, it might not have said "be responsible for regulating markets" in his formal job description, but when he sneezed, presidents listened.
To continue my rant on derivatives, he was responsible for forcing Brooksley Born out of her role as chairwomen of the CFTC when she proposed regulation of the derivatives market.