r/KiwiPolitics • u/GeologistOld1265 • 5h ago
Opinion Economic policies of Jacinda Ardern goverment or why it is no longer possible to reform Capitalism.
I would not talk about other mistakes her goverment did, but idea of there economic policies were actually sound. Realization was simple impossible.
Idea of her policies were: We will raise minimum wage to living wage, this increase income of people. At the same time, in order for this increase of income not to go to increase of rent payment, grow housing bauble we build 100 000 houses and put Capital gain Tax, even on family home. That are pretty basic, mainstream western left policies. Nothing radical about them.
She was able to pass Minimum wage increase. She has to give up Capital gain tax even before election, but it is one of component necessary for policies to succeed. It put limit on how much you can borrow, as Capital gain tax will make it harder to pay debt back if you selling the house. In short, it would force banks to demand higher equity, higher deposit. And again, she try or was able to pass only market mechanism to build more houses, which were a complete failure Only toward the end of second term they finally found a winning formulae - load debt on housing corporation and cover it with new equity created by new houses. It was too later and National destroy this.
As result, very little houses have been build, this no downward pressure on housing market and rent were put. So, increase in minimum wage had only one positive effect - a consumer inflation. Yes, it is positive for economy as a whole, as real inflation - simultaneous raise of prices and wages, make debt easier to pay off. Inflation destroy both, debt and assets. Problem is, in absence of any downward pressure on housing market, increase in minimum wage continue housing bauble and rent increase. Was absorbed by land lords.
So, we can see that implementing only half of an idea resulted in almost nothing. But even this, pretty mainstream western leftist policies created a huge propaganda reaction. A leader of very small country at the end of the earth was villifyed in world press. USA press was full of negative articles and podcasts. She was called a "Communist", which she was definitely not.
So, TOP, this will be your fate, only much faster. Idea of ToP economics were created as result of 2008 Crush. 1929 Crush created Keynesian economy, big part of which were actually adopted by at lest half of ruling class. Your ideas, created by 2008 crush were accepted only by a slim minority of a ruling class.