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Alex Tarrant asks what on earth does the Reserve Bank have to do with any of the 'injustices' the Occupy Wellington protesters are angry about?

Alex Tarrant asks what on earth does the Reserve Bank have to do with any of the 'injustices' the Occupy Wellington protesters are angry about?

By Alex Tarrant

We've all been watching the Occupy Wall Street protests with growing interest as more 'mainstream' Americans join in with the protests at Wall Street's bailouts.

The US is pretty stuffed, as these 40 charts from Business Insider highlight. It therefore wasn't surprising more 'Occupy' events sprung up across the States.

Now they have spread around the world, including to our little patch down here.

Occupy Wellington is being held on Saturday in the Civic Square. Fair enough. It's a nice place to have a sit-in, you'll be seen, you'll be heard.

But it's not just Civic Square that will be occupied in Wellington. They're also going to Occupy The Terrace at the Reserve Bank of New Zealand (number 2 The Terrace) from November the 5th until the 30th.

Seeing as they were obviously directing some of their anger at the Reserve Bank's actions, I decided to log on to the group's facebook page to see what they were all about and what they were standing for.

I thought perhaps they weren't happy with the current interest rate settings or that the macro-prudential tools the RBNZ is considering weren't up to scratch. Hey, perhaps they thought the Reserve Bank should be doing more to tell the banks off about their lending practices, profit margins or treatment of workers (which could easily be argued as a very valid injustice). 

So I thought I'd find out. The facebook page began:

This is the Wellington extension of the global movement that started with Occupy Wall St. We want a return to real democracy, a government by the people for the people & an economic system that works for 100% of the people.

From that introduction, I take it the call for a 'real democracy' is for one that's different from what we currently have (where everyone over 18 has the right to vote). They obviously want to change that for the better. (FYI they don't actually say how their 'real democracy' will differ from the current one, but perhaps you'll find out if you go down to the Civic Square tomorrow).

Secondly, seeing as they're calling for a government by the people and for the people, I take it they think our current system of government (with non-humans for Parliamentarians...?) isn't up to scratch. (Again they don't say how their version will differ from the status quo, so if I were you I'd head down to the protest if you're keen to find out).

Thirdly, they want an economic system that works for 100% of the people. They don't like our current economic model. Fair enough. That's what the people Occupying Wall Street are so angry about in the US, so it's fitting that our ones are angry about it too.

So why Occupy Wellington and the Reserve Bank?

Still not really informed still of why they want to occupy the Reserve Bank, I scrolled down the page to the Why Occupy Wellington description:

Because of Pike River mine disaster, because of legislation falsely passed under urgency without public due diligence, because of the way our elderly are treated, the way our physically disabled are treated, the way our mentally disabled are treated, the way victims of sexual assault are treated, because of our child poverty, because of the incredible and ever increasing divide between rich and poor in this country, because the TPPA will further disadvantage New Zealanders, because the Food bill will prevent us from growing and sharing food grown in our own gardens, because prisons have been privatised, because they are going to sell what few state owned assets we have remaining, because in 3 years we have got into more debt than we paid off in the previous 9 years, because our coast line is being sold off to oil companies that don't give a toss about our environment or our country, because we want to fight to regain 100% PURE NEW ZEALAND!

Yeah, they're pretty pissed off aren't they.

Problem is, none of the above has anything to do with the Reserve Bank or its responsibilities.

Any ideas?

Luckily for the Occupy Wellington group, I've stumbled on this misnomer in their protest plans before they were left red-faced yelling into megaphones (not the one's made by global corporates of course) at the wrong government agency. That was close eh.

And it doesn't require one to be a rocket scientist to figure out which government agency would be involved with at least some of those decisions outlined about. It seems the Occupy The Terrace group chose the wrong side of the Terrace to protest on.

The Treasury (the government's central policy agency) at number 1 The Terrace would be, in my humble opinion, a much better target for the group to camp outside and voice its protest at (I even think there's a nice grass patch there where they can pitch their tents and even plant a garden).

How about the US embassy...?

Oh now hey, that could be a good idea as well couldn't it? Let's see. The Occupy Wellington group is protesting in solidarity with the Occupy Wall Street protesters, who are unhappy with US financial institutions, governed by US laws and overseen by US regulators.

Maybe it's all a bit '2003' to protest outside the US embassy now? It just might not be cool any more. (Tip: There's even more green space by the US embassy than there is outside the Treasury).

What's the Reserve Bank got to do with this again?

So just in case the Occupy Wellington/The Terrace group still wants to target the Reserve Bank (but not over monetary policy, macro-prudential tools or forecasting), I'll leave it up to TVHE's Matt Nolan to have the last word on why this might not be the best choice of action:

Nothing sounds nobler than fighting against injustice for those that are oppressed.  And in truth, trying to make sure that people have an even playing field with which to take on life is one of the main justifications for government – hell it's part of the “social contract” that exists between us as individuals.

And on the face of it, these protests in the US have been trying to achieve that.  It is a fact that the incomes of many US citizens have stayed roughly unchanged, while the incomes of the most wealthy have increased – the disparity is not as severe as some of the numbers suggest (as there have been countervailing price changes), but it has happened.

People in the US are protesting because there seems to be no rhyme or reason to this change – furthermore, unemployment has been at 10% for a very long time, and all hope appears to be gone.  The fact that so much “corporate welfare” exists in the US is also very upsetting – as it should be.

But in NZ we haven’t had any of this – in fact incomes have risen sharply across the board, unemployment is still below the levels it was a decade ago (and employment rates are much higher), and we don’t have ridiculous corporate welfare policies.  We have great institutions – including the Reserve Bank – which have helped to ease the pain from the drastic global events on New Zealand.

… and yet the protesters are standing outside the very places that HELPED New Zealand during the crisis.  I’m not sure if this is because they don’t understand what is going on, or because they just think it’s a great way to get attention – but it is an extremely poor idea to protest there.

If you want to “show solidarity with the US”, do it at the US embassy – not in front of the very places that have helped all New Zealander’s out during a time of global crisis.

Solidarity comrade.

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42 Comments

Auckland getting under way this weekend Alex.

http://www.occupyauckland.org/

Good post scarfie !

ALEX, THAT WAS A TERRIBLE ARTICLE, SERIOUSLY, IT WAS LIKE I WAS READING SOMETHING FROM FOX NEWS OR SOMETHING!

THE PROTESTERS ARE PROTESTING AT PRECISELY THE CORRECT ADDRESS, THEY ARE PROTESTING THE FRAUDULENT BANKING SYSTEM!  

THE SYSTEM THAT SYPHONS WEALTH OFF WORKERS AND TRANSFERS IT TO THOSE CLOSE TO THE NEWLY CREATED MONEY.

ANY MENTION ABOUT THAT IN YOUR ARTICLE? CHRIST ALMIGHTY, HOW ABOUT BEING A LITTLE MORE OBJECTIVE.

SHEESH!

HOW ABOUT RESERCHING SOMETHING ABOUT THE CAUSES OF THE GLOBAL RESESSION AND HOW WE GOT TO THIS POINT AND WHERE THIS IS ALL HEADING AND WRITING ABOUT THAT!

 

lol. I can see the lefties and the lettuce heads working themselves up into a right moral orgasmic frenzy over this one. Oh how daring, how exciting. We're marching for real change in our general assembly! Let's take it all back! Viva la revolution! Viva la Social Networks!  I’ll see you on the streets!

Yawn. It seems that those who disdain America the most are copying it yet again. The times it would seem are not a changing.

Of course some of us had to put up with that same sh*t back in the 60s! It was BS back then too. What did happen was that many of those children of the revolution ended up forming the Clarke/Cullen Labour Govt. and look at what that did to us. I suggest y’all march on the Great Helmswomen, Chairman Helen Clarke's house instead.  

I’ve just read the website. Under the heading what will make the occupation AWESOME, in addition to musical instruments and art supplies and organic lentils, can I bring a four poster bed and chaise longue, and suitable attendants? I could then, possibly, be persuaded to come.

Back then everyone had jobs to go to and so got sucked back into the trap.

But I won't be making any predictions about this one.

The times it would seem are not a changing.

Dylan, saw him perform once.  And before that, I was even there for the Beatles first US live performance in Shea Stadium - just a primary school girl, mind.  But, I can say I was there throughout the 50s-60s.  Maybe you had to put up with shit in the 60s, David, but the street campaigners of those long, ugly decades changed the US - they ended apartheid in the country.  They ended the draft.  They made the established order think about whether shooting unarmed pregnant women and unarmed teenagers on university campuses was what America was really about. 

Yeah, life got less violent and more calm thereafter - and they mated, had kids and got sucked into the middle class.  But, it was a thriving middle class.  Not something we can say for today.

Maybe you had to put up with shit in the 60s, David, but the street campaigners of those long, ugly decades changed the US - they ended apartheid in the country.  They ended the draft.  They made the established order think about whether shooting unarmed pregnant women and unarmed teenagers on university campuses was what America was really about. 

You have encapsulated my point really nicely there Kate, when I say that as a New Zealander, I’m tired of foreign immigrants coming in to this country and projecting their battles from home on to us, and trying to change this country to their way of thinking when in actual fact those battles have absolutely nothing whatsoever to do with this country, or its history or its culture. It’s interesting that when I talked about the 60s you assumed I was talking about the United States. But you see, the shit I was talking about in the 60s, Kate, was the shit that went down here in New Zealand, which had nothing to do with shooting pregnant women and unarmed teenagers on university campuses, ending the draft, or telling people of African descent where they could pee and what part of the bus they could sit on. But then you wouldn’t know that would you, because you weren’t here.  

Damn the dams!

Alex - to you have any idea how much your generation has to suffer for the mismanagement of our economy by the government ? Please, bring on the real issues.

Here here.

 

ER ALEX! Where have you been?. They fell asleep at the wheel.  A consistent theme on this site has been the silly prices our houses sell for and the way the RBNZ has helped to create that situation. Yes, yes, the silly bunch of politicians also fed the beast but the RBNZ are not blameless.

Why did so many people lend money to the Finance Companies? Could it be that interest rates on bank deposits were so miserably low?

House prices exploded because of the credit boom which the RBNZ helped to engineer. There is a lot of good work the RBNZ do but that is what they are there for. Could have done better I think.

Alex, the tone of this entire article smacks of I went to college - you, didn't - eat that.

Genrally, Alex, the way I see it, the general public are coming to understand they're being screwed by a system much, much bigger than NZ - it's called globalisation, even if they haven't got that word for it.  

The worldwide Occupy 99% slogan lays testament to the fact that the group has this  knowledge - and our NZ Reserve Bank is at the core of NZ's representation and participation in that global system. 

We, the general public, don't need to know about "monetary policy, macro-prudential tools or forecasting " or even the difference between what the Treasury vs the RB do in the process of screwing us over.  Based on AB's salary figure alone - we get it.

So, I'd suggest you head down and occupy a seat on the pavement and just take in the learning experience associated with being a part of collective action and global solidarity.

PS - there are so many holes I could pick in Matt Nolan's article as well.

But, you're intelligent - you take it on - read it critically as they hopefully taught you to do at uni - you'll find the holes as well.

Alex

Sorry to be a bit self-serving here, but maybe the Occupy Wellington protestors could be directed to my recent interest.co.nz article,

http://www.interest.co.nz/opinion/56161/opinion-our-currency-being-debas...

and they can see that that the RBNZ buying gold is a way to free the RBNZ from the worlds' central bank excesses.

Then, as Roger says, they can focus on whatever home-grown issues they have with the RBNZ.

Regards, Philip

Philip, read the article - over my head to be honest. 

But, if the fundamental problem you are trying to solve is to (as you have stated above)  free the RBNZ from the worlds' central bank excesses  

As a student I would want to explore first principles - that being, why do we have a reserve bank?  What is its purpose?  And, could we achieve that purpose by decoupling ourselves from this system altogether?

No, controlling private debt would have kept us free, throw in staying clear of neo-classical laissez faire politics economics.....gold simply does not matter.

regards

sounds like Rent- a -  Mob  .  Are our cops allowed to use water cannon ?   have all the Wgtn cops gone to Auck etc ?

Minto & McCarten pulling the strings no doubt.......

The rage is spreading     www.occupyeketahuna.org

Now that is a classy number. Haha.

Knowledge is power. Information is power. But that knowledge and information needs to be truthful. The illlumnati are lying to the proletariat. A perfect example is the Stress Tests performed on the European Banks in July. They all passed. So the illuminati said. And lo-and-behold, the real truth is they didnt pass. But for two months the lies were propagated that everything was all right. Like all lies, it is important not to be caught out. And Dexia forgot the rules and forgot the script. And now they are carrying out "new" stress tests. WHAT? What was wrong with the first lot. They lied.

Go back and replay Bernard Hickey's interview of Allan Bollard. Watch carefully where he squibs it. Bernard put it up again.

There is only one person here on interest.co.nz who puts his finger on it, again and again and again. Except, lately, Bernard has told him to go and wash his mouth out. 

Slightly pedantic so apologies, but knowledge alone is not power.

Only knowledge applied can be powerful, knowledge ignore or unacted apon cannot be.

Were the differering views of the extention of the government guarantee to two of the finance companies, between the RBNZ and Treasury just that, differing views. Or was the RBNZ culpable by remaining silent?

@ Alex

I am reminded of the Wizard of OZ

Scarecrow: I haven’t got a brain… only straw. 
Dorothy: How can you talk if you haven’t got a brain? 
Scarecrow: I don’t know… But some people without brains do an awful lot of talking… don’t they?  

Is there any analysis on what would have happened in the NZ economy if the US Federal Reserve hadn't extended swap lines to NZ during the crisis?

I'm refering to the ones Alan Grayson brought up in a committee meeting.

http://www.youtube.com/watch?v=n0NYBTkE1yQ

(from 2min:27sec)

Incredible video. Thanks robby217. Ben's helicopter in action. 

We have a reserve bank that only does half a job, ie. helping trading banks meet thier reserve requirements.  Both parties insist upon borrowing money from the worlds 1% instead of directly borrowing from our government owned Reserve Bank.  In America the govt can borrow from their reserve bank, but the Fed is a privately owned coorporation.  We could do the same here with a state owned reserve bank.  Nobody with an ounce of brains would say that paying interest in the Billions to the 1%'rs instead of our own bank is a good idea.  The money all comes from the same place ie. thin air.  How can we have a true democracy when we don't controll our own money supply?  This country is not run for the majority, it is run for the minority, and it is time for that s##t to stop. 

The reserve bank can only work within its mandate....we vote in the Govn....if the Reserve bank is only doing half its job then we as voters should be asking to change that.

Borrowng from the Reserve bank is QE'ing or money printing....the value of our currency and low cost of private borrowing depends on us constraining the money supply so confidence is not lost in us. So no, I dont agree with money printing the end result is far worse....

We have a true democracy within limits....we vote in the Govn who writes legislation which the likes of the RB obey.

While the size of the majority might indeed be questionable its better than most other options...like running it via committee.....who would you apoint? Lenin? we can see how that went.

regards

 

You raise a good point there, mist42nz. I do hope that the news media will ask the protestors that they talk to how they are funding themselves for the month, since they are not at work, and whether or not they are in receipt of a benefit. But somehow I doubt that they will.

This leads me to wonder how many sickness, DPB and unemployment beneficiaries are currently occupying Wall Street? Oh I think I know the answer to that. None! Because such tax payer funded redistributions of wealth don’t exist in America. And ironically isn’t that what the American’s, in part, are protesting over?

Meanwhile back in outrageously unequal New Zealand, Bradford, Minto and co ...............

Unemployed beneficeries occupying Wall Street well why not, there is no work after all.....perfectly legit why to reach the Govn and ask them to get tehir act together instead of supporting useless non-productive bankers....with billions.

regards

 

Wasting your breath on those two I suspect Iain. If people can't see the underlying discontent fueling varioius movements and protests, well good luck to them and the cosy little world they live in. Might not be so cosy for much longer, but it is human nature to cling on to hope that things won't change, in the face of overwhelming evidence that it is going to. No, just keep on bringing out the same old tired and thoughtless welfare bashing mantra. This sort of sorry human behaviour has always intrigued me. 

So true scarfie, so true.

I have caught you out before with your fallacious arguments. You were careful not to attack me personally this time, but you still make the same error.

Seems to me the core grievance is about what they DON'T WANT, but that one is lost on you.

Have you ever noticed that no one likes or replies to your posts? Ever considered the reason might be they are generally incomprehensible? Displays evidence of a mental disorder from my experience.

Quote from OWS "I believe we're f#####d either way, but at least this way we have a shot. http://www.youtube.com/watch?v=OwWInp75ua0 

 

Im glad its (OWS)  finally happening...the Tea Party was and is a sick joke.....here maybe finally we have real genuine protestors....

regards

 

A fantastic response to a really weird article. Was it a 'straw man' created simply to get people to respond. I cannot believe that he actually believes what he wrote.

Maybe lets start with What the Reserve bank really is.

Is it democratic- no, it is 'independent'. What that actually means is that it is independent of us. the people, we cannot be trusted, only an unelected elite is clever enough to run the Reserve Bank.

 

What has it done.

What has it done with it's independence over the past 20+ years. We it has manipulated , changed the rules, altered the measurements so it can always or nearly always meet its self imposed targets- 0-2 % or 0-3% inflation. Of course we know that it has sat back and allowed a massive land/housing inflation bubble combined with massive inflation in the domestic economy. Great stuff.

Who Did it?

Don Brash for  start. A person less well equipped to do almost anything would be hard to find. His education and indoctrination in the US and then his elevation to the unelected position of Reverse bank Govener has been a disaster for New Zealand.  A train wreck. The funny thing about him is that when you actually meet him you realise that he is like a crazy old uncle. Best to be ignored. How he ever became so powerful is of interest though.

 

 

This bit here was really funny>

From that introduction, I take it the call for a 'real democracy' is for one that's different from what we currently have (where everyone over 18 has the right to vote). They obviously want to change that for the better. (FYI they don't actually say how their 'real democracy' will differ from the current one, but perhaps you'll find out if you go down to the Civic Square tomorrow).

Does the writer really no absolutely nothing at all about democracy. Maybe he doesn't.

In Russian you get to vote just like in New Zealand. So does the writer think that Russia is a democracy? Democracy is about so much more that just having a vote and voting. Does he really not know this?

 

An interesting debate going on here over whether the Reserve Bank is the right place to protest for Occupy Wellington. I have thought about this and think the only way to go is to Reclaim the Reserve Bank as Ours. It belongs to the people and should serve the people not Wall Street. How many Governors of the Reserve Bank have been more worried about Wall Street than about the NZ people? Stop taking advice from Wall Street! Please the people not Wall Street! They know they have the right to create interest free money for the people to use, the Governor has that right, yet he does not do it.

 

Exactly, all over the world people are realising that the current banking system has ripped them off, from the life that is possible given the worlds resources and technology.  There is no shortage of food, housing, clothing, goods etc.  These things are being destroyed every day to keep the price up, people work hard, or would if they were given the opportunity and yet they don't have equal recompense for their labour because of the current monetary system.

One reason I can think of to protest at the Reserve Bank is that they have nothing to control the derivatives market orhave been known to the recommended to governments that they control the derivatives market. They make all sorts of recommendations to governments, but to my knowledge have never advised on imposing a Financial Transaction Tax on trades in derivatives. Here are a few extracts from a posting I read this morning from Keith Fitz-Gerald is Chief Investment Strategist, Money Morning.

 In 2009, five banks held 80% of derivatives in America. Now, just four banks hold a staggering 95.9% of U.S. derivatives, according to a recent report from the Office of the Currency Comptroller.

 

The four banks in question: JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), Bank of America Corp. (NYSE: BAC) and Goldman Sachs Group Inc. (NYSE: GS).

 

Derivatives played a crucial role in bringing down the global economy, so you would think that the world's top policymakers would have reined these things in by now - but they haven't.

Instead of attacking the problem, regulators have let it spiral out of control, and the result is a $600 trillion time bomb called the derivatives market.

The notional value of the world's derivatives actually is estimated at more than $600 trillion. Notional value, of course, is the total value of a leveraged position's assets. This distinction is necessary because when you're talking about leveraged assets like options and derivatives, a little bit of money can control a disproportionately large position that may be as much as 5, 10, 30, or, in extreme cases, 100 times greater than investments that could be funded only in cash instruments.

The world's gross domestic product (GDP) is only about $65 trillion, or roughly 10.83% of the worldwide value of the global derivatives market, according to The Economist. So there is literally not enough money on the planet to backstop the banks trading these things if they run into trouble.

Alex Tarrant has a point about Treasury in his original post, given that a great deal of the BRT's major players hail from that building. Why not both sides of the Terrace?

I'm not so sure about occupying the US Embassy - not every American is Dubya or Madoff, and the OWS movement makes that pretty clear. The guilty parties like Goldmans, BoA et al don't exactly have an overt presence in these parts, only their toadies like the BRT.

And to those who write off the Occupiers as pothead bludgers, 3 of my closest friends are post-grad qualified (one a PhD in bio-chem, another a Masters in library systems, and the 3rd in ICT) but severely under-employed.