Bernard Hickey says that after six long years in recession, normal patterns of spending, employment and consumerism should be emerging, but they're not

Bernard Hickey says that after six long years in recession, normal patterns of spending, employment and consumerism should be emerging, but they're not

By Bernard Hickey

Something has changed in New Zealand's economic chemistry that is forcing our policymakers and business owners to revisit many of their old assumptions about how we earn and spend.

It's only now as the economy starts to recover after 6 long years of recession or near recession that this change in chemistry is revealing itself. No one is quite sure yet why it's changed, but it's clear something has and it has profound implications for business owners, voters and politicians alike.

The Global Financial Crisis was by most measures our biggest economic shock since the 1930s, but most economists believe it is now over and patterns of spending, employment and consumer should be returning to 'normal'.

The trouble is they're not and it's now long enough to start seriously questioning the assumptions underpinning how our government collects revenue and spends it, how we train and employ people, and how to make and sell products and services.

The first place to see this change is on our roads and who's driving on them. The Ministry of Transport has noticed in the last six months that people are driving less than they 'normally' would at this stage in an economic recovery. They're still driving to work, but they're choosing to drive less on holidays or other 'discretionary' outings than they should if the pre-GFC patterns were followed.

Collections from fuel excise duties and Road User Charges are running about NZ$90 million below forecasts for the current 2013/14 year. MOT isn't exactly sure why we're doing less discretionary travel, but there's a few factors at play.

The ageing population and lower birth rates could be reducing driving, given people over 40 and particularly those without children go on fewer outings. MOT is also finding youngsters are getting their driver's licenses later, or not at all. It seems the young are more interested in burning through their data caps on their iPads than doing burnouts in their cars. Also, the average age of New Zealand's car fleet has increased by more than a year to 13.4 years in the last decade and older cars tend to be driven less. All this has added up to a 7% fall in average kilometres driven per capita since 2005.

Also, the relationship between petrol prices and car usage may be more 'elastic' than before the GFC. Previously a spike in the petrol price would cause a short term dip in travel, before usage returned to normal. Now cash-strapped drivers seem more sensitive to petrol prices, which have almost doubled in nominal terms in the last decade.

And consumers are not just more sensitive about petrol prices. Electricity demand has also flattened out for the first time in more than a century of economic growth after a doubling of prices over the last decade. Household power consumption has fallen 3% in the last four years.

This week's retail sales figures highlight the changes happening in the 'chemistry' of the economy. Total spending volumes are recovering and the strength surprised a few economists, but it's happening in unexpected areas such as accommodation, alcohol, takeaway foods, electronics, telecommunications and cars. Spending is accelerating most for products and services where prices have fallen, which seems natural.

That means anything imported that benefits from the high New Zealand dollar or where there is genuine competition pressing down on prices is proving popular. Locally produced products or services where prices have inflated rapidly over the last decade because of tax increases, which includes fuel and electricity, are taking a hammering.

One reason consumers are so sensitive to price and are shifting towards cheaper services in particular is that wage growth has also shifted lower. Last week's jobs and wages figures showed average wage inflation falling to its lowest level in at least a decade. Jobs are returning, but they seem to be in the lower wage and less secure services sectors such as fast food and aged care. The young are being hit hardest by these 'McJobs' and by unemployment rates in their high teens, near the worst levels since the early 1990s.

A pattern is emerging. An ageing population with weak wage growth and high youth unemployment is opting to drive less and buy relatively cheaper goods and services, particularly if they are imported and benefit from a strong New Zealand dollar. Previously 'inelastic' demand for the likes of fuel and power appears to be more 'elastic', which means price changes have a much bigger impact than they used to. A structural type of deflation is seeping into the bones of the economy.

Businesses and governments doing their tax and revenue forecasts should think more about deflation and the hyper-sensitivity of consumers to price hikes. It also means low interest rates for longer.

--------------------------------------------------------------------------------------

This article was first published in the Herald on Sunday. It is used here with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

52 Comments

Comment Filter

Highlight new comments in the last hr(s).

The changes are far from all bad, and shouldn't remotely be a surprise. They more than hint at solutions to the supposed demographic crisis of the baby boomers still consuming but not working. Worldwide including in NZ,  pretty clearly as the boomers retire, they consume less, both because they have less income, and because they need less. Healthcare will be the only growing consumption category in their group. 
Younger groups may be consuming less because they have little income, but may also be fairly content in low cost internet based leisure. Certainly in my household they take some getting out of the house.
Overall lower consumption will delay any peak oil type impacts.
Nevertheless if governments really want to boost consumption, and therefore production, (or vice versa, it doesn't really matter) the solutions and policy changes seem fairly simple. 
Manage the current account as a priority, which would include some optimising of the exchange rate and capital flows. Do not kick stupid own goals like selling power companies off to foreigners, or have treasury borrow money from foreigners. Target tax reductions at lower income groups- where in my view the simplest solution is to raise the thresholds at which higher tax rates start.

Once people realise that the empty threats of interest rate hikes are in fact completely misleading, they may start spending again.
Also, once Labour & The Greens get into govt, we should get an active economy again. Also we should get bailouts for the local councils, schools, universities, polytechnics, govt depts that aree being starved financially by the current Govt.

Once people realise that the empty threats of interest rate hikes are in fact completely misleading, they may start spending again.
 
You need to get out more - I would say this is just the beginning. Thankfully, our local corporates funding their debt requirements with local fixed interest bond issues can add mark to market investor losses on the falling value of this outstanding debt to their P&L, as a profit, while interest rates rise. Just another wonder of the accounting profession - you must be the only entity that notices a cost when rates rise. - I think you need to re-order your affairs and the identity of the financial vehicles you operate. 

The RBNZ has locked itself into a state of irrelevance while the tool of control remains the OCR - longer term rates as I have just disclosed can meander higher on the back of market sentiment unless QE programmes are engaged. Even then it has become apparent the Fed is falling to maintain the desired level of lower for longer term rate control.

Collections from fuel excise duties and Road User Charges are running about NZ$90 million below forecasts for the current 2013/14 year.
 
So another plank of the National Government's economic policy is found, yet again, at the bottom of the cliff - I am sure the proceeds of the new government debt to fund road building and maintenance infrastructure programmes are nestled peacefully in the contractors bank A/Cs, while the citizens have the daunting task of servicing and redeeming their windfall.
 
Bernard, you noted a similar development engineered by the government in respect of the internet in last week's article - overcharching in the copper ADSL delivery sector will price out those on low incomes long before publicly funded UFB is available.

Great Observation about whatever it is the government is wanting for the people who live here.  The population seems to be well down their priority list.  if the priority isn't the people who live here  - what is?

KH
New Zealand’s Constitutional Arrangement (unwritten constitution) is an arrangement to enslave the people of New Zealand.
 
It grants, to the government, sovereignty (ultimate power) over the people.
It even grants sovereignty (ultimate power) over the New Zealand peoples Human Rights. The government decide what rights the people can, and cannot, have.
The Judiciary are just the whipping boys to make sure the New Zealand people obey their masters.
 
It is going to take a revolution to break away from this slavery and get our freedom.
 

or we could get binding referenda and get a constitution... but yeah, something needs to change.

Some businesses are thriving, perhaps that part of the problem, a big part
 

ANZ breaks billion dollar barrier
ANZ claims to have a relationship with one in two New Zealanders
and we know what kind of relationship that is, they are servicing us, like in the farming sense.
 
http://www.stuff.co.nz/business/money/9051241/ANZ-breaks-billion-dollar-barrier
 
 I've been reading some of this guys writting about banking, interesting
 
http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch02.htm

Thanks for that Lenin article.  Those late 19C and early 20C writers/thinkers had such clarity of thought and writing.  Some of their style of writing is not so easy to read these days but when it is they are a joy to read.  In those days though, money was based on the gold standard.  That was finally abandoned in 1971.  Personally I don't think most economists have completely come to terms with that.  They are always trying to hang the value of money on to something. It is as if they are still tied to their Mother's apron strings and can hear her voice saying "we can't afford it. If your father brought in more money....." The old supply and demand theory. They then try to apply that to the economy of a country.  Perhaps we will just have to wait for another generation to look at how things actually are rather than such outdated views.

Or 'Why Isn't There a Demonstrably Correct Economic Theory':
 
http://www.oftwominds.com/blogaug13/economic-theory8-13.html

I don't know why I haven't read this guys blog before, but he is a very good mind.
 
http://fofoa.blogspot.co.nz/search?updated-min=2013-01-01T00:00:00-08:00...
 
If you follow the links you will find an exchange on Hyperinflation between Charles Hugh Smith and FOFOA in the comments below the article. I think you will appreciate to Andrew.

Thank you Bernard.  We need to be thinking about this. As you point out.  Life might be different.
There are some fondly held concepts that do need to be questioned.  One is that economics have an inevitable perfectly formed wave pattern.  Changes one way for a while and changes back.
Actually some trend in a direction and keep going.  For example we do seem to moving into a permanent labour surplus.  Have been for decades and possibly will continue to increase.
Things have changed in New Zealand that are not going to change back.  We used to behave in one way because we had the idea of safety.  Correctly or not.  I don't think we have that any more. It only takes a problem at Fonterra to make us realise that the whole thing is fragile.  People are thinking these things much more acutely.
Maybe it always was fragile.  And we are only just losing that innocence.   

Not much point in having balanced books, if the economy dies in the process. Is there enough economic stimulus? The govt can play a useful role in keeping an economy afloat on the verge of a global recession. Better to get cash flowing via public institutions & wages, public projects, than $$ in the hands of the 1%.

... " a structural deflation is seeping into the bones of the economy " .... ah ha ha de haaaaaaaaaa ! .... you're a wag , Bernie ....there's some changes occuring in our spending habits , and you turn it into a disaster scenario ...
 
[ Didyer see that hickeysterical fellow , Howard Davidowitz on Yahoo finance , predicting a collapse of the US economy because Walmart fell a penny short of forecasters' profit predictions .... their predicitons , not from Walmart's management .... it could just be that there's a shift occurring , and some folk are Walmarted out , meebee they want JCPenny's instead ..... ]
 
... seriously , big guy , so what ! .... Nothing stays the same for long , there's constant changes , innovations , and endings ... either accept it , or don the tin-foil hat and head into your bunker with an armload of beans and ammo ....

The 1% are investing, the middleclass are coccooning, the unwaged/minimum waged are crashing.
But of course the Chch rebuild is coming to the rescue.
Any minute those obstinate consumers will start spending, then we can hike rates - in the way we used to..

Key has moved his minute-to-minute trader mentality to the national scene. 
As Rod Oram points out in his Sunday Star Time column today.
"Having ditched its roadmap of policies and principles, the Government is taking the public for a scary ride. It is getting more reckless by the day"'
Whatever is said about moving toward 'normal' spending, many people are just not going to open the wallet too wide while still on the rollercoaster.
Key's idea of pragmatism to hold on to power at any cost is absolute fool territory.

When you have a lot of debt secured against unproductive assets, things can go from bad to worse in a hurry.
  From the top of my head, we have 50 billion of farm debt, 78 billion of business debt and over 200 billion borrowed against housing.
Wiki,
New Zealand income levels, which used to be above much of Western Europe prior to the deep crisis of the 1970s, have never recovered in relative terms. For instance, the New Zealand GDP per capita is less than that of Spain and about 60% that of the United States. Income inequality has increased greatly, implying that significant portions of the population have quite modest incomes. Further, New Zealand has a very large current account deficit of 8–9% of GDP. Despite this, its public debt stands at 33.7% (2011 est.)[25] of the total GDP, which is small compared to many developed nations. However, between 1984 and 2006, net foreign debt increased 11-fold, to NZ$182 billion, NZ$45,000 for each person.[13]
The combination of a modest public debt and a large net foreign debt reflects that most of the net foreign debt is held by the private sector. At 31 June 2012, gross foreign debt was NZ$256.4 billion, or 125.3% of GDP.[26] At 31 March 2012, net foreign debt was NZ$141.65 billion or 104.4% of GDP.[27]
 
We were warned
 
http://www.stuff.co.nz/business/money/5051060/NZ-dangerously-in-debt-top-businessman

We just like to think we are and then we turn down projects to the tune of billions of dollars
 
Got links to declined projects worth billions?

Ohh got it beside the links
 
Shame the recent hotel hygiene graduates will have to look a bit further afield for employment - not that tax and student loan repayments would leave them much disposable income to play with - I guess after working for famliy payment transfers the rest of us will be contributing to the new hotel owners/managers returns.

Not to mention that tourism is destructive to the local culture, but that point is lost on those with the short sighted dollar in their eye. Hotels and retail are not more productive assets than residential housing is.

Have we discussed the late Prof Sir Paul Callaghan's "Beyond the Farm and Theme Park" presentations before? 
One of NZ's brightest minds ever. Watching the full thing is one of the best uses of time you will make. 
http://vimeo.com/24850332
 

Glad Bernard that you noticed that fuel excise duties are running $90m below forecast and that there is a 7% fall in the average kilometers driven per capits since 2005. 
Those who have read Richard Heinberg's book The End of Growth or the Tullett Prebon document The Perfect Storm by Dr Tim Morgan won't be surprised at all. They will have learnt that as the energy returns cliff approaches, there is less energy available to grow the economy as more and more has to be reinvested in extracting fossil fuels.
So it isn't the end of fossil fuels which is the problem, it is the end of the easy-and-cheap-to-extract fossil fuels. And it won't be solved by fracking or deep sea drilling because each new technology seems to have a lower EROEI than the last. We are talking about the EROEI fraction - Energy Return on Energy Invested.   
Tim Morgan says "The Economy as we know is facing a lethal confluence of four lethal factors - the fallout from the biggest debt bubble in history; a disastrous experiment with globalisation; the massaging of data to the point where economic trends are obscured, and most important of all the approach of an energy returns cliff edge." You might ask who is Tullett Prebon. Wikipedia says "The company operates as an intermediary in wholesale financial markets. Many of its clients are commercial and investment banks. It operates in eight product areas: Volatility, Rates, Credit, Treasury, Non Banking, Energy, Equities and Property." So they ain't some greenie crazy. 

DeidreKent - Bernard Hickey has had that message - clearly articulated and referenced - for some years now. I thought he might be the one (a certain ability to think for himself, rare in economics circles) to point out that the world was indeed not flat, to the mass of believers.
 
I was wrong. He went back into his shell - "thinks there's a wee bit of growth left yet to be had".
 
Why folk do this (pull back in denial) is an interesting question, and may well point to the failure of our species en masse. Well expressed, you. I gave a lecture at Otago Uni on all of this, last Friday. Will post the link when they put up my PP.

gee, I just read 'The Perfect Storm' - a compelling piece of work!
Thanks (I think)

I have a great respect for Tullett Prebon - they issue some of the best explanations of the debt-bubble crisis. For example, they differentiate between growth in self-liquidating debt and growth in non-self-liquidating debt; which is one of the keys to understanding why we are now in such a mess. There has never been such a splurge on non-self-liquidating debt, and such a crowding out of self-liquidating debt. 
A substantial part of the non-self-liquidating debt is straight out "sunk" in land price Ponzi inflation. 
However, the price of energy relative to incomes is what matters for continued "business as usual". Google "Fossil Fuels Pyramid". The more expensive it is to extract, the more there is of it; and the more viable alternatives become; and the more investment there is in alternatives and R&D.
This is why economies where there is minimal zero-sum economic rent-extraction from households and businesses have no problem affording energy costs at current levels. Where there are high levels of rent-seeking and households and businesses struggle to cope with these burdens, their ability to handle the cost of energy is constrained and their economy is far more volatile on the downside.
Seeing Tullett Prebon are a UK outfit, it is not surprising this aspect would worry them. UK households and businesses are probably the most "gouged" in the first world, by the FIRE rent-seeking racket.

Yes Hugh, the banks have to exit from the equation, permanently.
 
As with interest, so too profit and dividend, and capital gain.
 
If the chargers of those things insist in being 'paid', someone somewhere down the feeding chain has just been triaged out.
 
http://www.otago.ac.nz/news/events/otago051777.html
 
http://www.otago.ac.nz/news/events/otago048320.html
 
You could have come along and learned about building cheap efficient housing, and why it will be needed.

This is where you have your blinkers totally on Hugh. Egypt will descend into civil war for one reason and only the one reason, they have run out of energy. Over the last five years they have transitioned from being an exporter of energy to an importer. The surplus of energy they once had allowed their population to grow beyond the natural ability of the land to support it. There are plenty of fools that think it is a political or religious issue, nope sorry it is about resources. Malthus happening right there before you eyes but you still can't see it.
 
BTW do you know the energy equation for New Zealand?

Quite hilarious, how to turn an energy problem into a housing one. Sorry Hugh, get onto Wikipedia and look at the energy equations. It isn't like they are hidden away. Saw some numbers for Mexico the other day, they are not far off the same scenario and will be come quite a problem for the USA.
 
You know something else has occurred to me in the last week and that is the flaw in the argument that we will innovate our way out of any energy problem. See the problem is really about complexity and that takes a surplus, when your suplus runs out you leave behind the ability to innovate and simply try to survive.
 
Not that your housing issue is irrelevant, but it is a symptom not a cause. But then the western world is good at treating symptoms rather than identifying causes so you are in good company.

I think Hugh's housing concerns are hugely relevant. I don't think desiring affordable housing is mutually exclusive from environmental objectives. In fact I think we could have more rural-based or urban-fringe communities, with affordable housing, that are also exemplars of sustainability. 
If people opened their minds there are some valid solutions that cross the apparent ideological divides.   
 

I keep getting frustrated by Powerdownkiwi's intransigence on this, in particular. He himself is a living example of sustainable low density living, yet every time Hugh or someone points out that allowing lower density living by scrapping UGB's would restore housing affordability, PDK leaps in with snide comments about how Hugh or whoever doesn't understand sustainability....!
I have even told PDK that I'd regard him as an NZ hero, along with Hugh, if he joined the discussion constructively and made his own example an option as part of the solution. 
Hugh just wants to bring the price of land down. PDK has suggestions about super cheap buildings and sustainable low density living. Why PDK always has to regard these efforts as not complimentary is beyond me.
Has anyone else got any theories to explain this weird behaviour? I have suggested a few. 

great points.
I think the problem is that environmentalists equate low density peri-urban living with energy intensive development. And generally they are right. There are plenty of horrid and soulless and environmentally destructive peri-urban developments. But it doesn't have to be that way.
There are also plenty of horrid and soulless medium and high density developments, which are not necessarily much better environmentally than the peri-urban stuff.
there's no reason why we can't have peri-urban devleopments with a significant degree of self sufficiency and high environmental performance. Hugh and PDK's views COULD be reconciled.   
 

Urban economists have always virtually unanimously opposed UGB's and advocated the "pricing" of the variables that we allegedly wish to change. That is, energy, fossil fuels, and infrastructure. 
It would be less costly to households for superior outcomes, and completely avoid unearned wealth transfers. The revenue would be reaped by government and used socially justly. 
Charging for road congestion, water, waste, higher taxes on energy, and intelligently targeted land taxes would allow people to choose from numerous mitigation strategies according to their own preferences and wisdom and market pressures. 
But what does "containing urban growth" do? How many people end up collecting rainwater, doing recycling, growing their own food, using biomass for heating and cooking, drying washing outside, using active and passive solar energy, walking places, using geothermal heat pumps, etc etc? In fact most beneficial behavioural changes are forestalled by growth containment.
And there are so many unintended consequences of growth boundaries that undermine their intended benefit, the only logical reason they are the number one preferred approch is that they benefit so many powerful vested interests in finance and property. This is also the logical reason for political reluctance to tackle reform. 

Well you know I am always keen to see sustainable housing, but New Zealand currently imports about 50% of its energy. A simple fact that means the way we currently conduct business, and housing, is NOT sustainable.
 
Affordable won't happen until you get the unearners out of the equation. All Hugh talks about is shifting the profit to someone else rather than tackling the underlying cause, which is too many people with their snout in the trough. That list of snouts includes developers, but bankers and government all get their cut.

NZ could be self sufficient in energy, we just lack the political will and/or it is cheaper to import it, at the moment. 
I agree 100% about getting the "unearners out of the equation".
That is the vested interests of finance and property investment.
But property developers in a competitive free market make little "unearned income" at all. This is why housing is so affordable everywhere there are no UGB's. There is close to zilch unearned income incorporated in the prices.
It is completely erroneous to equate the vested interests in "sprawl" with the vested interests in urban growth containment. The latter causes unearned gains several orders of magnitude greater than the former. 
And the "vested interests" in sprawl at least build stuff and employ people. The incumbents club that benefits from growth containment does not do anything but sit on its arse and watch the economic rents grow.
It is a pity that the real "vested interests" in sprawl, every future first home buyer and all renters, are ill-informed and politically not organised. And this is a "positive" vested interest, not a negative one - they just should want to not pay the rentier class. 

What is really interesting Phil is that Charles Hugh Smith uses the term "unearned income" is the article linked to ealier in this thread. It isn't the first time I have seen the content of my posts here on interest.co turn up on other blogs. Perhaps the coincidental meeting of a common theme, perhaps not. 
 
I challenged you to look past the politics to the interest component of the money supply a while back, please do as it dwarfs any other factor.
 
Oh and Japan started a world war for resources.

Charles Hugh Smith is a very good writer, I follow him. "Unearned income" is a term of long established usage in economics. It is a pity so few people understand the distinction between this and "earned income"; so much leftwing politics ends up targeting the people who earn income in a kind of "deflected spite". 
I am aware of the interest rate and monetary manipulation angle, and want that ended too. But I note the absence of urban land price inflation regardless, in those non-growth-constrained affordable cities. I also do not believe that a gold standard or some such stable money, would prevent unaffordable housing from occurring as a result of manipulation of land markets. 
Japan lost the war, but still "won the peace", even without the resources they went to war for. The reality is that most resources can be had on global markets for little more than you can produce them locally for. It is "value added" where all the wealth is to be created. 
Coincidentally, a few minutes ago this link came into my inbox. I was just commenting on here how the "vested interests" of future first home buyers and all renters was so politically unorganised; here this guy is calling them "the Forgotten people":
http://thefingeronthepulse.blogspot.com.au/2013/08/the-forgotten-people.html

Scarfie:
".....Egypt will descend into civil war for one reason and only the one reason, they have run out of energy....."
And Japan? South Korea? The Netherlands?
The difference is so culture and politics. 
Why no Islamic equivalent of Asian tiger economies in spite of decades of oil wealth? None of Asian tigers even had this advantage. Culture and politics. 

Very much correct, though chicken and egg thing in a way. Excess energy allowed excess population growth (which they could have avoided so easily), on the way up...On the way down what will drive the collapse will be over-population....Saudi is looking the same way....lots of idle young men.
regards
 

We are not Egypt, Hugh?
 
Then you don't understand the exponential function. What you are aiming for, is Egypt indeed. Why is it so many folk don't understand doubling-times? They crouch down, eyes to the ground, at 1/8th gone, and think they can go forever. Up ahead, only two 'doublings' ahead, is a pile of overpopulated sand.

PDK:
"....Yes Hugh, the banks have to exit from the equation, permanently.
 As with interest, so too profit and dividend, and capital gain....."
This is the first time I have seen your thoughts starting to progress in the direction of the underlying economics, but you have immediately failed to distinguish between the bath water and the baby. 
Abolition of finance, interest, profit and dividend is just failed Communist ideology. You need to learn the difference between honest wealth creation, which is using resources to produce goods and services for which there is genuine demand, without restraint of competition - and "rent seeking", "crony capitalism", and "zero sum wealth transfer".
If activists would settle for minimising these latter, including elininating the racket in capital gains in land for urban development, we would all benefit. Going Communist is a Procrustean "solution". 
 
 

.... you know something truely bizarre , Phil , I have been trotting in & out of my local branch of the ANZ for nigh on 40 years .... and no one , not once , not ever , has mentioned " peak oil " to me !
 
I am begining to wonder if the banks " get it " as Mr PDK is fond of saying ...
 
.... all the silly ANZ seem interested in is munny , and term deposits ,  loans and stuff .... madness , sheer madness .... oh dearie me  , where will it all end .....

Foolish comment. You fall back into your pet 'Communist' horsepoo at the srop of a whatever
 
In fact, you've learned nothing in some years. Those goods/services require work/energy, and resources.
 
Which means growth in said production had to peak, at some point. Beyond which, profit, usury, dididend had to be at the expense of something else.
 
That's not political, it's just logic. It's like pulling teeth. Very old ones, I suspect.

The mainstream economics profession is hopeless when it comes to anything involving economic land rent. 
This is the missing piece of the puzzle in explaining the severity of the 1930's depression, and the current one - and the absence of any such severe depression in the intervening period. 
The focus on the markets for financial instruments has led to the land rent factor being completely missed. 
There was a severe run-up in urban land prices in the 1920's bubble, the worst one of a series of such cycles. It took till the1950's for the prices to return to the same nominal levels in many markets.
This symptom in a boom and bust cycle was not seen again for decades. The writings of Fred Foldvary are a useful record of the history. Foldvary, however, has no explanation for the decades in which the land price boom and bust cycle was interrupted. 
However, interesting suggestions are starting to seep into academic works, that "automobile based development" was responsible for flattening economic land rent for decades, for the first time in economic history, due to the ability to convert rural land to urban use without the process being captured by the rentier class (who absolutely despised the new "splatter" developers who leapfrogged their land banks....)
Even the great Ed Glaeser has a couple of paragraphs of this in a recent paper of his. I have quoted them on this site before. Pity his "message" is all over the place......
Of course, volatility has been re-introduced to urban land price cycles by the fad for urban growth containment, hence a re-run of the systemic economic volatility last seen in the 1920's and 30's. The amount of equity affected in urban land markets is very much greater than that in share markets, and it affects exponentially more participants in the economy including "labour" and "consumers" as well as the "producers" - with little "choice" being involved. In contrast, share markets primarily affect speculators who participate voluntarily.
I fully expect Spain and Ireland to be suffering the fallout from their episodes, for one to two decades. But there are unburst urban land price bubbles in most first world countries right now. Most such countries that have not had a property bust, have an unburst bubble. Including NZ. So I fully expect something globally as destructive as the 1930's depression. 
Propping the bubble up does not avoid stagnation meanwhile, because all the "gain" is zero sum and is a cost to every part of the economy that actually produces anything. It is a cost to "labour", and a cost to employers, and erodes discretionary spending for decades going forward - as Hugh Pavletich points out above. 
I have despaired in the past about the inability to raise a serious discussion on this subject, on what is meant to be NZ's top economics and finance blog. And NZ has a good chance of leading the world in grasping these issues and carrying out the necessary reforms. I sometimes wonder just how bright one has to be to get an economics degree. Being a painfully slow learner is one thing, but refusing to "get it" when the bleedin' obvious is patiently explained again and again......... 
You bet the rentiers are fighting tooth and nail behind the scenes to preserve their racket. Pity they, like a cancer, are perfectly capable of killing their "host", the entire national economy, eventually. 

Hugh're welcome , you ... here's a little something on Hugh-tube for you too ....
 
  www.youtube.com/watch?v=b4meFC1ee7Q

Gumster - May I remind you that this is a serious finance and economics blog. The link you provided, whilst pertaining to the relationship between politics and monarchy, hardly fits this criteria. An example of an acceptable link , for example, would be this.
 
http://www.youtube.com/watch?v=owI7DOeO_yg
Damn your scrawny hide; I had never heard of Mitchell and Webb. I just spent an hour laughing so hard Mr F emerged from his tinkering to see what the heck was going on.

While we are quoting songs, how's about the old Alfred Reed one revitalised by Ry Cooder in the early 70's:
 
How can a Poor Man stand such times and Live?   (I'd recommend his Ebbetts Fields rendition)
 
And there's a corollary to Hugh P's note re the average mortage debt load:
 
The house isn't being used as an ATM no mo'.  That alone might account for 5-10% of consumption broadly defined....
 

... another 3 to 4 years should be enough for voters to forget how appalling the last Labour-Greens government was , with it's pork-barrel politics , and endless welfare programmes ...
 
Shearer may become PM in 2017 .... if the hollow men in Labour havn't knifed him in the back , before then .....

Hi Hugh,
Firstly, I have a tremendous amount of respect for your crusade against the ongoing guillotine choke on the New Zealand urban land supply. Personally, I attribute this situation to an impicit symbiosis of interest of the numerous local land bankers and rentiers, their banking partners and their political interests from one side, and the "chardonnay socialists" NIMBY-ists from the "other" political side. But I don't want to waste everyone's time discussing this segment of my opinions.
I am replying because I have an unmistakeable impression that you and the Malthusian environmentalist crew have far more in common than your narrowly focussed point of view would normally present to you. You might well approach this situation from a liberatarian "live and let live" point of view, whereas the environmentalists might, indeed be a bit more green on the outside and red inside (basically, with a view to unltimately force a hopefully pre-cataclysmic "Green Revolution" upon everyone), however consider this:
If they are right, and if "she won't be right, mate" could be the answer to this one (and if you like to hang out with the paranoid of Zerohedge, where Libertarianism and Malthusianism are considered at least dizygotic twins). and if indeed the cheaper EROEI sources are being used up only to be replaced by more expensive ones, the quasi-capitalist society as we have known it has basically reached the end of the road, and a transition to a far more sustainable and less growing societal organisation is not a question of "if" but "when", and even then, not a question of "how early" but of "how late", and "how, without too much blood and tears".
Let me summarise some more, and basically start from the proposed conclusion that the modern city, as a point of concentration of labour, capital and know-how, has become functionally obsolete by the advent of electronic "funny money", defection of Western manufacturing to the "browner" Asian shores, and availability of electronic data communication.
So, cities have not only become unnecessarily expensive and constrained to live in monuments to a bygone era, but may in fact become "death traps" by those stuck in them without a plan B, be they stuck in lowish density suburbia or more urbaine denser interiors. Wherever they may be in the city, they won't have enough space to grow their own food supplies if the food chains start breaking down. They probably won't have even enough room for the work space needed to up-skill oneself in long forgotten manual crafts, should a need arise. Finally, with a lot of increasingly desperate people around them, the last thing one may want to have is too many neighbours too nearby.
I suggest that the urban limits are not just misguided and harmful, but utterly passe. They were created to "protect the cities" and make them look pretty. Just look at Detroit - the cities of the future won't be pretty, they will probably be dying. What may be needed in the 21st century is a methodology on how to dismantle the cities and slowly help resettle as many people to a "small farm" environment as possible as gently as possible. We should not be discussing town houses versus appartments, versus McMansions. We should probably be discussing rural planning and how to bring future data to the isolated households, how to re-learn the old trades, how to build houses cheaply without roads nearby, how to raise horses and mules again.
So, I'd agree. Let's talk about how we could possibly scrap cities, and lets talk about how we let everyone choose their own population density for long term survival, not good looks (ultimately, it will all look very rural, be it Amish style or Kibbutz collective style, so why worry about looks much). If Texas has some good models for that, then let's look at Texan examples. Or, let's look at the Amish in PA. They are extremely sustainable, and no, they don't worry much about metropolitan green belts. They are one big green belt.

Great discussion, only just had time to catch up as busy last weekend. Excellent comments from Deirdrekent, Hugh, Matt in Auckland, Scarfie, PDK, Hugh, PhilB, Steve-0 and others.