The economy

Press, 30 December 1985, Page 16

The economy

Sir,—When farmers are facing their worst crisis since the 19305, it is noted that the Barclay share index had reached an all-time high. No doubt, the medicine dished out by Mr Douglas was intended to benefit some, at the expense of others. As a consequence of the Higher Salaries Commission’s deliberations, it is no wonder that nurses, teachers, busdrivers, etc., demand substantial salary increases. The end. result will be higher inflation and a devaluation of the New Zealand dollar. Farming leaders should therefore request the Government to adjust the exchange rates so that SNZI is worth a maximum of SUSO.42. What the Government has done is to devalue the dollar, internally, as a result of approximately 16 per cent inflation, yet revalued externally by attracting overseas finances with high interest rates. It would be to the long-term benefit of New Zealand for there to be a realistic rate of exchange. — Yours, etc., A. J. SHEW AN. . South Canterbury, December 23, 1985.

Sir, — The combined logic and economic analysis of Mr Rosenberg’s special article and M. Creel’s letter (“The Press,” December 19) constitute a prophetic vision of a country being planned into deeper economic disorder and insolvency by a sortie of backroom theorists and political jugglers. Nor can it be otherwise because of the irreconcilable and inherent contradictions of a system staggering from crisis to crisis. “Think Big” is now an acknowledged colossal failure while the

new marketing system is an opportunist variation of Thatcherism and Reaganism — robbing poor Peter to enrich prosperous Paul. Then such odds and ends theories as a pan-Pacific, economic’ sphere, a New Zealand-Australian political alliance, the revamped social credit theory and the greatest of all — the Keynesian theory which in times of crisis urges Governments to expand, particularly in the lucrative armaments industry, hence necessitating finding a potential enemy. Then the New Deal type of thing in which the towns are taxed to pay the farmers to non-produce or destroy food. Surely a mad hatter’s scenario. — Yours, etc., W. J. COLLINS. December 26, 1985. Sir,—Poor M. Creel is still flogging his old horse, the capitalist system (December 19). Near genuine capitalism occurs only in Hong Kong and therefore Hong Kong has the highest productivity and creation of wealth in the world. All other countries are overburdened by Government interference and hence astronomical budget deficits leading to stagnation (even Japan). In New Zealand we now have a supposedly socialist Government which allows the financial world nearly total freedom. This is exactly the area where Governments should have firm control to prevent those depressions Mr Creel ascribes to capitalism. (See W. Rosenberg’s article, “The Press,” December 21). A deep depression is on the cards unless we can obtain people in government who are aware of the lessons of the past. Our present lot seem to have come from those who failed in business, the law, etc. and who are mostly egomaniacs. Mr Moore, our Minister of Overseas Trade, seems an exception.—Yours, P. A. VAN DUGTEREN. December 23, 1985.