- #1711115Hero42MemberMember since: July 18, 2008
Replies: 11986Hero42 February 12, 2019 at 1:56 pm
New Zealand briefly had a government guarantee for retail bank deposits from October 2008 to December 2011. It was introduced at the worst point in the Global Financial Crisis to stop a run of deposits across the Tasman to the banks’ parents in Australia, where the Kevin Rudd Government offered a guarantee for depositors there.
It was quietly dropped once global markets had settled down and was replaced by a system called ‘Open Bank Resolution’. This means there is no Government guarantee and if a bank was to fail, the Reserve Bank would shut it down and manage a capital restructure overnight so that it could re-open the next day. One way a bank’s capital could be restructured by the Reserve Bank is through a ‘hair-cut’ for depositors. Essentially, the Reserve Bank would slice a certain percentage – say 10% – off the value of term deposits to allow the bank to re-open with enough capital to survive.
Cheers 🙂#1711133paulinemMemberMember since: July 8, 2006
Replies: 974paulinem February 12, 2019 at 4:17 pm
Halycon we have NEVER had a social credit economy, Keynesian yes which I admit is similar to SC . Cracknell was only one member of parliament, how can you say he was responsible for the banking problems !
I strongly suggest you reread the post I put up yesterday which was written in the NZ Herald by an expert in economic banking management. As he correctly pointed out Austral an banks like ANZ ASB Westpac etc do not risk their investors savings to lend out they CREATE the money they lend. But these banks then expect the loans to be paid back in real hard earned monies. This is the reason they have been making obscene profits. This is the reason that our housing market has become obscenely over valued. Its the reason our rents are obscenely high as speculators with good capital reserves are the only ones that can afford to buy the overvalued homes. Then the speculators use this to make an economic killing by overcharging the rents of these homes they then rent out .#1711203jens February 13, 2019 at 10:13 am
All credits (Keynesian, “Social”, bank, and private) become just donations or procurement if not repaid, and even paulinem will have to admit that there are limits to what can be donated or just taken.#1712408paulinemMemberMember since: July 8, 2006
Replies: 974paulinem February 23, 2019 at 11:55 am
From an article in the NZ HeraldUnless It Changes, Capitalism Will Starve Humanity By 2050by Drew Hanson Contributor -I write about the evolution of business and the economy
Capitalism has generated massive wealth for some, but it’s devastated the planet and has failed to improve human well-being at scale.
• Species are going extinct at a rate 1,000 times faster than that of the natural rate over the previous 65 million years
• Since 2000, 6 million hectares of primary forest have been lost each year. That’s 14,826,322 acres, or just less than the entire state of West Virginia (see the 2010 assessment by the Food and Agricultural Organization of the UN).
• Even in the U.S., 15% of the population lives below the poverty line. For children under the age of 18, that number increases to 20% (see U.S. Census).
• The world’s population is expected to reach 10 billion by 2050 (see United Nations’ projections).
How do we expect to feed that many people while we exhaust the resources that remain?
Human activities are behind the extinction crisis. Commercial agriculture, timber extraction, and infrastructure development are causing habitat loss and our reliance on fossil fuels is a major contributor to climate change.
Public corporations are responding to consumer demand and pressure from Wall Street. Professors Christopher Wright and Daniel Nyberg published Climate Change, Capitalism and Corporations last fall, arguing that businesses are locked in a cycle of exploiting the world’s resources in ever more creative ways.
“Our book shows how large corporations are able to continue engaging in increasingly environmentally exploitative behaviour by obscuring the link between endless economic growth and worsening environmental destruction,” they wrote.
Yale sociologist Justin Farrell studied 20 years of corporate funding and found that “corporations have used their wealth to amplify contrarian views [of climate change] and create an impression of greater scientific uncertainty than actually exists.”
Corporate capitalism is committed to the relentless pursuit of growth, even if it ravages the planet and threatens human health.
We need to build a new system: one that will balance economic growth with sustainability and human flourishing.
A new generation of companies are showing the way forward. They’re infusing capitalism with fresh ideas, specifically in regards to employee ownership and agile management.
The Increasing Importance Of Distributed Ownership And Governance
Fund managers at global financial institutions own the majority (70%) of the public stock exchange. These absent owners have no stake in the communities in which the companies operate. Furthermore, management-controlled equity is concentrated in the hands of a select few: the CEO and other senior executives.
On the other hand, startups have been willing to distribute equity to employees. Sometimes such equity distribution is done to make up for less than competitive salaries, but more often it’s offered as a financial incentive to motivate employees toward building a successful company.
According to The Economist, today’s startups are keen to incentivize via shared ownership:
The central difference lies in ownership: whereas nobody is sure who owns public companies, startups go to great lengths to define who owns what. Early in a company’s life, the founders and first recruits own a majority stake—and they incentivise people with ownership stakes or performance-related rewards. That has always been true for startups, but today the rights and responsibilities are meticulously defined in contracts drawn up by lawyers. This aligns interests and creates a culture of hard work and camaraderie. Because they are private rather than public, they measure how they are doing using performance indicators (such as how many products they have produced) rather than elaborate accounting standards.
This trend hearkens back to cooperatives where employees collectively owned the enterprise and participated in management decisions through their voting rights. Mondragon is the oft-cited example of a successful, modern worker cooperative. Mondragon’s broad-based employee ownership is not the same as an Employee Stock Ownership Plan. With ownership comes a say – control – over the business. Their workers elect management, and management is responsible to the employees.
REI is a consumer cooperative that drew attention this past year when it opted out of Black Friday sales, encouraging its employees and customers to spend the day outside instead of shopping.
I suspect that the most successful companies under this emerging form of capitalism will have less concentrated, more egalitarian ownership structures. They will benefit not only financially but also communally.
Joint Ownership Will Lead To Collaborative Management
The hierarchical organization of modern corporations will give way to networks or communities that make collaboration paramount. Many options for more fluid, agile management structures could take hold.
For instance, newer companies are experimenting with alternative management models that seek to empower employees more than a traditional hierarchy typically does. Of these newer approaches, holacracy is the most widely known. It promises to bring structure and discipline to a peer-to-peer workplace.
Holacracy “is a new way of running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micromanaging boss.”
Companies like Zappos and Medium are in varying stages of implementing the management system.
Valve Software in Seattle goes even further, allowing employees to select which projects they want to work on. Employees then move their desks to the most conducive office area for collaborating with the project team.
These are small steps toward a system that values the employee more than what the employee can produce. By giving employees a greater say in decision-making, corporations will make choices that ensure the future of the planet and its inhabitants.
#1712484jens February 24, 2019 at 9:08 am
- This reply was modified 5 months, 3 weeks ago by paulinem.
Drew Hanson is wrong, because e.g. in New Zealand without more saving and investment or capitalism (in wakas and pahs) than what was done by Maori 300 years ago – and the current population density – enough food would be very hard to hunt or harvest, and there would be much more warfare than there was 300 years ago.
It is only capitalism with the help of science, that can adequately deliver less polluting productivity and population stability (or reduction if needed) in a humane and orderly way.
Since all ownership is capital, then do not the words The increasing importance Distributed Ownership and Governance and Joint Ownership of Collaborative Management suggest some capital ownership by all ?
Therefore – would not the first step towards more democratically egalitarian capitalism (without which we would be still just hunters and gatherers) to make everything suggested by Drew Hanson (and paulinem?) achievable if desired –
be a policy effort to achieve at least a minimally meaningful level of capital ownership by all citizens eventually ?
Or in other words – with the goal being a 100% Property Owning Democracy with no Have-Nots!#1714090jens March 10, 2019 at 7:24 pm
since there doses not seem to be any opposition to – or complaint about – a Property Owning Democracy with 100% of citizen participation in it and no children born into have-nothing poverty –
would it not be reasonable now for proposing and discussing practical propositions to initiate and accelerate movement int th is direction ?
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