A Tale of Two Dividends: Asset Sales II

This to the uninformed mercantilist, newly patriotic Left, and to the good’ol uninformed mercantilist, nationalistic, conservative Right, both of whom in an orgy of misplaced passion lit up Twitter last night with indignation at the government having passed assets sales legislation by a single vote, which Clayton Cosgrove called a ‘travesty of democracy’. You were partly right, Clayton, though missed the major point that democracy has become the travesty –because a majority vote doesn’t necessarily make something right, does it? Though in this case, for once it was. So for all those emoting on the TV3 news this morning about investments for their children, and their children’s children, further missing the points that our forced investment in the welfare state through these assets has ended us all up in children begetting children, and that currently as you are neither entitled to dividends from these assets, nor have any say in how they are managed, regardless,  you don’t own them anyway, I offer the following. In these, the worst of times, whole economies falling over under a hubris of debt, and the best of times, because we see, again, the disastrous place where the Keynesian form of socialism takes us, I put to you this tale of two dividends.

To really set the xenophobes aflame, the first dividend of $1,000 is going from the asset sales to a family in China that have invested in Mighty River. As a businessman has previously put to me, a mad, bad, sad ‘dividend outflow'. Only, is it? The dividend is paid in NZ dollars, useless to this family, so they must first exchange it for renminbi, meaning they must find someone to sell their NZ dollars too. Fortunately for them, via the beauty of markets, though they are never going to know them, an American family wanting to tour NZ buys the local currency, transfers it electronically back to a bank account in New Zealand, and the entire $1,000 is then spent in the only place it can be: here, in the cafes, restaurants, and on services. So, as no one has answered on my previous post, I again ask the patriots, where is the outflow here? Thus where is the problem?

The second dividend of $1,000 goes to Ma and Pa Kiwi. Thank goodness, intone the Luddites, the pressure from the uninformed has ensured a majority ownership in New Zealand hands still. Oh, no. NO! Ma and Pa what the hell are you doing! Oh for goodness sake, they just used their dividend to purchase that brand new LED TV they’ve always wanted shipped here from Taiwan. Surely, mercantilists, this is a disaster? The whole $1,000 is now only growing the economy of Taiwan! Dividends used to buy imports, this is a disaster for our economy.

Fortunately, I shall push the narrator’s wise head in here to sooth the sweating brows of those who feel wronged. Nay, betrayed. The only thing I am attempting to show, is that just as exports are merely the cost of our imports, that in this tale of two dividends lies no argument, none, zilch, zero, nadir, against privatising and selling ‘our’ assets. And my plea is for all of you to please use your minds, and figure this stuff out, because your emoting has me imprisoned in this slave state of taxation. In other words, we all need to grow up. Plus why have you all forgotten the best way to a peaceful world, is global trade based on the voluntary transaction, and that includes cross border investment.

Oh, ps, thankful for inspiration, and bowing down before the Cactus ;)  Further debt owed to Paul Walker of Anti-Dismal, for the 'dividend outflow' heads up.

Related: Asset Sales I.