Thursday, 12 December 2019

Grant Robertson Spends Up Large - On The Establishment!

Grant Keeps On Trucking: Out of the $12 billion Robertson has announced for infrastructure investment, $8 billion will be allocated to specific projects, with the balance of $4 billion held in reserve. What does it say about this Government's "transformational" ambitions that 85 percent of that $8 billion is to be spent on “transport projects” – by which, of course, Robertson and his colleagues mean “roads”?

I’VE BEEN WATCHING The Crown on Netflix. The fifth episode in the latest series, “Coup” exposes the 1968 plot hatched by furious members of the British Establishment to overthrow the Labour Government of Harold Wilson. The plotters included not only the pugnacious media-mogul, Cecil King, but also the Queen’s second cousin (and recently laid-off head of the UK armed forces) Lord Louis Mountbatten. Obviously, the planned coup never eventuated. I mention it only because the drama provides a forceful reminder of how the Establishment responds to genuinely democratic-socialist Labour governments.

I think it’s safe to say that after Finance Minister Grant Robertson’s announcement of the Government’s proposed infrastructure spend-up, the New Zealand Establishment will be plotting nothing more dangerous that inviting the Minister to celebratory end-of-year drinks. Out of the $12 billion Robertson has set aside for infrastructure investment, $8 billion will be allocated to specific projects, with the balance of $4 billion held in reserve. That the Establishment feels able to relax is attributable to the fact that 85 percent of that $8 billion is to be spent on “transport projects” – by which, of course, Robertson and his colleagues mean “roads”.

Oh, sure, Robertson’s media release refers to roads and rail, but unless something profoundly “transformative” has occurred within the present Cabinet, the amount spent on New Zealand’s publicly owned railway network is unlikely to represent even a sixth of that $6.8 billion. Which means that this Government, supposedly committed to purposeful action against Climate Change, is proposing to spend billions and billions of dollars on making our roads safe for the road haulage industry’s heavy trucks and the middle-class’s gas-guzzling SUVs. The Establishment doesn’t organise coups against Labour ministers who do it favours like that – it nominates them for knighthoods!

Robertson’s announcement comes after months of just about every major banker and businessperson, every mainstream economic and political commentator, earnestly begging the Finance Minister to take advantage of the unprecedentedly low cost of borrowing to fiscally stimulate New Zealand’s sclerotic economy. I suppose we’re obliged to congratulate Robertson for his discipline. A less cautious politician would have taken the  policy initiative – along with the consequent kudos. But not Robertson. Determined that only good headlines would greet his final determinations, he waited until the pressure for some sort of major fiscal intervention became irresistible. Unsurprisingly, media criticism has been … muted.

But, if Robertson’s caution is bad, then the Greens’ response to his announcement is just plain sad. To be clear, their transport champion, Julie Anne Genter, has been humiliated. The road transport lobby has effortlessly outmanoeuvred whatever policy wonks she’s had pitching the case for rail. The tires on the wheels of the big rigs chewing up our roads are all humming “Hallelujah!”

But, are the Greens’ outraged? Are they cutting-up rough? Not soze you’d notice. How’s this for a media release?

“The Greens in Government have today won a significant investment to help move the public sector estate onto clean, renewable energy, Green Party Co-leader, James Shaw, said today.”

Seriously? Yes, seriously. And, it gets worse:

“As part of the Government’s capital investment package announced today, the Government will support the public sector to reduce its carbon footprint through an infrastructure spend of $200 million.”

Oh, wow! Really, James! A whole $200 million! So the Public Service can buy a few more Prius cars? How can we ever express our gratitude? A Labour-led government, with $12 billion to spend, allocates a breath-taking $200 million to making the Zero Carbon Act mean something. Are we supposed to be grateful? What would Greta say?

And Metiria – what would she say? Twelve additional billions of dollars to spend and from what’s been released today it would appear that not one cent of it is to be spent on beneficiaries. Never mind the recommendations of the Welfare Expert Advisory Group. Never mind that the Job Seekers Allowance is simply too meagre to live on without falling deeper and deeper into debt. Never mind that pouring money into the pockets of our poorest citizens is the fastest and most effective way of delivering our economy a much-needed shot of adrenaline. No, never mind all that. Finance Minister Robertson and Social Welfare Minister Carmel Sepuloni have no intention of upsetting the Establishment by giving beneficiaries anything remotely resembling a Christmas present.

So much for our “transformational” government: our Prime Minister’s “politics of kindness”. The saddest part of this very sad story isn’t just its courage and compassion deficit; or even its complete failure to register the scale of the opportunity that’s been lost. No, the saddest aspect of this disgraceful announcement is that young people will receive it as the best the Left can do. It’s not, kids. Truly. Genuine Labour governments, genuine Labour Prime Ministers, have done way better than this. If you don’t believe me, then take a few minutes to watch this

Before concluding, however, I’d like to leave you with this quote. Appropriately, given the way this post began, it’s about Harold Wilson. What he stood for and why, eventually, the Establishment was successful in driving him out of office. (The quote itself is from Smear! Wilson & the Secret State by Stephen Dorril & Robin Ramsay. Published in Great Britain in 1991 by Fourth Estate Limited.)

“Wilson embodied the radical end of the wartime social contract, which not only saw that a dynamic mixed economy demanded a producers’ alliance, but also saw that such an alliance could not succeed with an ascendant City of London. The extraordinary hatred that Wilson provoked on the British right was not irrational: Wilson was a serious threat; he knew who the 'enemy within' actually was. And they knew he knew; ‘they’ – the banker in the City with the elder brother in MI6 and a cousin in the Army – ‘they’ knew that Wilson, virtually alone among Labour leaders of his generation, had pulled aside the whisps of mystification which hid the British Establishment and seen the power of finance capital at its heart.”

If Grant Robertson and his colleagues ever followed the financial sector’s twisting labyrinth to the Capitalist Minotaur’s hidden lair, it wouldn’t be to slay him, but only to slap him on the back, shake him by his bloody hand, and invite him to the Treasury’s next cocktail party.

This essay was originally posted on The Daily Blog of Thursday, 12 December 2019.


JanM said...

Do you not think it likely, then, that the 'road and rail' plans have a lot to do with moving the Port of Auckland?

Anonymous said...

Thanks very much for posting the link to Frosts interview with Kirk. Back in the day when television interviewers were journalists & studio audiences were there to be informed rather than entertained. I saw this when it was originally broadcast on our single channel, it also reminded me of why I voted for Kirk in my first opportunity to vote in an election.

Guerilla Surgeon said...

If my memory serves, there was a similar alleged plot against Roosevelt in the 1930s by a cabal of businessmen and senior officers. It was taken seriously enough to be investigated by the House Un-American activities committee. A great group to investigate a right wing plot. My dad served under Mountbatten briefly, and thought he was a great man. Mind you, he was about eight ranks below him so they never actually met.:) I always thought the man wasn't that bright. Not uncommon in a royal.
As for the rest of the column, I really need to digest it. I mean the news that Labour isn't going to be transformational as no surprise. The fact that they would shaft the Greens by building so many roads is. Beginning to think they don't deserve a second term. The problem is the alternative are a bunch of self-satisfied, entitled, enablers of neoliberal capitalism.............. oh.:)

Patricia said...

Apart from the fact that no sovereign government that has a floating exchange rate ever needs to borrow and can develop a country for its people this government is pathetic as a national led government would be.
As an aside the other day I was at my local bank when I saw a homeless man sitting on the ground begging. He had his dog beside him. While admiring his dog I asked him if he had a benefit. He said no. I asked why not. He said because he hadn’t got a birth certificate and he couldn’t afford the $33.00 to get one. I got his details and ordered one for him. I went back to tell him I had ordered one for him but he had gone so I rang the City Mission who knew him so I gave it to them. But that got me thinking. Why do we have all these homeless people when we didn’t have them before? I enquired at my bank what was required to open a Bank account. A photo ID (a passport or drivers licence would do) and confirmation of address through either a letter from a phone or electric company but that letter could not be any older than six months! So my homeless man couldn’t open a Bank account. I looked at the requirement to get a benefit. Definitely a bank account, a letter from the IRD, a a birth certificate and a myriad of other requirements! So, once again, it is the system. Not the person but we love blaming the person. We just don’t have think! Another thing is that WINZ can stop their benefit if they don’t go for job interviews. But have you looked at the cost of a bus ticket these days? How in the hell can these men go for interview after interview when the job seeker allowance is so pitiful.

Guerilla Surgeon said...

OT but I can't resist this.

I hope Wayne is watching considering he was telling us that Afghanistan is "stable". Either he was telling porkies, or he was lied to by the Americans. My money is on the Americans – they usually treat their allies like mushrooms. Perhaps in future we'll maybe not join in with American adventurism?

Jens Meder said...

I don't know about the non-identified (imaginary?) "financial section's twisting labyrinth to the Capitalist Minotaur's hidden lair(?) -
but it would be very useful to clarify by discussion right here and now: -

Would the country as a whole benefit more from Grant Robertson borrowing for needed and useful infrastructure construction and maintenance (especially in view of our still increasing population numbers) -

or from borrowing mainly for more consumption on welfare ?

Is not debt repayment for profitable investment wealth creative for all, including the borrower, with the resulting increase in taxation revenue delivering affordability of increasing expenditure on welfare -

whereas does not increased borrowing for more welfare - benefit only the limited number of industries catering for the increase in welfare consumption (and possibly encourage more people to qualify for welfare payments?) - at an increasing impoverishing - not
wealth creative - cost to the non welfare dependent proportion of population ?

Jens Meder said...

Patricia - can you please give us an example of a sovereign country with a floating exchange rate and without a compulsory savings or austerity rate having developed it without borrowing ?

Patricia said...

Jens. Start reading MMT in order to understand how the monetary system works, it is NOT how we are told

Jens Meder said...

Patricia - What is MMT and where is it available ?

Patricia said...

Google Bill Mitchell, Stephanie Skelton et al.. Many wonderfull lectures on Modern Monetary Theory on YouTube.

sumsuch said...

I appreciated Grant's expression of love for the people on the pub programme. Necessary, but it turned out he hadn't read Chris's posts. Everything but willingness to talk for the people. Suspicious of people who believe acting for the people can be done 'easily'. Grant and Jacinda's ease. Twerps.

Jens Meder said...

Dear Patricia.
The Modern Monetary Theory of Bill Mitchell is just a resurrected version of debt free Social Credit.
Would not even you agree, that just printing money does not CREATE wealth, but only transfers it from the value of the currency ?
Since it is practically universally accepted, that a mild rate of inflation is acceptable and even desirable as a "tax" to discourage excessive hoardings of money, the issue of debt free money is very limited before it starts hurting the economy.

In the Soviet Union the govt. raised additional money through bonds etc. from the public and tried to control all the prices and costs.
It also practiced the printing of money wherever there was a shortage along the following line of justification shared apparently also by the MMT and you, Patricia(?) :

When you build a factory on borrowed money, then why repay the debt when the factory still remains standing even if you don't repay the debt ?
So, why not just print the money which does not have to be repaid to anyone ?

The result was, that despite inflation hidden through repeated currency devaluations, money as a reliable measure of value and means of exchange in the Soviet Union became so useless, that the country was moving towards a barter economy where even factory managers had to resort to officially illegal barter (black market?) deals on the materials they needed to meet their production targets.

A pity that cannot be debated with Bill Mitchell anymore.