THERE’S NO DISPUTING the shock-value of the statistics assembled by Bernard Hickey in his latest Kaka podcast. What they show is that, in responding to the Covid-19 pandemic, the New Zealand Government transferred vastly more money to the business sector and homeowners than it did to beneficiaries and the working poor. Or, as he puts it: “The Labour Government, supported by the Greens, presided over policies that accidentally on purpose engineered the biggest transfer of wealth to asset owners from current and future renters in the history of New Zealand.”
Well … maybe. The problem with statistics is that they are generally presented without regard to context. To be honest, that’s probably a good thing. I don’t think it would be all that helpful (or ethical) for the Department of Statistics to encase its data in a carapace of tendentious ideology. In the 1950s American cop show, Dragnet, the hero’s signature line was: “Nothing but the facts.” That sounds about right to me.
So, let’s not argue about the facts. I’m sure a financial journalist of Mr Hickey’s experience has got the numbers right. What I’m much less certain of is whether his interpretation of the facts makes a great deal of sense.
In a nutshell, what Mr Hickey seems to be saying is that in an unabashedly capitalist nation, a government elected on the strength of middle-class (i.e. homeowners) votes, made sure that the massive transfers of cash required to keep the economy afloat in the midst of a global pandemic went to capitalists, and the people whose votes it really, really, really didn’t want to lose.
Well, duh! Who would have thought it?
And, with all due respect to Mr Hickey, it is nothing short of facile to evince horror and outrage that the perpetrators of this exercise in maintaining class (and, let’s be honest, racial) privilege were Labour and Green politicians. Labour gave away its historical role as the workers’ friend in 1984 – nearly 40 years ago. What’s more, since the introduction of “Rogernomics”, the Labour Party has occupied the Treasury Benches for a total of nearly 14 years. In all that time, it has made no serious attempt to dismantle the neoliberal regime it created. Expecting Jacinda Ardern to behave like Mickey Savage is just silly.
Especially when you consider the makeup of New Zealand’s House of Representatives. Labour, an unabashedly capitalist party, holds 65 seats. National, another unabashedly capitalist party, holds 35 seats. Act, a fanatically capitalist party, holds 10 seats. The Greens, supposedly not a capitalist party, but one which has, to date, done nothing to suggest that it is an anti-capitalist party, also holds 10 seats. Which leaves the Māori Party, an ethno-nationalist party which appears to be okay with capitalism – but only if it’s Māori capitalism – with just 2 seats.
The question I would put to Mr Hickey is: How would he have persuaded this House of Representatives, composed more-or-less entirely of MPs committed to the preservation of New Zealand’s capitalist system, to adopt policies which differed in any meaningful way from those actually implemented by the Labour Government of Jacinda Ardern? Not forgetting that for the first few months of the Covid-19 pandemic, the Prime Minister was dependent on the support of NZ First – a party convinced that capitalism could, and should, do better.
Presumably, Mr Hickey believes that New Zealand’s parliamentarians, alerted to the sheer bloody inequity of their Covid response, should have felt obliged to come up with something much kinder and fairer.
But why would they feel obliged to do that? Just recently I learned that in the United States the friends of capitalism (about 90 percent of the country!) not only believe in the doctrine of laissez-faire – French for letting the market rip – but that they also subscribe to what they call “lazy-fair”. Apparently, because so many of the underprivileged are lazy, it’s only fair that they’re poor. I know, I know, it’s an awful thing to say – although I’m sure it raises a good guffaw among the Country Club set. But, you know what? Although they would never repeat such an awful “joke” out loud, there are plenty of Kiwi MPs (some of them in the Labour Party) who subscribe wholeheartedly to the underlying philosophy of the “deserving” and “undeserving” poor.
Even worse, there are hundreds-of-thousands of ordinary Kiwi voters who subscribe to exactly the same philosophy – with bells on. The awful truth about New Zealand politics is that practically all of our political parties are just too scared to suggest anything like the massive transfer of wealth to the “current and future renters” whom Mr Hickey clearly believes the Government’s Covid response should have targeted.
The only way such a transfer could possibly have eventuated is in a political context dominated by the electoral success of a party aggressively representing the interests of the working poor and beneficiaries. Assuming such a party drew the bulk of its support from the 700,000 eligible voters who declined to participate in the last election, its impact on what politicians considered both possible and acceptable would be huge.
The problem, of course, is that every party which has tried to mobilise these voters has failed miserably. The Internet-Mana Party may have had a brilliant manifesto (so brilliant that I voted for it!) but its share of the 2014 Party Vote was a demoralising 1.42 percent.
In other words, if all the “current and future renters” had voted for Internet-Mana in 2014, its ideological and political influence would have made the Covid-19 response delivered by Labour over the past 21 months unthinkable.
And that’s what I mean by statistics shorn of context not amounting to very much. For the only people who counted – the people who voted – Jacinda Ardern’s and Grant Robertson’s Covid response was good enough to see them returned to office with 50 percent of the Party Vote. That Mr Hickey should be surprised that the values of politicians tend to reflect the values of their supporters is, itself, surprising.
If he wants a revolution, Mr Hickey will need to do more than excoriate Labour and the Greens on Substack – he’ll need to organise one.
This essay was originally posted on The Daily Blog of Thursday, 27 January 2022.
28 comments:
(and, let’s be honest, racial) privilege
Yes there is a Chinese New Zealander in Christchurch with 1000 houses (I was told by a tradie). Chinese on Public Address said "Chinese just f'n love buying houses. It's like food to them"
What do you say to all those working class boomers who made it on to the housing ladder?
Working class tend to be in the marginal areas that are mostly rentals or "the tacky end of the market" (Ollie Newlands).
MJ Savage said "New Zealanders shall have beauty and sunlight and space" the boomer Labour said "New Zealanders will have diveristy "
Labour is too ideologically possesed to deal with tenants who threaten to slit the other occupants throat. Instead they offer counselling.
There are actually two separate effects in play. The first is the direct payments by government, which includes the increase in size of the public sector and the second is the role of the Reserve Bank. It is the latter that has had the biggest effect on property prices and hence inequality.
To deal with the role of the government and the payment of $20 billion to private businesses. Over $12 billion of this was wage subsidy. For that sum private businesses were only the conduit. It all had to be paid out to employees, and in fact to qualify businesses had to top it up to 80% of the wage. Most of the businesses getting the business support payments were in dire straits, many in fact failed.
There were businesses that profited during the lockdowns, such as supermarkets and their suppliers, as well as all basic services (electricity, telecom, etc). Banks did well (more on that later) and of course all forms of online services. I imagine it is in these sectors where business profits increased.
The size of government has also increased. The core public service (which does not include teachers, health workers, police, NZDF, but it is the classic civil servant) is 50% larger than 4 years ago and their incomes are up by an average of 25% over the last four years. In part this explains the permanent deficit situation the government has got itself into. But it does mean nearly 100,000 civil servants have done rather well in the last few years and they are prime candidates for banks to lend to. Along with the other 200,000 public servants such as teachers and health workers. These are the safest people for banks to lend to, and they really pursue them.
The second, and much more important effect on inequality, is the Qualitative Easing (QE) by the Reserve Bank. Done in concert with all other western Reserve Banks. QE obviously has the support of the government, but the government does not drive it.
QE has had an enormous effect on asset prices. Effectively QE means the commercial banking system is able to make much bigger loans at much lower interest rates. In fact the lowest interest rates in over 150 years. House prices have increased by at least 30% in just two years. The inequality gap has really opened up. All house owners have had the wealth effect. However, anyone who is a renter has missed out and relative inequality has really opened up. The bottom 30% of the population who are permanent renters are much poorer, at least in a relative sense, than two years. It is also much harder for new home buyers to get into the market, especially if there is no Bank of Mum And Dad. In short, all parents who are renting are not able to perform this role.
Reserve Banks would generally acknowledge they overshot with QE, though it is worth recalling that in March and April 2020 the big fear was the collapse of the housing market. QE was to avoid that, which it did, in a rather spectacular fashion. Of course QE is now over. In fact this year interest rates will rise substantially and lending will be restricted. That will cut the top off the housing market, in fact I expect house prices to subside somewhat (10% or so) and remain flat for some years, that is between 2 and 4 years. That has happened a number of times before in my lifetime. Big surges in house prices, followed by some years of stagnation, especially if there is a big outflow of population to Australia, which seems to be starting.
Probably the least endearing national characteristic of New Zealanders, it their mean-spiritedness. That is entirely consistent with Kiwi generosity when they see an obvious need. But... well.
It is interesting to find a more-or-less public figure who also voted for the Internet-Mana Party. I was REALLY, REALLY hacked off that even the Greens connived with Labour, National, and Uncle Tom Cobbleigh and all - along with the ideology-drenched 'news' media - to game the system to shut them out. True, Kim Dotcom acknowledged that he was probably a deal more poisonous politically than he realised (but I believe him to have been the subject of that mean spiritedness of which I earlier mentioned). But I have a loathing for the manner in which politicians are able to subvert the will of the people - Democracy, hah! - to their own advantage. Had that Party a constituency candidate in this part of the world, that candidate would have got my vote in spades.
'It is not the voter who counts,' quoth Josef Stalin, 'but who counts the votes.'
New Zealand is a Socialist country, all right: Socialism for the rich.
Cheers,
Ion
How can any rational person be anti-capitalist, when without advanced capitalism the only way of survival would be in self-sufficient primitive capitalism based peasantry where employing someone to help you would be prohibited as it was in the Soviet Union ?
Then freedom based democratic private capitalism is only replaced by State monopoly capitalism, with workers becoming practically the same as e.g. slaves dependent on slave-owning capitalists without the right to build up their own capital ownership and free themselves from exploitation by a capitalist monopolist.
The way out of poverty for the poor is not in more poverty creative anti-capitalism, but in moving towards becoming (at least) "middle class level" capitalists themselves.
Labour has already initiated a helpful effort in this direction through the NZ Super Fund and KiwiSaver, and the future of constructively progressive policies is towards achieving at least a meaningful level of capital (i.e. wealth) ownership by all citizens eventually.
I just went to check the red bin. I noticed rubbish blowing about. Just along a row of bins and a small one was overflowing and the lid wasn't down. I took some out: diapers and wet stuff with maggots.
Just look at what is available in apartments. Apartments are like diamonds. Just down the road from me are some new ones but they run north south (wouldn't want to get too much sun on the furniture would you?). The "step up the ladder" sinks lower and lower into the dank sewer of life.
Mr Hickey suggests a wealth tax as a way of clawing back the billions given to business and homeowners during the pandemic. Best of luck with that idea, unless of course it was aimed solely at the landlord class of the 'nouveau riche' who have been encouraged to own rentals predominantly as a get rich quick scheme for all involved except the poor renter.
I would suggest in today's political climate the most revolutionary policy a govt could mandate would be to either put a stop to multiple rental property ownership or tax it out of existence. Then introduce a fixed low interest mortgage rate for first home buyers and the capitalising of benefits to generate a deposit on a home. That of course would mean regulating the banking sector and enabling the timely building of houses, a modern day revolution to be sure.
Perhaps Mr Hickey is an accidental revolutionary.
"How can any rational person be anti-capitalist, when without advanced capitalism the only way of survival would be in self-sufficient primitive capitalism based peasantry where employing someone to help you would be prohibited as it was in the Soviet Union ?"
You keep saying this Jens – you have been saying it for years now ad nauseam. And yet you have not provided one skerrick of proof. In fact questions are usually met with questions. Might I suggest it's time to put up or shut up?
First – define what you mean by "advanced capitalism".
Second – give us a reference or two, because you saying it doesn't make it true.
The Archduke is correct. Anyone who's read history, particularly memoirs of prominent New Zealanders will find that there has always been – probably inherited from the Brits – the mean-spirited idea that there are deserving and undeserving poor. Christ – almost every time Brendan writes about the poor he makes this distinction.(Well in fact, I'm not even sure that he believes there are deserving poor.) And he perpetuates a number of other falsehoods as well.
Coupled with this, what used to be extreme right-wing views about the poor are now being mainstreamed, particularly in the US. I posted a quote from a US politician about not feeding the poor little while ago. I posted it here and on another – US – political blog. Someone replied that they thought it was a quote from the 1950s or 60s, but found that the good senator was in fact in office less than 20 years ago. I guess some things never change.
Thanks Wayne, it's great to read informed opinions. I read this same essay over on The Daily Blog, some seriously wound up types on there hammering away on their spittle flecked keyboards.
Just one thing, the interest rates (globally) over the past decade or so are the lowest in the 5,000 year recorded history of money. Since Babylonian times!
Asset price inflation is supported by the massive increase in credit/debt. Normally, high private borrowing leads to bank credit creation, with the governments stepping in during downturns to increase the money supply by borrowing and spending. With both high private and government borrowing the resulting asset bubble quickly gets large and dangerous. Reining it in will have serious consequences for those most vulnerable and for pension funds etc.
I like Bernard's pronouncements of reality, and, your descriptions of reality possible. He is talking truth about the situation, isn't he? Talking, persuading, is the dead art of the Left. Good folk on the Nat Rad discussion at 4 today in that respect. I get inspired when I hear Hickey or Sue whatshername. Jacinda and Robertson are chemically treated 'Left', dead on delivery.
Inspiration is the spirit of the people's cause, hence your appeal. I see your realpolitik from the years of fruitlessness, but are we wrong about the ends? You're sour about Hickey but not Mike Moore described as a 'working class hero', the guy running The Standard nor the guy commenting for the Left on Nat Rad's Monday morning politics discussion? Don't put the means before the ends -- you are a talker first, and that's for the truth required at the end. The 98 % of the electorate is going straight over a cliff in my lifetime.
As you say "a party aggressively representing the interests of the working poor and beneficiaries" would, and did, struggle to get much support. I don't know that even a majority of the 700K non voters would consider themselves in that category; the main parties don't have much electoral incentive to prioritise that sector.
There are many people I know, intelligent people from successful families that have fallen into poverty, often with poor health and relationships. Why do some people end up making such a mess of their lives? It's hopelessly naïve to assume that all bad outcomes are the result of systemic or cosmic injustice. It's obviously and demonstrably wrong, just as it's wrong to assume that all the successful are justifiably successful. Both beliefs are wrong, it's way more complicated than that. Given that the state can never properly separate the just from the unjust it must act with caution in it's efforts to level the outcomes. Overly incentivising failure and penalising success is a seriously bad idea.
Kat Your ideas yes.
That low interest mortgage rate would be good. I had one of those. We have tried in this country to provide free education to help everyone take part in society and be suitable to hold down jobs. Why not provide everyone with a low interest mortgage after they have established a regular savings for two years, both through a small automatic payment from their wage and small regular payments from net earnings. Showing that people are willing and ready to manage their lives and finances ti be offered the advantage of a first-home low interest mortgage.
The other thing is having regular child payments to parents, dependent on them both attending two workshops in a year at suitable times, even from travelling tutors going to their area. These educators would have a medical and paediatric training and just talk about the problems likely to impact on parents. Keep in touch with these important citizens. Money is just the icing on the cake, wealthy people are a minority we know; underneath is the foundation of society. The parents would be rewarded for attending, each year and getting age specific backgrounding and there would be a talk line for when stressed. When talking through the problems with someone, often the solutions become clear to the person without any advice being needed. It's often just a wise, kindly, listening ear with suggestions, that clears the way to understanding.
Perhaps one way to alleviate the problem which would have support of everybody, is to make a person who has dependent child/ren, income tax free. A country that issues its own currency and which is not tied to any other currency can do that. Running a country is not dependent upon taxation. That belief is just another way of controlling the existing capitalist system
Guerilla Surgeon.
The beginning of capitalism with saving seed grain for a crop next year - whether bartering or not products with your neighbors - is obviously primitive capitalism (i.e. saving for security reserves, trading and investment), which is becoming more advanced with urbanization and what we have now - industrialization and commercialization and trading in practically everything, including labor power and time and property.
If that is not an adequate answer to your question, Guerilla Surgeon - then please refute it and tell us what has not been explained - without dodging the issue and not asking for more clarification about what looks false or is not clear to you.
So now please answer my question - how can you imagine life and survival without capitalism ?
Yens murder, as long as it's murder for employees I'm not for it. It's the end of resources. We knew in 1990 about climate change but the stupid capitalists succeded with bullshit and carried on into the subjective desert.
If only we'd mobilised then. But democracy is about the immediate.
Let the remaining democratists take over.
Jens. What you describe as primitive capitalism – most people wouldn't even think was capitalism. So you are basically defining it to suit yourself.
The most stable and long lasting form of society was hunter/gatherers, which lasted for at least 100,000 years until we discovered agriculture. After that, maybe some form of monarchy/feudalism. That was very stable, without a great deal of capitalism, and lasted for at least a thousand years.
Capitalism in the form we have at present seems to be destroying itself already. The only thing I think will enable us to survive would be a post-scarcity society, and that would pretty much eliminate capitalism.
Patricia - if "running a country is not dependent upon taxation"- then please explain who would feed all the bureaucrats and pay for all the govt. services and the cost of law and order ?
Even Social Credit would collapse in run-away inflation and widening poverty. without adequate provisions for debt repayments.
If e.g. North Korea has no income tax, then are their citizens not practically slaves, with everything they produce belonging to the state and they getting paid to buy the rations the state manages to get produced for that purpose beside their other priorities, like weaponry or impressive (profitable?) city buildings ?
So, citizens have to contribute even in "anti-capitalist" North Korea for whatever govt. goods and services available for them, and their govt.'s ambition for more capital wealth and power.
And tell us, if there was no accumulation (savings) of capital wealth, from where could any available "social credit" come from ?
Guerilla Surgeon - Well then - what do you call the basic fundamental economic function of having to save or contribute at the expense of hand-to-mouth consumption potential to create anything not for immediate consumption, as it has to be done for agriculture, without which there would be no survival for our current millions of people ?
And was it not population growth induced poverty at the hunter-gatherer stage of human life which forced people to fight each other for territory, or more constructively, initiate capitalism with agriculture?
Please describe how the "post-scarcity society" would work without capital(ism) ?
It seems to me it would require a diminishing population with relatively diminishing labor needs for servicing, so that with highly capitalized productivity by machinery there is no scarcity of goods for human consumption after adequate capital maintenance costs (savings) have been deducted ?
Or should we revert to the hunter-gatherer stage, requiring quite a massive reduction in population, and doing away with a lot of pleasures available even to the poorest of us at present? ?
Or what other way could there be for it, Guerilla Surgeon and other
1. I call it caution. In no way is it capitalism, and no scholar would describe it as capitalism.
2.Certainly agriculture allowed more population than hunting and gathering. At the expense of worse health I think, but if you can provide some evidence of hunter gatherer societies being unstable please do so.
3. I'm not an expert on post-scarcity society, maybe you should read some science-fiction. But as I understand it it means that we do more with less, things are fabricated automatically without much in the way of human contribution, people are given a basic income, and no one has to do without the necessities and some luxuries. And I don't see why it would require a diminishing population. Please provide some evidence of this if you have any.
Dere's this thing called reality, Jens. 'Other'.
I can't see better than the same as the democratic strength of the WW ll extreme socialism. Otherwise we'll be eating each others livers as per dog eat dog. The rule of the people is the only way I'm happy to go down. It's called our NZ egalitarianism. If you don't know it, look it up.
I have no respect for you. All my relatives are syncretic, never willing to admit wrongness, ever. Fascists, so.
This is our only salvation. Though the blogholder ...
Jens, who do you think issues the money for the people to pay money to the Government. Just think that through.
Patricia, sumsuch – I'm not sure it's worthwhile responding to Jens. Like most conservatives who comment here he is not interested in talking about the topic at hand so much as pushing his barrow. They don't want the so-called "free exchange of ideas" – they just want to "own" the libs and get on their hobbyhorses.
Couple of examples, the usual suspect was bitching about Maori words on TV and radio. I told him it wasn't a problem, I gave him and example of a real problem that perhaps he could turn his mind to. His next comment was something like:
"That's terrible" ... "now about those Maori words on television."
Someone else whose name I have quite thankfully forgotten asked me to read/watch some right-wing "thinkers", which I faithfully spent some hours doing, wrote a lengthy critique – to which the answer was "meh" I don't believe you.
Brandolini's law suggests we are pissing into the wind here. I just read an interview with someone – a fairly reputable journalist I believe, who claims that politics has been "narrowed down". In other words it has been reduced to complaints about irritants. And I think this is true. Very few people discuss the big issues anymore, if it's not Maori words on television, it's CRT, or "political correctness" or something like that. Even the purported big issue of freedom of speech is narrowed down to "my people are being censored" (usually by people who have every right to, and we usually hear a hell of a lot from the actual "censored" people about it.).
I probably made a mistake myself in responding to Jens, but I really get irritated at his barrow pushing – without references or anything other than bald assertions. And he obviously hasn't got a clue what he's talking about. But he will talk. I apologise – my bad. :)
O.K. Guerilla Surgeon.
1.- Please define your understanding of caution, if it is not the following on the economic level - saving up reserves "for a rainy day", and for profitable investment, and in very risky cases "gamble only what you can afford to lose" - and borrow only what you are prepared and able to repay ? What else is included in your concept of caution ?
Printing money as apparently recommended by Patricia ?
2.Hunter- gatherer societies went "out of fashion" because of the increasing caution needed to overcome the increasing poverty through increasing population pressure.
Hunter-gatherers have survived well where they have kept their population densities low.
3.- Yes, there is a future through doing more with less, i.e. consume less in relation to what you save for wealth and machinery ownership to raise our productivity.
And don't you know Guerilla Surgeon, that when you become a parent, you and society have to do with less consumption in order to raise the new citizens until we have created the extra investments for them to become productive ?
Therefore - for the "caution society" to succeed, should not some more widening caution be built into our current society through systematically raised collective and personal long term (retirement)wealth ownership creative savings rates to keep widening prosperity sustainable and more wealth transferred from parents to children and no children born into poverty eventually ?
If you agree at least in principle wit this, we could start talking about policies to achieve it.
Or - what is your alternative ?
Sumsuch - what are you actually saying ?
Is it not reality, that it was National and Communistic Socialism, which in their totalitarian - fascistic - way were the real war mongers and murderers (National Socialism) and most cruel citizen exploiters and murderers (State Monopoly capitalism under "communistic" Socialism)?
Under NZ egalitarianism I am only trying to explain by measurable examples that labor alone without saving does not create wealth beyond hand-to-mouth short term survival - and how to overcome poverty socio-economic polarization into Haves and Have-nots.
I would not need to keep repeating my arguments, if instead of ignoring them and not wanting to explain where I am wrong, we had a rational, non-emotional debate on the sense or nonsense, or pros and cons of what I am trying to raise attention for discussion.
No here is another opinion - that under a 100% of citizen Ownership Democracy - tribal, cultural and linguistic differences and disagreements would become less divisive than what they are now - nationally, and internationally, if the 100% citizen Ownership (Cautionary?) Society vision spreads to other countries.
Patricia - since banks issue only credit, I think it is the Reserve Bank - on behalf of govt., that issues the money in which people pay taxes to govt.
But money especially nowadays where it is not based directly on gold anymore, is only a token of wealth, and issuing or printing it does not create more wealth or gold, but only devalues its own value.
If that was not so, then there would not be any poverty anywhere, because it does not cost much to print money.
Can you understand that, Patricia ?
Keep up your truth Guerilla, it's near to mine, Chris's and 'the'. Let over-regular publications not lead us away from the overhead picture our David Low captured prior to the last crisis.
It's obvious to me the disaster approaching without commanding forces for reason, which can only come from the people longterm (though China is doing a good job immediately I admit).
'Immediate' maybe should be put on our species gravestone. Remembering my ancestors' eternal toil I'm not embarrassed to scintillate in this slight moment of idle pleasure. The next generation will burn alive for their self-absorbed individualism. No fault ascribed to them in particular.
Labour is learning how to command, despite themselves. They still don't know how to persuade, having it so good for themselves as individuals. Having not the heart of we last'35 social democrats. They tangle around, governed still by fucken focus groups.
To be honest, Chris, you're bilious, full of your defeats. Understandable. You put the 'art of the possible' first, just, like, the Clarkian Labour Party that rules us to this day. Understandable, but none of us like them, it's a condemnation of you. What they missed was 'can' can be pushed. You have the heart they don't. Do you also rely on focus groups?
There is a gap between 'possible' and 'necessary', where a talker like you comes in. Where a rational Left talker comes in. That's your role. Not lowering your sights for the possible, whatever that may be.
No need to publish this.
Thanks, Chris. You don't know how important you were to our right cause in the 90s and norts -- Cicero or Demosthenes. You're a kind person. Like a lot of Lefties I speak my truth from no personal comfort.
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