Transformational Politics Demands Transformational Economics.

Change Agents? Grant Robertson’s economic orthodoxy bodes ill for the expectations of Labour, NZ First and Green Party followers that Jacinda Ardern will, indeed, preside over the “transformational” change promised in her new government's coalition agreement.

LABOUR’S ECONOMIC ORTHODOXY presents its supporters with an A-Grade conundrum. If all you ever do is all anyone has ever done, then what are the chances that anything will ever change? Something in the Marxist nucleotide of Labour’s DNA continues to carry forward the message that economics and politics are inextricably linked. Stuff up the former and the latter will swiftly follow suit. That being the case, Grant Robertson could be Labour’s worst enemy.

Not that he should feel too badly about that, because Labour finance ministers have a well-established historical reputation for being their party’s worst enemies.

One has only to think of Philp Snowden, Chancellor of the Exchequer in Britain’s first and second Labour governments. While no one could fault the old man’s dedication to Labour’s working-class voters, his utterly conventional economic ideas left him helpless in the face of the Great Depression. In the words of his biographer, Keith Laybourn: “He was raised in an atmosphere which regarded borrowing as an evil and free trade as an essential ingredient of prosperity.”

It was Snowden’s unwavering faith in these nineteenth century liberal orthodoxies that broke his party and discredited his government. The people who paid the price for their Chancellor’s intellectual rigidity were (as is so often the case) his beloved working-class.

Things might have gone the same way here in New Zealand just a few years later had the proposals of Labour’s economically orthodox leaders (Michael Joseph Savage, Peter Fraser and Walter Nash) not been voted down by the more radical members of their party’s caucus.

It was thanks to this latter group that Labour went into the 1935 election with an economic policy calling for the “immediate control by the state of the entire banking system; the provision of currency and credit to ensure adequate production, guaranteed prices and wages; readjustment of all mortgages” – along with a policy of state-fostered industrialisation which, today, would be described as “economic nationalism”.

How very different these policies were from the policies of Roger Douglas, the Labour Finance Minister who championed the same laissez-faire economic policies implemented by Philip Snowden between 1929 and 1931. “Rogernomics” radically transformed New Zealand’s economy and politics – and very nearly destroyed the New Zealand Labour Party!

The two politicians most responsible for rescuing Labour from political oblivion were Helen Clark and Michael Cullen. In a double act of extraordinary sophistication, Clark and Cullen kept hold of the political reins for nine years by cleverly masking both the true extent of their government’s economic success, and the political opportunities it opened-up.

As Finance Minister, Cullen proved a master at making his burgeoning revenue surpluses, which might have funded a much more ambitious social-democratic programme, disappear.

Some of Cullen’s billions were invested in the special superannuation fund that still bears his name. Even more went into Working for Families, the massive employer subsidy which Cullen introduced in preference to allowing the trade unions to extract the money from corporate shareholders. Most of Cullen’s surplus billions, however, were directed towards paying down Crown debt.

The opportunity cost of these fiscal diversions would only become apparent towards the end of the next decade, when New Zealand’s physical and social infrastructure began to, quite simply, fall apart.

That Michael Cullen has for many years been Grant Robertson’s political patron and mentor bodes ill for the expectations of Labour, NZ First and Green Party members that Jacinda Ardern will, indeed, usher in the “transformational” change promised in the new government’s coalition agreement.

Even before he received his ministerial warrant, Robertson was at pains to bind Labour to precisely the same diversionary economic strategies pioneered by Cullen.

A Finance Minister who repeatedly swears allegiance to his own “Budget Responsibility Rules” is unlikely to champion the sort of creative and progressive economics that makes for creative and progressive politics.

Unless, like Savage, Fraser and Nash; Ardern, David Parker and Robertson are reined-in by a Labour caucus determined to fulfil their government’s “transformational” ambitions, then the long-deferred renovation of New Zealand’s disintegrating institutional and physical infrastructure will not receive the resources it requires.

A transformational government cannot be brought into being except by means of transformational economics. For all his faults, Roger Douglas understood this fundamental proposition. Progressive voters need a Finance Minister whose economic policies are as bold as his government’s political promises.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 15 December 2017.

Yanis Varoufakis Would Tell Grant Robertson That Neoliberalism’s Rules Are For Breaking – Not Keeping.

 Progressive Economist: Yanis Varoufakis is one of neoliberal capitalism’s most outspoken and acute critics. Winston Peters might have declared his determination to give capitalism a human face, but Varoufakis would likely argue that the necessary transplant operation would entail far more effort than it was worth! Hardly surprising given his belief that the leading capitalist nations have been waging an unrelenting war on their poorest citizens for the past forty years.

IMAGINE THE REACTION if Finance Minister, Grant Robertson, announced a broad-ranging, government-sponsored seminar on progressive economics chaired by Yanis Varoufakis. Vilified and demonized by EU bankers and politicians for his heterodox economic ideas, Varoufakis resigned as Greece’s Finance Minister in 2015 rather than impose yet another of the European Central Bank’s crushing economic diktats on his impoverished homeland.

Inviting Varoufakis to chair a seminar on progressive economics would constitute the clearest possible proof that the Labour-NZ First Coalition’s promise to be a “transformational government” was genuine. International and domestic market reaction to such an announcement would, however, be instantaneous and extreme. New Zealand’s government would be portrayed as having taken leave of its senses.

And, in many respects, the markets would be right. Varoufakis is one of neoliberal capitalism’s most outspoken and acute critics. Winston Peters might have declared his determination to give capitalism a human face, but Varoufakis would likely argue that the necessary transplant operation would entail far more effort than it was worth! Hardly surprising given his belief that the leading capitalist nations have been waging an unrelenting war on their poorest citizens for the past forty years.

Writing for the latest newsletter of Project Syndicate, Varoufakis marvels at the “bourgeois rage” directed at the “militant parochialists” responsible for Brexit and Trump:

“The range of analysis is staggering. The rise of militant parochialism on both sides of the Atlantic is being investigated from every angle imaginable: psychoanalytically, culturally, anthropologically, aesthetically, and of course in terms of identity politics. The only angle that is left largely unexplored is the one that holds the key to understanding what is going on: the unceasing class war unleashed upon the poor since the late 1970s.”

As evidence for his class war claim, Varoufakis presents the following stark statistics:

“In 2016, the year of both Brexit and Trump, two pieces of data, dutifully neglected by the shrewdest of establishment analysts, told the story. In the United States, more than half of American families did not qualify, according to Federal Reserve data, to take out a loan that would allow them to buy the cheapest car for sale (the Nissan Versa sedan, priced at $US12,825). Meanwhile, in the United Kingdom, over 40% of families relied on either credit or food banks to feed themselves and cover basic needs.”

Unleashing Varoufakis on the equivalent New Zealand data would doubtless produce a series of equally startling conclusions. Which is why Grant Robertson, himself, would, almost certainly, resign rather than invite someone like Varoufakis to draw the obvious policy conclusions from the last 30 years of class war in New Zealand – especially since many of that war’s most destructive campaigns were conducted under the generalship of Labour Party politicians!

Robertson’s pitch to New Zealand’s capitalist class is very different from Varoufakis’s unabashed “economic humanism”. Only this morning, (11/12/17) speaking to the Auckland Chamber of Commerce, Robertson declared:

“For us to keep being able to afford the policies necessary to achieve higher living standards we must remain fiscally responsible. It goes without saying that a Government that presides over high deficits, increasing debt, or a shrinking economy could not provide the quality public services that New Zealanders want and deserve. That is why we have developed and committed to our Budget Responsibility Rules.”

Which is precisely the sort of language that Varoufakis encountered when he travelled to Brussels on his doomed missions to secure a more rational approach to managing the consequences of Greece’s crippling indebtedness. That Robertson shows every sign of being as committed to following “the rules” as the European Central Bank’s pitiless bailiffs, strongly suggests that, even if he could, somehow, be prevailed upon to organise a seminar on progressive economics, and invite Varoufakis to chair it, the maverick Greek economist would feel obliged to decline.

The former Greek Finance Minister’s own experience tells him that “the rules” formulated by the world’s economic and political elites; “the rules” bankers and politicians consider themselves bound in solemn duty to uphold and enforce at all costs; are, in reality, no more than “the rules of engagement” in neoliberal capitalism’s “unceasing class war” against the poor. If Varoufakis was ever to accept an invitation to chair a government-sponsored seminar on progressive economics, it would only be because he had already been convinced, by their actions, that the politicians asking him to elaborate a more “transformational” political economy were rule-breakers – not rule-keepers.

This essay was originally posted on The Daily Blog of Tuesday, 12 December 2017.

Warning Signs: The Briefings To Incoming Ministers Reveal A Country Gripped By Multiple Crises.

 Ominous Warnings: The Briefings to Incoming Ministers, released this week, paint a bleak picture of the previous government's consistent under-funding of public services. The veteran political journalist, Richard Harman, puts it like this: “What the Government is confronting is two separate pressures on its spending – one deferred spending from the austerity imposed by the last Government as a response to the GFC in 2008 and a new force in the form of a rapidly growing, ethnically diverse population.”

THE BRIEFINGS TO INCOMING MINISTERS (BIMs) have laid bare the accumulated failures of nine years of National Party Government. In sector after sector senior civil servants paint a grim picture of incompetence and neglect. The clear message which emerges from this sorry record is that New Zealand has been the victim of a nine-year austerity programme that nobody – other than the poor – seems to have noticed. Taken together, the BIMs offer stark proof of just how deep the class divisions in this country now run.

The veteran political journalist, Richard Harman, puts it like this: “What the Government is confronting is two separate pressures on its spending – one deferred spending from the austerity imposed by the last Government as a response to the GFC in 2008 and a new force in the form of a rapidly growing, ethnically diverse population.”

One of the reasons the three parties making up the present government were able to secure the votes necessary to win power was because the National-led Government was no longer able to confine the effects of its austerity programme to the poorest – and brownest – working-class communities. The effects of prolonged underfunding were beginning to be felt in New Zealand’s leafy suburbs as well as in its meanest streets. More and more people shared in the common agreement that something must be done.

An understanding that a great deal more money would have to be raised and spent, should have been at the heart of that agreement – and Labour should have been the party that put it there, imbuing it with the moral and intellectual force required to overcome the Right’s inevitable resistance. This had been the strategy of the Labour Party in the early 1930s, and it succeeded brilliantly. Labour took power in 1935 with a comprehensive and progressive manifesto, backed by the irresistible weight of an informed and impatient public.

Sadly, this was not the case in 2017.

Rather than build a broad consensus around the need for a substantial increase in public expenditure, funded by an equally large increase in taxation, Labour set out to convince voters of the exact opposite. No increase in personal income tax contributions were necessary, they were told, not even from the very wealthy. Corporate taxation, similarly, would not need to rise. The rate of the Goods and Services Tax could remain fixed at 15 percent. There would be no Capital Gains Tax, Land Tax or Inheritance Tax. Labour was at pains to let people know that it intended to cleave faithfully to the broad fiscal and economic settings bequeathed to it by the outgoing National Government. Gusts of rhetorical stardust notwithstanding, the new Finance Minister, Grant Robertson, was determined to run a tight fiscal ship.

In essence, Robertson’s strategy was the same as Steven Joyce’s, his predecessor: keep the middle-classes happy. National had done it with rock-bottom interest-rates, and by allowing the value of their personal assets to soar. Labour hoped to keep them happy with promises of free tertiary education and affordable homes for their kids; decent pay raises for teachers, nurses, hospital doctors and civil servants; and the gradual upgrading of New Zealand’s ailing infrastructure as and when finances permitted. For the working-class and beneficiaries there would be lots of smiles and hugs – and bugger-all else.

But, as Harman puts it on Politik: “There is a subtle but strong message running through the Briefings to Incoming Ministers […] which comes near to putting a price that the Government is going to have to pay to implement its promises.”

Unsurprisingly, given the neoliberal predilections of senior Treasury officials, the price envisaged is a capitulation to the idea of opening-up the renovation of New Zealand’s public services and infrastructure to private investors. Robertson’s principal advisers are steering him, very quietly, in the direction of Public-Private-Partnerships. In this they will be greatly assisted by Robertson’s personal aversion to unorthodox economic ideas, and by his determination to stay within the bounds of his “Budget Responsibility Rules”.

No matter that New Zealand is short 75,000 houses, or that 700,000 Kiwis cannot be sure of the purity of their drinking water. Too bad that there aren’t enough beds for the mentally ill, and that the prisons are full-to-overflowing. Unfortunate that our courts are so under-resourced that justice is being denied by trial delays of up to 18 months. Labour will continue to resist the rising clamour for increased spending via the tax rises essential to the maintenance of a civilised society.

The grim picture painted in the BIMs is the consequence of National’s class-driven programme of austerity. Labour’s seeming helplessness in the face of the multiple crises they reveal, is the direct consequence of its refusal to accept that the wounds of austerity can only be healed by applying the sovereign remedy of substantial increases in state spending – facilitated by a radical expansion of the tax base.

This essay was originally posted on The Daily Blog and Bowalley Road of Saturday, 9 December 2017.

"Closing The Gaps" 2.0

Dangerous Politics: Both Jacinda Ardern and Grant Robertson were up-close witnesses of the racist backlash that scuttled the Helen Clark-led Government’s attempt to “Close the Gaps” between Rich and Poor/Maori and Pakeha in the early 2000s. The National Party does not have a monopoly on redneckism. Many Labour voters also have plenty of unpleasant things to say on the subject of “the Maarees”.

THE WORST SIDE-EFFECT of New Zealand’s thirty-year “free-market” experiment is the way the words “Maori” and “dysfunctional” have become interchangeable. That the poor in New Zealand are disproportionately brown has made it much easier for the Pakeha majority to submerge their racial animosity in the less inflammatory vocabulary of socio-economic prejudice. Just like their White American counterparts, Pakeha racists have found a way to communicate their hatred and intolerance of ethnic minorities by couching their attacks in the language of economics and sociology.

As newspaper columnist Dave Witherow, and the former National Party leader, Dr Don Brash have both discovered over the past fortnight: to rant and rave publicly against Te Ao Maori is to invite instant, extensive and very loud condemnation. Condemning the poor for their ignorance, improvidence, laziness and criminality, however, provokes no such backlash. Liberal and progressive New Zealand is content to keep ethnicity and social deprivation in separate conceptual boxes. In the racist imagination, however, being poor, and being Maori, remain kindred categories.

This ethnically-coded discourse about poverty and the poor explains the otherwise puzzling phenomenon of the former National Government’s ability to embrace much of the programme of the Maori Party without provoking the mass desertion of the sort of National voter who had responded so dramatically to Dr Brash’s in/famous “Orewa Speech” of 2004. John Key may have basked in the praise of liberal New Zealand for throwing his arms around Tariana Turia and Pita Sharples, but National’s less “politically correct” supporters had only to observe his government’s hard-line approach to beneficiaries to be reassured that their party’s intolerance of all manifestations of “Maori/Dysfunction” remained as fierce as ever.

As political subterfuge goes, it was a pretty sophisticated double-act. On the one hand stood Chris Finlayson: working his way through the backlog of Treaty claims with admirable dispatch. On the other, Paula Bennett and Anne Tolley: wielding their punishing sticks against the undeserving poor – a disproportionate number of whom just happened to be brown. The urban liberals were moved, but so, too, were National’s provincial conservatives. A win-win strategy for everyone – except the Maori poor.

And on 23 September 2017, the Maori poor had their revenge. Unwilling to give the Maori Party the benefit of the doubt a fifth time, Maori voters drove its two remaining representatives out of Parliament altogether – thereby securing Labour a clean sweep of the seven Maori electorates. Between them, the Labour, NZ First and Green parties making up the current government contain an unprecedented 19 Maori MPs.

For these Maori politicians, the linkage between ethnicity and poverty is as important to the overall conduct of Jacinda Ardern’s government as it was to John Key’s – but for diametrically opposite reasons! Maori, both inside and outside the House of Representatives, will not tolerate an economic and social strategy that is not committed unequivocally to freeing their communities from the consequences of thirty years of racist neglect: those crippling social dysfunctions which so many Pakeha cite as justification for their prejudice.

This is dangerous politics. Both Jacinda Ardern and Grant Robertson were up-close witnesses of the racist backlash that scuttled the Helen Clark-led Government’s attempt to “Close the Gaps” between Rich and Poor/Maori and Pakeha in the early 2000s. The National Party does not have a monopoly on redneckism. Many Labour voters also have plenty of unpleasant things to say on the subject of “the Maarees”.

Enter NZ First’s Regional Economic Development Minister, Shane Jones. His mission, to unite conservative provincial New Zealanders, Maori and Pakeha, around an economic nationalist programme committed to uplifting both communities. Anyone who watched Jones’s bravura performance on TVNZ’s “Q+A” current-affairs programme of Sunday, 3 December – during which he openly talked about forcing his feckless Northland “nephews” “off the couch” and into paid work – can only have felt for Finance Minister Grant Robertson. Jones, undoubtedly speaking on behalf of his boss, Winston Peters, made it very clear that Robertson’s business-oriented commitment to “fiscal and economic responsibility” cut little ice with him – nor, one suspects, with the Coalition Government’s other Maori MPs.

“Some trust in chariots and some in horses, but we trust in the Coalition Agreement”, quipped Jones, paraphrasing Psalm 20:7, and making it very clear to his political cohabiters that the Maori members of the Government will not be truncating their Maori-centred agenda to satisfy either Robertson’s “Budget Responsibility Rules” – or the prejudices of Pakeha.

What Jones and his comrades have come to understand, finally, is that the “market-failures” which they are determined to correct were also, perversely, politica successes. The free-market policies of the 1980s and 90s contributed to the disintegration of many Maori communities. The resulting “Maori underclass” spawned a host of seriously dysfunctional behaviours – creating fears which were exploited politically to “weaponise” Pakeha racism.

Fix the first problem, and the second falls apart.

This essay was originally published in The Press of Tuesday, 5 December 2017.

Radical Transformers? Doesn't Sound Like It.

Labour's Responsible Fiscal and Economic Manager? Or, will Grant Robertson's unwavering adherence to his own "Budget Responsibility Rules" strap New Zealand into a fiscal and economic straightjacket, the primary effect of which will be to render the Labour-NZ First-Green Government’s “transformational” promises incapable of fulfillment?

TO ACCUSE POLITICIANS of being part of a “tax and spend” government is just another way of calling them social-democrats. By the same token, politicians who explicitly renounce the policies of tax and spend are signalling that they are anything but social-democrats. What, then, should we make of Grant Robertson’s speech to the ANZ Business Breakfast of Friday, 1 December 2017? The short answer is: if Finance Minister Robertson is a social-democrat, then he’s not a very good one.

Let’s begin with the most positive paragraph of his address to the assembled business leaders. Unfortunately, it’s not his. Robertson is merely quoting the core objectives of the Labour-NZ First- Green Government’s “common mission statement”:

 “Together, we will work to provide New Zealand with a transformational government, committed to resolving the greatest long-term challenges for the country, including sustainable economic development, increased exports and decent jobs paying higher wages, a healthy environment, a fair society and good government. We will reduce inequality and poverty and improve the well-being of all New Zealanders and the environment we live in.”

There is no avoiding the radicalism of this declaration. “Transformational government” is what happens when the old ways of doing things are jettisoned in favour of news ways of managing a nation’s economy and society. The 1984-1990 Labour government of David Lange and Roger Douglas was unequivocally transformational. It cast aside the political, economic and social assumptions of the previous fifty years of New Zealand history in favour of a market-led society in which taxing and spending would be relentlessly “downsized”.

Significantly, the current Labour-NZ First-Green Government has, in large measure, come into being because just over half the New Zealand electorate was determined to bring an end to and, if possible, reverse, that downsizing.

Unfortunately, it just isn’t possible – on the basis of Robertson’s address to the ANZ Business Breakfast – to see how that can happen. The Finance Minister makes it very clear that the Ardern Government (its promises to bring about “transformational” change notwithstanding) is absolutely determined to offer “responsible fiscal and economic management”.

In case his audience was in any doubt as to what this entailed, Robertson spelled out Labour’s “Budget Responsibility Rules”:

“To recap, this means that we will deliver a sustainable operating surplus each year unless there is a significant disaster or major economic shock or crisis. We will ensure that government spending as a proportion of the economy won’t rise above the recent historical average of 30% of GDP. We will reduce net core Crown debt to 20% of GDP within five years of taking office.”

It’s important to identify these commitments for what they truly are: a fiscal and economic straightjacket, the primary effect of which will be to render the Labour-NZ First-Green Government’s “transformational” promises incapable of fulfilment.

Robertson’s Budget Responsibility Rules will achieve this result all on their own. Throw in Labour’s election campaign commitment to leave income and company taxes unchanged for three years, and what New Zealanders are faced with is thirty-six months of “Austerity-Lite”. Which isn’t quite the “transformation” New Zealanders had in mind when they accepted Jacinda’s invitation to “Let’s Do This”.

Somehow, Robertson’s rigid adherence to “responsible fiscal and economic management” will have to be overcome. Failure to reclaim the ability to tax and spend, or, to put it in less tendentious language: the ability to redistribute wealth from the rich to the poor while accelerating the nation’s infrastructural development in ways that both reduce social inequality and expand individual opportunity; can only result in the Labour-NZ First-Green Government being thrown out on its ear in 2020.

Most of all, the Labour caucus needs to be weaned-off the self-denying-ordinances of neoliberalism. The whole history of our democracy has been about the determination of ordinary people to claim the same rights and privileges that King John’s barons acquired in Magna Carta. Namely, that before the King can tax them, he must first obtain their consent. In other words, determining the quantum and purpose of revenue gathering is the people’s prerogative. Winning control of the Treasury Benches becomes meaningless if the winners then refuse to exercise their right to raise revenue and spend it as they see fit.

If this is, in truth, to be a radical, transformational government, then perhaps its parliamentary majority should consider delivering a small demonstration of radical, transformational politics. All the Labour, NZ First and Green MPs outside Cabinet could agree to meet as a single entity and demand that the “Red October” appendix to the Coalition Agreement be made available for discussion and debate. This revolutionary “Common Mission Committee” could then communicate to Finance Minister Robertson which of the many promises agreed to by Labour were to be financed and implemented. If he refused, a new Finance Minister could be suggested.

Fanciful? Of course, it is! Not least because the Executive could easily thwart such a rebellion by entering into a grand coalition with the National Party. Would that cause the Labour Party to self-destruct? Probably. But wouldn’t that be a more honest outcome than forever putting up with governments run by unelected neoliberal civil servants?

A Labour Party that refuses to tax and spend really should call itself something else.

This essay was originally posted on The Daily Blog of Saturday, 2 December 2017.

Don't You Dare, Jacinda Ardern! Don't You Dare!

Oi! Jacinda! No!  If Jacinda Ardern follows the advice of her advisers to scale back voter expectations and re-commit to the Labour/Green "Budget Responsibility Rules", then she will endanger everything she has achieved to date.

 

“DON’T YOU DARE, Jacinda Ardern. Don’t you dare!” That’s what I shouted at the television screen as she started hosing-down the political prairie fire she’d so spectacularly ignited barely a fortnight before. Someone, somewhere, had impressed upon her the importance of walking-back the expectations that “Jacindamania” is raising – especially among the young.

 

Someone, somewhere, has drawn her attention to Labour’s longstanding commitment to fiscal rectitude. Rapidly rising voter expectations of increased government spending on education, health and welfare are threatening to make a bonfire of the party’s much-vaunted “Budget Responsibility Rules” and, clearly, her advisers are insisting that she dampen them down.

 

But, if she heeds this advice, Ardern will endanger everything she has achieved to date. Instead of being hailed as Labour’s political saviour: the woman whose sunny ways have thrown her four dismal predecessors into shadow; she will begin to look like a front-person. A phoney. A fake.

 

All that promise; all that thrilling sense of now, at last, Labour has a leader equal to the challenges New Zealand faces; will dissipate. The radiance of “The Jacinda Affect” will fade. And, in the ensuing gloom, we will see only a smiley-face puppet whose strings are being pulled by the same grey men who gave us Phil Goff, David Shearer, David Cunliffe and Andrew Little. Those “leaders” who failed us by making promises, and then, almost immediately, taking them back again.

 

According to her Wikipedia entry, Ardern has a BA in communications. So, I’m betting there’s a little voice telling her not to listen to her over-cautious advisers. A little voice demanding to know why she is putting her dream-run to the Ninth Floor of the Beehive at risk.

 

She should listen to that little voice, and ignore the voices of all those telling her that the sky will fall if an Ardern-led Labour Government deviates even a smidgen from the numbers set down in the Labour/Green Budget Responsibility Rules. Because it won’t.

 

No need to take my word for it, however. This is what Aussie economist, Professor Bill Mitchell, from the University of Newcastle, NSW, said when asked to comment on the rigid fiscal parameters set down in Labour’s and the Greens’ budget rules. He described them as “the height of economic irresponsibility”.

 

Responding to RNZ’s Wallace Chapman on the Sunday Morning programme of 30 July, Mitchell went on to argue that, since roughly 1 in 8 New Zealanders are either underemployed or unemployed; a third of our children live in poverty; and we have record levels of household debt – “so you’ve got consumption expenditure being driven by debt which is an unsustainable process” – and since we have an external sector that’s draining spending through current account deficits; the very idea of running a fiscal surplus is, in Mitchell’s own words, “irresponsible in the extreme.”

 

Of course all those grey men whispering in her ear will tell Ardern that Bill Mitchell is a crank whose views should, on no account, be heeded. But that is what the advisers to the British Labour Party’s tragic Chancellor of the Exchequer, Phillip Snowden, said about John Maynard Keynes in 1929. And it is also, I’m guessing, what all the people she got to know in Tony Blair’s office said about Jeremy Corbyn’s “For the Many, Not the Few” manifesto. Grey, cautious men will always tender grey, cautious advice.

 

But if she really means to be New Zealand’s Justin Trudeau, then Ardern should follow his campaign strategy. Trudeau saw the New Democratic Party (Canada’s Labour Party) doing everything it could to be “responsible” – to the point where Canadians found it difficult to distinguish Thomas Mulcair’s NDP from Steven Harper’s Conservatives. Seeing the political opening before him Trudeau said something along the lines of “Let’s do this!” – and won.

 

Don’t hose down the expectations you have raised, Jacinda. Be guided, instead, by Bill Mitchell:

 

“[W]hat you’ve got in New Zealand is similar to many other countries in the advanced world. You’ve got the so-called “progressive parties” – the Greens and the Labour Party, who have abandoned [their traditional roles]. The Greens are sort of neoliberals on bikes. And the Labour Party are Neoliberal-Lite. They say, we’ll do austerity – but we’ll do it fairer.”

 

Except: “There’s no such thing as fair austerity when a third of your children are living in poverty.”

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 18 August 2017.

Centaurs Need Not Apply.

Keeper of the Green Faith: From the moment the Labour/Green “Budget Responsibility Rules” were announced, I knew that a scorching sermon from Sue Bradford was only a matter of time. She did not disappoint. Barely 72 hours after Grant Robertson’s and James Shaw’s blasphemy had sullied the ears of the faithful, Sue was on RNZ’s Morning Report castigating her erstwhile comrades with considerable passion.

 

AS A GUARDIAN of left-wing orthodoxy, Sue Bradford is without peer. At the first hint of heresy she can be relied upon to stride purposefully to the nearest progressive pulpit and start preaching.

 

From the moment the Labour/Green “Budget Responsibility Rules” were announced, I knew that a scorching sermon from Sue was only a matter of time. She did not disappoint. Barely 72 hours after Grant Robertson’s and James Shaw’s blasphemy had sullied the ears of the faithful, Sue was on RNZ’s Morning Report castigating her erstwhile comrades with considerable passion.

 

“The Greens have completely sold out on where they started from in my generation of MPs in 1999”, Sue thundered. “So what you see here is the Green Party deciding to go after votes on the centre and the right of the New Zealand political spectrum. It wants business in its corner. It wants your National blue-green voters in its corner.”

 

What does this mean? Sue is in no doubt. It means “completely abandoning the huge number of people who are in desperate need in the areas of housing, welfare, jobs, and education.”

 

There’s a part of me that inclines towards Sue’s critique. It’s the part that remembers those original Green MPs, the “magnificent seven”, as they galloped up the steps of Parliament and onto the floor of the House of Representatives like “an invasion of centaurs”. (If I may borrow Theodore Roszak’s evocative image.)

 

Which was great to see. (And even greater to be, Sue, I’m sure!) But only if your purpose was (borrowing once again from Roszak’s 1969 best-seller The Making of a Counter-Culture) to embody “the experience of radical critical disjuncture, the clash of irreconcilable conceptions of life”. Or, as an old-time Maoist like Sue might express it: only if the Greens were there to make revolution.

 

An Invasion of Centaurs: "the clash of irreconcilable conceptions of life".

 

But even back then, in 1999, the Greens’ revolutionary faction was in the minority. Alongside Sue, Keith Locke and Nandor Tanczos, sat Rod Donald, Jeanette Fitzsimons, Sue Kedgely and Ian Ewen-Street. Radical and visionary these latter four may have been, but they had come to Parliament to accomplish things, not to turn New Zealand’s capitalist society upside down.

 

Twenty years later and the Greens are still waiting to fulfil even a small fraction of the Magnificent Seven’s agenda. Most members of the Green Party are not interested in being seen as the harbingers of a “radical critical disjuncture” but as members of a political party dedicated to finding practical solutions to global warming; cleaning up New Zealand’s lakes, rivers and streams; housing the homeless and helping to develop a principled and purposeful role for New Zealand on the international stage.

 

For most New Zealand voters, the idea of revolutionary Green Party centaurs rampaging through Parliament is equally politically uninteresting.

 

So perhaps Sue should cast her mind back to the 1999 election and recall just how narrow was the margin that separated the Greens from parliamentary representation and political oblivion. Rod Donald delighted in his white shirt and coloured braces for six years, but by 2005 he was very publicly having himself measured for a stylish Kiwi-made business suit. When the brute arithmetic of political power kept him out of Helen Clark’s Cabinet it, quite literally, broke his heart.

 

“At what price power,” Sue demands “if you sell out everything that your party was originally set out to achieve? I mean, this Green Party here is following the same trail as green parties all over the world – some of who have ended up in coalitions and alliance with really right-wing governments.”

 

But in 2014, with just one image, the National Party destroyed the Green Party’s (and Labour’s) hopes of achieving anything for New Zealand. Their depiction of a Red/Green government as an uncoordinated and unreliable “Ship of Fools” was devastating.

 

That’s the public perception that Andrew Little, Grant Robertson, James Shaw and Metiria Turei are up against. And it is the widespread public misgivings about the Left’s economic realism and reliability that their “Budget Responsibility Rules” are intended to allay.

 

That’s because powerlessness also comes at a price.

 

A real revolutionary would understand the importance of inoculating the two leading parties of the Left against the “Show me the money!” ambushes of elections past.

 

The Greens are not trying to make a counter-culture, Sue – they’re trying to make a government.

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 31 March 2017.

Not Being Venezuela: The Political Logic Of The Labour/Green "Budget Responsibility Rules".

Labour/Green's Responsible Face: Don’t be too quick to condemn Labour and the Greens for cautioning their supporters against excessive economic and political expectations. Both parties know how important it is to inoculate themselves against the Right’s accusations of economic ignorance and irresponsibility.

 

FOR THOSE WHO THINK Labour and the Greens are being too cautious, economically-speaking, I have only one word: “Venezuela”. Andrew Little may not resemble Hugo Chavez in the slightest. Nor are Labour and the Greens, by any stretch of the imagination, Bolivarian revolutionaries. But, to hear the Right tell the story, New Zealanders are being courted by dangerously left-wing political parties. Given half a chance, we are told, Little and his Green sidekicks, James Shaw and Metiria Turei, will happily transform New Zealand into the Venezuela of the South Seas.

 

The reasoning behind this outlandish charge is simple:

 

Because the Left has never seen a problem that could not be fixed by throwing more money at it, the Right argues, all left-wing governments end up spending themselves into a fiscal crisis. Afraid of taking the harsh economic measures required to balance the country’s books, these leftists then decide to maintain the living-standards of their followers by taxing the rich ferociously and borrowing like there’s no tomorrow. Very soon the country’s international lines of credit are exhausted. At this point, the clueless government decides to crank up the state’s printing presses – flooding the country with paper money. When the overseas suppliers of vitally important imported goods refuse to accept this increasingly worthless currency, the government responds with rationing and harsh import and price controls. In the face of widespread protests, the now desperate government resorts to increasingly authoritarian methods of political control. Pretexts are found for shutting down the oppositions’ media outlets. Government supporters confront government opponents in the streets. Violent clashes ensue. As the next scheduled general election draws near, the embattled left-wing government must choose between pushing forward into full-scale dictatorship (thereby risking a military coup d’état) or submitting itself to the judgement of an outraged and/or disillusioned electorate. Either way, their own – and the country’s – prospects are bleak.

 

Unfortunately, the historical record offers more than a little confirmation of this alarming right-wing narrative. Even here, in Australasia, the precedents are not all that encouraging. In the case of both the government of the Australian Labor Prime Minister, Gough Whitlam, and that of our own Norman Kirk, there are disturbing echoes of the above scenario. It certainly describes the sequence of political events in the Chavistas’ Venezuela.

 

Indeed, it is possible to argue that the grim fortunes of the social-democratic governments of the 1970s – especially the fate of Salvador Allende’s Popular Unity government in Chile – lay heavily on the minds of New Zealand and Australian labour leaders in the 1980s. Also before them was the abject failure of the French President’s, Francois Mitterand’s, socialist-communist government. Elected in 1981 on an avowedly left-wing programme, it was forced, within months, to execute a humiliating U-turn. The scale of French capital flight was economically unsustainable.

 

That the Right was in large measure responsible for the economic and political difficulties which brought these social-democratic governments to their knees, in no way invalidates its critique. The Right knows that a left-wing government genuinely committed to the uplift of its marginalised and exploited supporters has little choice except to adopt the “tax and spend” policies outlined above. They also know how, in the chilling language of Richard Nixon and Henry Kissinger, to “make the economy scream”.

 

So don’t be too quick to condemn Labour and the Greens for cautioning their supporters against excessive economic and political expectations. Both parties know how important it is to inoculate themselves against the Right’s accusations of economic ignorance and irresponsibility.

 

To a confirmed leftist, the Labour Finance Spokesperson’s, Grant Robertson’s, and the Green Co-Leader’s, James Shaw’s, statement that: “New Zealanders rightly demand of their government that they carefully and effectively manage public finances”, will undoubtedly sound a rather flat ideological note. So, too, will the “Budget Responsibility Rules” to which Little, Robertson and Shaw have pledged themselves.

 

Delivering “a sustainable operating surplus across an economic cycle”; reducing “the level of Net Crown Core Debt to 20 percent of GDP within five years of taking office”; and promising to “maintain [Government] expenditure within the recent historical range of spending to GDP ratio”: these are hardly the sort of slogans to summon the proletarian masses to the barricades!

 

What they just might do, however, is spike the rhetorical guns of Labour’s and the Greens’ political opponents – making it much easier for the swing voter to believe that voting Labour/Green to change the government, is not at all the same as voting for 1,000 per cent inflation and blood in the streets.

 

This essay was originally posted on The Daily Blog of Saturday, 25 March 2017.