To Sell Or Not To Sell
It is I suppose inevitable, in the run-up to an election, that any comment on an issue of public interest – like the excessive deference paid by the media to the Prime Minister, or the proposed sale of publicly owned assets – should be seen by party hacks exclusively in terms of the inter-party battle.
But since it is clear that, on the sale of public assets, concerns extend across voters of all persuasions and include many supporters of the government, I hope that a discussion of that issue will not be seen just as party-political posturing. It is too important for that.
The first point to make on the issue is that – if we adopt the analogy with a private household often (and usually wrongly) favoured by commentators – an individual who proposed to sell off an income-producing asset so that he could spend the proceeds would be regarded as behaving somewhat imprudently. In this respect at least, the analogy holds and a government is surely no different.
The point need not be laboured, since it is made forcefully by those who are the most enthusiastic supporters of the proposal. No one can blame the fund managers for salivating at the prospect of a new range of investments that are secure, long-term, virtually inflation-proofed, and guaranteeing a good return.
But the more they hype the advantages of such investments and proclaim their keenness to get at them, the more they beg the question – wouldn’t those investments be equally valuable and attractive in the hands of those who currently own them?
And, since the current government says that their top priority is improving their own finances, how do they propose to make good the hole in those finances when they no longer receive the income from the assets they have sold?
The suspicion must be that the loss of income will in due course be made up by further sales of public assets. And, since the new private owners will be keen to attract yet more capital, the proportion of equity in public and therefore New Zealand hands can be expected to diminish in any case.
It is of course true that the New Zealand capital market would be improved substantially, at least in the short term, if a major new range of investments became available. But we should surely pause to wonder why our capital market is so small and weak. The answer is that most of what were once New Zealand assets of comparable size and stability have long ago passed (via privatisation) into foreign ownership; and the further sale of what remains in public ownership seems certain to add to that longstanding trend.
The architects of the proposal have struggled to find any convincing way to allay these obvious fears. It is noteworthy that we hear little now of the so-called “Mum and Dad” investors; they are thought to be all too likely to sell off their shareholdings (perhaps once they have collected the bonus shares) to the highest (which usually means foreign) bidder.
But the government has nevertheless had some success in finding supporters for its proposal – and not just the obvious candidates in the investment industry. Perhaps the most significant of those who have come out in favour of asset sales have been iwi, who have proclaimed their intention of joining forces in order to invest in this new range of assets.
The Finance Minister, Bill English, attached such importance to obtaining this endorsement that he went especially to Ngaruawahia to make his case. He might have benefited, however, from listening to the detail of what Tukoroirangi Morgan had to say afterwards.
The spokesperson for the iwi group was clear as to what Maori aims were. He said that Maori would invest for the long term. He said that they would hold their shares in trust for future generations. He said that they would seek a seat on the board so as to make the most of the influence that their shareholding would give them.
Most people, I guess, would nod in approval of all of these propositions. But the noteworthy point about them is that they constitute the clearest possible statement of the argument against selling the assets in the first place.
The advantages to Maori spelt out by Tukoroirangi Morgan are precisely the advantages currently enjoyed by all of us but which the asset sales would deny us. So, the question that must be answered by Mr English is – why is something that is clearly so valuable to Maori (an assessment that he seems happy to endorse when it suits his purpose) thought to be of no consequence or value to all New Zealanders?
Why have Maori been able to look to a leadership that takes the long view and has a proper sense of its obligations to the common interest and future generations? Why do the rest of us have to make do with a leadership that looks at worst to an ideological prejudice against public ownership and at best to a short-term boost to the balance sheet that will quickly be outweighed by the all-too-familiar burden of paying the profits across the foreign exchanges to overseas owners?
Bryan Gould
1 September 2011
The Dangers of Dominance
In 1980, I brought my young family for the first time to New Zealand to visit my homeland for a holiday. At the time, I had recently lost my marginal seat in the House of Commons and was working in current affairs television.
One of my clearest memories of that enjoyable holiday was the shock of discovering how much New Zealand was in thrall to a powerful – not to say domineering – Prime Minister. Robert Muldoon was at the height of his powers – and, as a student of both politics and the media, I was amazed to observe the excessive deference with which he was treated by the New Zealand media.
I particularly remember seeing him being interviewed in a television studio. One camera showed the interviewer addressing a question to him, and a second focused on the Prime Minister who answered the question by speaking directly into the camera – and therefore directly to each individual viewer – thereby ignoring the interviewer altogether.
No self-respecting studio director would have allowed a politician to get away with this. A simple two-shot would have shown the Prime Minister looking ridiculous as he talked to an empty space – at right angles to the person with whom he was supposedly having a conversation.
Muldoon was of course unusual in his ability apparently to terrify colleagues and opponents alike. But, how do we fare in 2011, when we have a Prime Minister who is, by virtue of his constant presence in the media, in some ways equally dominant?
John Key is of course a very different personality from Robert Muldoon. He is by nature a conciliator and seeker of consensus. But – just because he is nicer – that does not mean that he does not in his own way pose an equally serious threat to a full reflection of what should be a serious political debate.
There are times when it seems that nothing can happen, either internationally or domestically, so far as our media are concerned, unless the Prime Minister is on hand to comment on it or otherwise certify by his presence that it is indeed news. He seems to serve the roles, variously, of national leader, moral guide, social commentator, sports journalist, pub drinking companion, comedian – and even politician. There is scarcely a television news bulletin which does not feature his appearance at some point in one or other of these roles.
New Zealand is of course a small country with nothing like the range of media enjoyed by a larger country like Britain. When I was a senior British politician, the number of media outlets was so large and their appetite for comment and interviews so voracious, that I would habitually do two or three significant interviews every day – and many more as an election approached.
We cannot hope to have the depth and coverage of news and analysis they provide. But New Zealand’s political media have compounded the problems arising from their small numbers and limited resources by treating the Prime Minister as virtually their sole determinant of what is news.
Surprisingly, it may seem, the Prime Minister’s own colleagues may be among those who share that concern. As the Herald pointed out last week, his Cabinet colleagues have difficulty in shining when the Prime Minister is constantly available to take over anything newsworthy from them.
The consequences for our political system are more extensive than may be thought. It is not just members of the government who suffer from being denied a voice in the media. In a properly functioning democracy, politicians from all sides need to feel that they have a well-tried and reliable way of getting heard.
If that access is available only occasionally, both sides of the transaction get used to doing without it. Expectations are lowered. Understandings of what might be newsworthy are adversely affected by both media and politicians. Those who find that they are not regarded as worth listening to give up trying.
My own experience in the year or two before a general election in Britain was that I would be involved almost daily in a press conference – not just commenting on the news but trying to set the agenda and make the news as well. Both media and politicians got used to this. The result was a rich and varied diet of political news and views that helped to promote a healthy political climate.
With three months to go before our own election, I look in vain for that kind of debate. The deficiency is likely to get worse during the World Cup. It is not good enough to say that opposition politicians are not heard because they have nothing to say. How do we know?
No one can blame John Key for using his charm and likeability to the best advantage. The concern is whether the media have become so used to it that they are now constrained by it as well.
No one needs persuading of John Key’s value to his party and government, and it is inevitable and right that he should play a major part. But a strong and effective government needs more than a single foundation stone. The Prime Minister’s dominance, paradoxically, weakens his government and – by constraining the scope of the political debate – diminishes our democracy as well.
Bryan Gould
27 August 2011
This article was published in the NZ Herald on 30 August.
Rupert and the Rioters
Rupert Murdoch and his News International have good reason to be grateful to the rioters. They were able to drop out of the headlines themselves, for a time at least, and to report on others making the news for a change.
But their respite was short-lived. The apparently incontrovertible and growing evidence of cover-up and dishonesty has compounded the outrage felt at the phone-hacking revelations. They now find themselves – with the publication of Clive Goodman’s letter – back in centre stage.
It is perhaps appropriate that they should share double billing at this point with the rioters. Perhaps the one issue is linked with the other? The search is on, after all, for an explanation of what may otherwise seem inexplicable – how could young people act with such an absence of any decent impulse? Without any thought for damage they were doing to the society in which they lived?
The Prime Minister, no less, opines that parts of English society are “broken” and has declared a social “fightback”; but fighting back will be ineffective if the enemy remains unidentified. Punishing individual rioters may be necessary and unavoidable, but that in itself will do little to drill down into the real causes of social breakdown.
At this point, step forward Rupert Murdoch and News international. Here, after all, are those who –through their power in the media – have arguably done more than any others to shape our society over recent decades.
We now have a fairly accurate idea of the values and principles they have brought to that task – the evidence provided by what we now know about their own disreputable business practices. We know that they have little regard for legality or honesty, that they feel contempt for those they report on, and that they will use their power to threaten or cajole when challenged.
They purport to hold up a mirror to society, to show people how they and others – their neighbours, their workmates – actually behave. But the mirror has been distorted. They have, in an effort to shock and titillate so as to sell more of their product, pushed back the boundaries of what is regarded as acceptable. They show, not what most people think or do, but what those at margins of society get up to – and the more outrageous the better.
Underpinning this distortion of what is normal and responsible is the cult of celebrity. The constantly repeated and largely subliminal message is that, however despicable the behaviour, it is to be excused and even celebrated if the perpetrator is featured in the headlines. Celebrity cures all. Fame and money are all that matter.
The result is that young people in particular are left without a moral compass. Sexuality is a commodity and selling agent. Money is the greatest desideratum, however it is acquired. Those who deserve to be admired and emulated are those whose success is measured by how much they have been able to grab, even – and especially – when it is at the expense of others. In all of this, the personal mantra of the News International proprietors is faithfully reflected.
The Murdoch media have been major influences in creating a debased popular culture. The old social virtues of mutual support, helping one’s neighbour, have been supplanted. Little wonder that young people, with little life experience and nothing much by way of role-models to emulate or moral guidance to follow, have been especially susceptible to the message delivered to them unremittingly by the Murdoch media.
There are of course other contenders to shoulder the major responsibility for social breakdown. Among the leading candidates would have to be the development in a recessionary climate of an economy in which unskilled labour no longer has a part to play.
Give or take the odd millionaire’s daughter who popped up like manna from heaven for the headline writers, the young people who took their chance in the riots (manipulated no doubt by social media-savvy fomenters of trouble) saw no future for themselves because they knew they had been dismissed as worthless by the rest of society. They reasoned that grabbing what they could when the moment arrived was just the kind of behaviour that would be rewarded not just with material gain but with a brief and local celebrity.
So, when David Cameron launches his fightback, why not look for starters at the role of Murdoch media which have been allowed – by exploiting their power with the benevolent connivance of successive governments – to exercise a disproportionate and malign influence on our young people?
Bryan Gould
18 August 2011
England’s HaKa – the HoKey-CoKey
The England rugby team are on track to complete their preparations for the Rugby World Cup according to the plan laid down by coach, Martin Johnson.
England’s warm–up games have not so far shown the sort of form that suggests that they are real contenders for the title, but Johnson declares himself satisfied with where they are.
“We are what we are, and we must work with what we have,” Johnson says. But he acknowledges that a change of identity is an important part of the plan.
“The first step in the plan has been achieved,” he says. “The players are getting used to the black uniform, and no longer cringe with embarrassment when they put on the black jersey. We have encouraged the team to wear the black jersey in a wide range of situations – in bed, going to the supermarket, joining in riots, so that they cease to think of it as anything out of the ordinary. They now have some sense of what it feels like to be in a team with a better than 75% win rate over 106 years.”
Johnson agrees that many members of his squad were World Cup winners eight years ago. “Advancing age is an insidious condition, though,” he says, “and memories have faded over the years. Most of those players remember nothing other than that the way to win is to do nothing until the last minute and then give the ball to Johnny to drop a goal. We needed some way of reviving memories for the players who have difficulty remembering 2003 of what it means to be in a world-class team.”
England have worked hard to change the composition of the team – again with a view to updating its identity. “We have to move on from 2003,” he says, “and we need to introduce new – that is to say, non-English elements – into the team.”
“We have worked hard to ensure that a high proportion of the players introduced since 2003 are not English. This seems to us to be our best bet for matching what overseas teams are able to achieve.”
“In particular, I have been keen to put anyone with a vaguely Polynesian name and/or appearance straight into the team. It all helps to create the illusion for the players that might be able to play as well as Samoa.”
Johnson revealed that there are still some tricks up his sleeve. “We will require team members, including the non-Polynesian minority, to acquire tattoos before the World Cup.” He rejected suggestions that being tattooed was a long, arduous, and exhausting process. “In line with our approach that it is perception rather than reality that matters, we have purchased a high-quality range of transfers that players can choose from the night before a match. Players can choose from a wide range of options, including “Kiss me quick” and “My old man’s a dustman.”
Johnson was unwilling, however, to say much about what we understand is regarded by England’s management as potentially the coup de grace. We are led to believe that England are concerned at the advantage that they see the All Blacks as gaining from the haka. Work is well advanced on an English equivalent – something that will intimidate opponents and gain a psychological advantage for England.
Johnson was dismissive of earlier efforts made by other teams to match the haka. In particular, he poked fun at the Australian use of Waltzing Matilda in trans-Tasman matches. “No one is going to be too terrified of a single guy strumming a guitar and singing a song about a dancing sheila,” he scoffed.
We understand that the first effort at an English haka focused on the Morris dance. After several practices in secret, however, this idea was junked. “The tinkling bells, pretty ribbons, and skipping steps didn’t quite do it,” according to one well-placed observer (thought to be Steve Thompson who, it is reported, didn’t feel that it was quite him), “and it took us twenty minutes to change out of our gear when we had finished and into the black uniform.”
We understand on good authority that the current plan is to do the hokey-cokey. “Performed by large men, singing loudly and scowling, it will, we think, produce the right effect,” says the same well-placed authority. “Putting your left leg in and then your left leg out in unison can seem very impressive and intimidating. And, like the haka, it has a cultural history that makes it a real statement of English resolve.”
More work is needed however. It seems that the front-row are having difficulty in distinguishing their left legs from their right legs. Martin Johnson, though, is not deterred. “If the team can get this difficult technical exercise right, then the World Cup should be a piece of cake.”
Bryan Gould
16 August 2011
Austerity or Jobs?
Two issues – the turmoil on world stock markets, and the riots in English cities – have dominated news bulletins over recent days. Each is a significant news story in its own right, but the interesting question is whether they are in any way linked.
What looks suspiciously like the global financial crisis, Part II, is widely reported as a problem of government debt. Those many governments that have identified debt reduction as their top priority have seen the renewed crisis as vindicating their analysis. In reality, however, what it demonstrates is that they have got it completely wrong.
No one doubts that government debt in the US, the UK and the eurozone is higher than it should be and is a drag on economic recovery. Debt arises, however, because spending has outpaced revenue. As a matter of logic, therefore, there are two (and not necessarily mutually exclusive) ways of remedying the situation.
Governments can choose to focus on cutting spending, or they can try to increase revenue. These further economic shocks show that, in focusing exclusively on cutting spending, they have made the wrong choice.
The problem is that the level of debt is a function of the level of economic activity; the higher the level of economic activity, the more buoyant the government’s tax revenue. A government that has trouble in balancing its books in a recession, and that seeks to deal with that issue exclusively by cutting its spending, necessarily reduces the level of economic activity and – by depressing its tax revenue – makes the debt problem more difficult to resolve.
Sadly, we have seen, in the economies that have spawned the current crisis, extreme examples of this error. In the US, the Republican majority in the House of Representatives has been wagged by the Tea Party tail, with the result that the usually technical issue of raising the government’s debt ceiling became an issue of moral probity.
The Republicans not only resisted any increase in the government’s ability to borrow but refused to countenance any reversal of the tax concessions that George W. Bush made to the super-rich. A refusal to allow any tax increase, and an insistence on massive spending cuts in the short term – while the economy is still in recession – have rightly been seen by the credit rating agencies as a cause for concern.
In Europe, the problems are more structural. The eurozone lured into its membership smaller and weaker economies – and some not so small – that could not hope to live with monetary conditions established to suit the interests of the dominant German economy. Those countries were lulled into a false sense of security when money and credit were plentiful; but – come the recession – they are now denied the usual remedy of devaluing their currencies. The only course open to them is savage cuts and austerity.
The problem with austerity as a supposed remedy is that closing economies down in an effort to cut spending means that they cannot hope to repay the massive further borrowing they need just to keep their heads above water. Little wonder that European banks look nervously at the probably worthless securities they hold from deficit countries, that bank failures are now seen as a grim possibility, and that contagion threatens to spread not only throughout the eurozone but across the global economy.
The problem is less stark in the UK, which sensibly stayed out of the eurozone. In the British case, however, the damage is self-inflicted. The coalition government, elected last year, has insisted that giving priority to savage cuts in spending will give confidence to the money markets, a view thoroughly discredited by the US and eurozone experience, and – as the “confidence fairy” fails to materialise – by the increasingly obvious failure of the British economy to recover from recession.
The only fairy that has made its presence felt has been a very wicked one indeed. The recession – and, in particular, rising levels of poverty, high levels of youth unemployment, severe reductions in post-compulsory educational opportunities, and sharp increases in public sector rents – has certainly played its part in creating the conditions for last week’s shameful riots.
Each of the many thousands of individual acts of criminality should of course be condemned and punished. But it is pointless and wrong to ignore the fact that riots on this scale are a social phenomenon. Many of us will have been bewildered by the absence – in the television pictures broadcast around the world – of any decent impulse, any sense of social responsibility.
But the young people who behaved like a feral rat pack feel that they owe very little to a society that has banished them to its extreme margins and that treats them as worthless. This is not a question of making excuses, but an attempt to find an explanation for what is otherwise inexplicable to most people.
And before we bless our own good fortune in New Zealand, let us recognise that many of these conditions apply here as well. We have a government that talks of nothing but deficit reduction while the developed world’s worst youth unemployment is allowed to fester. Like misguided governments overseas, given the choice between austerity and jobs, we have made the wrong choice.
Bryan Gould
This article was published in the NZ Herald on 15 August.