Taking Up The Reins Again
What should we make of the domestic political situation as normal business is resumed? As Winston Peters hands the reins back to Jacinda, and Simon Bridges considers the fallout from the National party conference, who has reason to feel pleased and who should be worried?
It is a reasonable bet that Jacinda Ardern has the strongest case for satisfaction. She has, after all, achieved the first and (in personal terms, no doubt, most important) steps into childbirth and parenthood, and has returned to head her government with its unity and sense of purpose intact.
Her brave effort at multi-tasking has so far succeeded, and has been generally commended – apart from a bizarre attack in print from an Australian feminist who berated Jacinda for devaluing motherhood by making it appear too easy!
The other politician whose fortunes might have been compromised was Winston Peters. Serious misgivings were expressed by his critics about his taking over the reins of government but – as befits an experienced minister – he hasn’t put a foot wrong and has even distinguished himself by calling out the Australians on their immigration policies.
With the support of his fellow-minister, Andrew Little, he has – not before time – held the Australian government to account for their shameful denial of human rights in their treatment of immigrants (including large numbers of Kiwis), and particularly of those below the age of majority, when they are held in detention in inappropriate conditions and denied access to legal advice, medical treatment and – in the case of school-age children – education, and are then deported without any legal process and merely by decision of the relevant minster – a minister who, this case, seems to think that young Kiwis with no convictions for any offence constitute a threat to the safety of Australians.
It cannot be said that, in standing up for the rights of Kiwis, and for the international obligations Australia has undertaken to protect human rights, Winston Peters will succeed in changing the policies of the Australian government; but he has at least made it clear that their deficiencies in this respect risk doing serious damage to Australia-New Zealand relations – with the corollary that any failure to remedy the situation would lay bare the little value the Australians apparently now place on the Anzac partnership.
While the coalition government can now feel that it has successfully negotiated what could have been a tricky period of uncertainty and lack of direction, the leader of the Opposition will have faced quite different challenges. It is a truism to say that a newly elected party leader will find his first party conference to be a difficult hurdle to clear. He will be expected to reinforce his authority, see off any potential challengers, and satisfy his supporters that they have made the right choice. He will also want to land some telling blows on the government and persuade the wider public that he is a Prime Minister in waiting.
How did he fare? No too badly, but not as well, perhaps, as he would have liked. He suffered an unlucky setback when he referred to his deputy as “Paula Benefit” – a slip of the tongue of the kind that could befall anyone, but that inevitably caused some amusement – but it should, perhaps, provide an object lesson in the dangers of using a private nickname for one’s colleagues.
His real problem, however, remains unresolved. He is constantly urged to make himself better known to the electorate, and he has worked hard at doing so; but the polls show that the voters have not warmed to what they know and see of him – and changing one’s persona is not easily achieved. I recall that Margaret Thatcher managed it, when she took voice lessons to change her hectoring tone to a more dulcet sound and thereby made herself more acceptable. The risk in making such an attempt, however, is that the voters are quick to detect and punish any perceived lack of authenticity.
To sum up, then – Jacinda’s parental leave has been and gone without changing the underlying political balance too much. We have yet to see what, if any, response there might be to the emergence of little Neve Te Aroha into the public consciousness.
Bryan Gould
1 August 2017
Helsinki Debacle Claims Its Victims
Writing a commentary on current affairs is always a fraught business; however considered one’s views, they are bound to be challenged by someone – even many, – and they can, by the time they are published, be totally discredited by events that have happened in the meantime.
Mike Hosking fell victim to this syndrome when he ventured a defence of Donald Trump in the pages of the Herald a week or so ago. He extolled what he saw as Trump’s virtues – his powers of leadership and strength – and lambasted those who found Trump’s values and morals to be beyond the pale as “haters”.
Sadly for poor Mike, no sooner had he committed these views to paper than we (and he) were treated to the bumbling debacle of Trump’s meeting with Vladimir Putin in Helsinki. For the second time in as many months, the American President had engineered a highly publicised meeting with a notorious dictator and, after celebrating, in each case, what he described as a triumph, had emerged with little achieved other than further damage to his claim to be a master deal-maker.
In the cases of both Kim Jong Un and Putin, Trump seems to have been remarkably subservient to his interlocutor – to the extent that it seemed that he dared not say anything, at least to Putin, that might displease him. It was almost as though Trump was so impressed by, and perhaps envious of, the dictator’s powers (not least, to order the execution of critics or opponents) that he was completely unmanned.
His obsequiousness in the presence of Putin inevitably revived questions about exactly what Putin “has on” Trump – to the extent that there was speculation in Moscow that Trump had been “turned” and was now an agent of the Kremlin.
Whatever the truth of that, we were shown a President in Helsinki who preferred to believe Putin (for whom, the record shows, “truth” has no meaning) to the advice given him by his own intelligence chiefs and who was then so frightened by the outrage at his performance expressed, not least by his own supporters, that he ran for cover with a series of implausible denials that he had not actually meant what he had so plainly said.
So much for Hosking’s vision of a “strong leader”. What we had instead was a President who couldn’t negotiate his way out of a paper bag and who, when he was called to account, couldn’t even organise his words as they came out of his mouth.
Even if Mike Hosking were now to concede that his hero-worship of Trump was grotesquely misplaced, what we should remember is his willingness to overlook – even give a pass mark to – Trump’s misogyny and bigotry and to his well-documented moral failings in his personal life. Hosking’s tolerance of these attitudes should surely leave us with a valuable lens through which to judge the views he expresses in respect of the domestic political scene .
Th fact is that Trump’s performance in Helsinki taught us a great deal about the President who is allegedly committed to “putting America first” but who ran away at the first sound of gunfire. Both Trump, first, and then Hosking, have been holed below the water line. Wouldn’t it be welcome if they were both, as a consequence, now to sink without trace?
Bryan Gould
20 July 2018
Noise Pollutes
Yesterday was wonderfully warm and sunny at Ohiwa Beach where we live in the Eastern Bay of Plenty. Our enjoyment of the winter sunshine, as we sat on our deck overlooking the beach, was however ruined by the noise made by a small motor cycle as it roared up and down the beach for a couple of hours.
The bike was ridden by a boy of school age who obviously relished the sense of freedom and speed produced by riding at full throttle. He would no doubt have been surprised to be asked to desist, on the ground that he was spoiling the enjoyment of many others (and not least that of a seal sunning itself on the beach); and in today’s selfish age, he would not have thought for a moment of doing so.
The incident brought home to me, however, a truth that can easily be overlooked. At a time when we are becoming more conscious of our environment, we may not always recognise that one of the most pervasive forms of pollution is noise pollution.
There is of course growing evidence that high levels of persistent noise pollution can be very bad for one’s health, but I do not go so far as to suggest that yesterday’s young motorcyclist and his joyriding were a threat to our health or to the wider environment. But I am very much aware that there are others in our society for whom incessant high levels of noise are a real obstacle to the quiet enjoyment of their living space.
Those who live close to Auckland airport, for example, put up with the sound of aircraft landing and taking off every few minutes throughout the daylight hours and beyond. Many would no doubt say – “what do you expect if you live near to an airport?” But the affected residents reply that the noise levels have, over recent years, risen to intolerable levels and frequency, and that, since no one seems concerned to do anything about it, the prospects are that it will get even worse.
The general reaction to complaints about this phenomenon is that it is the price “we” (or at least “they”) must pay for the boom in tourism and for the greater efficiencies achieved by our airlines, and by Air New Zealand in particular – and there is no doubt that these factors have played an important part in creating a greater noise nuisance for those living under the flight paths.
There are now many more aircraft in the air, but there are other factors that have – the residents say unnecessarily – made the problem worse than it need be. The planes themselves are bigger and, in order to save fuel (and fuel costs), they fly lower and slower – and therefore more noisily) as they come in to land.
The technology that enables them to fly safely as they land has also developed and changed. New navigational systems (such as Next Gen) allow the incoming planes to fly more precisely so that they can land in greater numbers in a shorter time; the residents find the increase in the number of aircraft movements an additional burden to bear.
It is not hard to identify those who benefit from such developments. Air New Zealand has been able to produce record profits, and has been congratulated and thanked for doing so by its principal shareholder, the government.
And so, the issue resolves itself in the end into a familiar trade-off – on the one hand, the ordinary citizen and the environment in which he or she attempts to live a good and enjoyable life and, on the other, the interests and profitability of big business and the willingness of the wider public to see the one sacrificed for the other.
Our fellow-citizens are surely entitled to expect from the government they have elected to represent their interests, not least against the rich and powerful, (isn’t that the point of democracy?) that a better and fairer balance will be struck. To shrug the shoulders and say “too bad” or “that’s the way it is” is not good enough.
It’s time we understood that the argument that “it’s good for business” is not and should not be the last word, and leads us into a dead end.
Bryan Gould
13 July 2018
What Brexit Is Really About
The current turmoil in British politics, with leading Cabinet members resigning over the progress, or lack of it, in the talks over Brexit, will have left many readers in this part of the world confused as to what it is all about. Any attempt to clarify the issues will, of course, be greatly influenced by the views and prejudices of the person making the attempt, but what follows is my explanation – based on my close involvement in the unfolding saga over many decades.
The modern story must begin, of course, with the unexpected result of the referendum conducted in Britain in 2016, when the British people – asked if they wanted to remain in the European Union – replied with a narrow but clear majority for leaving. That verdict on over 40 years of membership no doubt owes much to the fact that, as I and many others had argued at the time, the original deal offered to Britain was a very bad one.
The Common Market, as it was then known, had been formed on the basis of a Franco-German deal, which offered the French the huge advantage of the Common Agricultural Policy in return for free trade in manufactured goods which was of great benefit to German manufacturing. The deal was so advantageous to those two original members that General de Gaulle was determined to make it stick and therefore vetoed Britain’s belated application to join until it had been concreted into place.
The result was always going to be a disaster for Britain (as I could see by virtue of a birds-eye view from my role, first, in the Foreign Office and then from my desk in the British Embassy in Brussels); instead of a rational trading pattern in which they imported efficiently produced food and raw materials from countries that offered them in return preferential treatment for British manufactures, the British taxpayer was required to subsidise inefficient French agriculture and then to pay again as a consumer by way of higher food prices – thereby negating Britain’s one major cost advantage as a manufacturing economy – while British manufacturers lost their preferential markets and had to compete in the same market as powerful and efficient German producers.
The outcomes were inevitable (although ignored by those enthusiasts for whom “Europe” had become the promised land). The British “trade gap” widened alarmingly, British manufacturing was decimated, the British taxpayer continued to pay large sums into the EU coffers, and Britain’s links with its traditional trading partners were weakened. These burdens bore most heavily on working people who found, in addition, that their employment prospects, available housing, and public services were greatly reduced and weakened by the influx of migrants from eastern Europe who were keen to exercise their right as EU citizens to settle in the UK.
The outcome of the referendum should not really, therefore, have come as a surprise – but it did. The bien-pensants – those who “know best” – were greatly attached to the notion of a Europe that carried with it a kind of cultural cachet, and they were remarkably insouciant about the price that was being paid. They were reluctant to accept the result of the referendum which they attributed to the “ignorance” and “racism” of those who “didn’t really understand” what a wonderful ideal “Europe” (which they conflated with the particular arrangement known as the European Union) really was.
They therefore set about doing all they could to reverse the result, through a sustained campaign (particularly in the pages of The Guardian, which gave up all pretence of impartiality on the issue) to hold a second referendum in which the “mistake” could be rectified. In doing so, they gave of course great comfort to the EU bureaucracy which was encouraged to believe that Brexit wouldn’t really happen.
That bureaucracy of course had its own agenda. They were terrified that other countries – like Greece and Spain, even now Italy – that had suffered terribly as a result of the undemocratic and banker-driven intransigence of EU rules and institutions might also want to leave. They determined therefore to show other backsliders that exit was not an easy option.
The result? The “Europe” held up as the key to a wonderful future proved to be remarkably impervious to the ideal of unity and more concerned with protecting its own structures and institutions than with building a cooperative arrangement with a departing Britain. The combination of a misguided rearguard action at home and a determination in Brussels to punish the British for their temerity in leaving has made the negotiation of a sensible arrangement almost impossible.
If these problems are to be overcome, the answers are to be found at least as much in Brussels as in Westminster and Whitehall. Those with hearts and minds that are big enough could take the Brexit talks as an opportunity to build a new “Europe” that could fix its many current failings by becoming more democratic and less wedded to the neo-liberal prescriptions of its central banks and bureaucracies. But, on the evidence so far, sadly, that seems unlikely and a goal that had seemed so inspiring looks certain to become mired in its own short-sightedness.
Bryan Gould
11 July 2018
Finding the Money
So, the chickens are coming home to roost – and with a vengeance. The tragedy for the new government is that the chickens were bred and raised by the previous government, and are only now flying in, in large numbers and with hefty price tags.
We are now getting some idea of the price that has to be paid for those “business-friendly” policies that were celebrated for their success in producing a “surplus” (at least for the government).
That price includes large numbers of underpaid public servants – nurses, teachers, midwives, care workers, Inland Revenue workers – and underfunded public services – health care, schools, keeping our water and rivers clean, and bio-security at our borders. The bio-security failure alone will cost the current government around $900 million – the amount awarded by the courts for the previous government’s negligence in allowing PSA to decimate the kiwifruit industry (and that’s to say nothing of the cost of the myco-plasma bovis outbreak).
Through no fault of its own, the new government is having to pay up for the mess made by its predecessor, and that costs money that cannot, it seems, be easily found. Every dollar paid to clean up the mess is said to be a dollar less for the government’s real aims – to improve our public services, to rescue our environment, to save families from poverty, to provide recent housing for everyone.
But is that really the case? There may be other shortages – labour or land, or skills or technology, or materials – but a shortage of money should not be one of them. How do we know that? Because, as an increasing number of experts recognise, and as our own experience teaches us, the government of a sovereign country need never be short of money.
This is because money, in a developed economy, is what the government says it is. Indeed, it is often called fiat money because it exists only by the say-so of the government – and, as the economist, Ann Pettifor, says, that means that “we can afford what we can do.”
Most of the money in our economy sits in bank accounts, and a large proportion of that money is created by the banks when they makes loans, usually on mortgage. The fact that the commercial banks create over 90% of the money in circulation out of nothing is still disputed by some (including by those who should know better) but is now attested to by the world’s central banks, by top monetary economists (such as Lord Adair Turner, former Chair of the UK’s Financial Services Authority and a leading advocate of “helicopter money”) and by leading economic journals such as the Financial Times and The Economist.
This raises the question – if the banks are allowed to create money out of nothing (and then to charge interest on it), why should governments be inhibited about doing so? And indeed, they are not so inhibited – governments all around the world have over recent years pursued policies of “quantitative easing”, and on a very large scale – and “quantitative easing” is just another way of describing the creation of new money.
The money created in this way has been directed to building up the balance sheets of the banks in the wake of the Global Financial Crisis, but there is no reason why it should not be applied to other (and more productive) purposes – as it has been in many countries, as well as New Zealand, in the past. Japan, for example, both today and immediately after the Second World War, used this technique to get their economy moving and to build the strength of their manufacturing industry ; in doing so, they followed the precepts of the great Japanese economist, Osamu Shimomura, who is virtually unknown in the West.
The Chinese government today follows similar policies. President Roosevelt in the US did likewise, before the US entered the Second World War, so as to build the strength of American industry and military capability; and, in New Zealand, Michael Joseph Savage authorised the Reserve Bank to issue interest-free credit in the 1930s so as to take us out of recession and finance the building of thousand of state houses.
All that inhibits our current government from using this technique is the fear that some will disapprove and regard it as taking risks with inflation. But, as John Maynard Keynes observed, “there may be good reasons for a shortage of land but there are no good reasons for a shortage of capital.” He went on to say that, if an increase in the money supply is applied to productive purposes so that output is increased, it cannot be inflationary.
As the new Labour-led government faces financial constraints not of its own making, why not emulate Michael Joseph Savage and authorise the issuing of interest-free credit to be applied to investment in stimulating new production? The Provincial Growth Fund would seem to be an ideal vehicle; funding investment in new infrastructure in this way would free up financial resources that could then be applied to current expenditure, such as paying the nurses and teachers what they deserve.