Based on my comment on Elizabeth Allen’s Substack, “Fact Check New Zealand" entitled: Great Expectations- How we believed the government could redress 40 years of neoliberalism
Failure to take maximum advantage of the mandate of overall majority gained in the 2020 election appears at first to be an inexcusable waste of an unprecedented advantage. Upon further consideration though, a host of factors that militate against pursuing radical reforms are at play:
1) The belief that Labour had ‘plenty of time’ and a mandate to ‘get things done’.
Back in 2020, I was at the 70th birthday party of a member of a Labour Party constituency branch a few days after the election. There was much triumphal crowing to the effect that Labour would get a run of “at least five terms” on the back of the Ardern government’s popularity. I didn’t enter into the discussion— not my place to harsh anyone’s buzz at a party, but I thought about Churchill:
Churchill was expected to win in 1945, but he was defeated by an unexpected landslide to Labour. His popularity was personal and based on his staunchness during the war, but collectively the Tories were tainted by pre-war class hostilities, thus immediately post-war he was voted out. Ardern was, in October 2020, our ‘war leader’ and was immensely popular on account of seeing New Zealand through the first wave of covid and it being a mere two months since the last cases were ‘defeated’ at a time when the rest of the world was in dire straits. Thus her election victory was a personal one rather than a party policy endorsement.
Ironically, the lack of deaths resulted in such a high level of indifference to the lethality of the disease that she was unable to maintain that popularity in the face of attacks from conspiracy fantasists and opposition politicians, who still maintain that saving probably 18,000 lives by ‘flattening the curve’ was not a worthwhile cause.1 Insularity and credulity both played into this as did too much ‘internet research’ during lockdown. The obvious loss of Ardern’s popularity and her subsequent resignation and replacement meant Labour had to fall back on policy rather than the personal popularity of the leader.
2) Politics played as a popularity contest
The nominally left parties are so content to rely on simplistic ‘trust us, we'll see you right’ platitudes, one wonders if they believe the electorate are incapable of understanding fairly simple ideas. Admittedly the parties of the right do the same to a large extent, but National can always parachute in a leader from the world of business (Key, Luxon etc.) and then play the ‘I’m successful in business so will run the country well’ schtick to great advantage. Labour can’t make this seemingly plausible analogy, but they do still have access to intelligent and articulate policy architects, so why do they not concentrate on formulating and explaining a coherent policy to obtain a clear mandate?
Now that every man and his dog think they understand ‘fiscal prudence’,2 the ‘left’ need to explain to the public how money works in the modern economy in order to thwart the charges of reckless fiscal deficit. It is also possible to demonstrate— both mathematically3 and by reference to actual examples of recessions prolonged by austerity (eg. the Great Depression and the UK’s abysmal performance since 2008) and ended by anti-austerity (eg. Roosevelt’s “New Deal”)— that austerity is always wrong, regardless whether it is a mistake, as it was in the 1930s, or a political straw-man, as it is now.
This would demonstrate clearly that the Neolib mantra of ‘good housekeeping’4— balancing revenue with the outgoings in pursuit of the ‘virtue’ of paying down government debt— is not just quack-medicine for an imagined sickness, it is purposely designed to limit government’s capacity to act by creating an artificial constraint. It is therefore a back-door assault on democracy. A collateral effect of this policy is the diminishing— either as an ‘unforseen consequence’, or a ‘price worth paying’— of the ‘Small to Medium Enterprise’ sectors of the economy from which, ironically, National / ACT gain the bulk of their support,5 while leaving the very wealthy in sole control of the country through the dominance of the interests of the finance sector in public policy.6
3) The schizophrenia of of a middle-class ‘Labour’ party.
Since the Labour Party is not primarily a party of ‘working class’ membership, but rather— by the demographic of constituency activists at least— largely a party of retired and active public sector workers, administrators and academics, it's highly unlikely that it would endorse ‘rocking the boat’ so vigorously as to undermine the perceived financial interests of that demographic. It’s an undeniable fact that— for anyone having a private or occupational pension (including the privately-run State Sector Retirement Savings Scheme), a Kiwisaver, and owning a house (plus maybe a flat in Wellington if you’re a ‘high-ender’) that one can eventually downsize from and take the equity for a comfortable retirement— things are not as simple as they once were. Boundaries between your ‘ethical self’, your ‘working class’ interest as a wage or salary earner and user of public services and utilities, and ‘investor class’ interests in property and pension become fogged (eg. Ardern’s “address housing affordability without diminishing New Zealanders’ primary asset” obfuscation) according to how successful your career, health etc has been, and increasingly, your age and inter-generational wealth expectations7. This is a poor platform upon which to build a cohesive policy, especially when the electorate is stuck in an almost universal, media-generated false paradigm that the money ‘pie’ is rigidly constrained and therefore adequate state services necessarily come at the expense of a diminution of private sector wealth.
Given the general misunderstanding of how an economy actually works and therefore what is actually achievable by public policy,8 is it any wonder that public opinion defaults to the simplistic views projected by National/ACT that government spending is bankrupting the country, causing runaway inflation etc? The efforts of a handful of bloggers and heterodox academic economists is no substitute for publicly accessible information endorsed and promoted collectively by those parties not wedded to neoliberal and emergent post-neolib authoritarian ideology. Their failure to attack the dominant narrative of the right over this matter calls into question their capacity to achieve any tangible progress.
Data extrapolated from here. My belief is that people remaining alive are invisible whereas dead bodies are not.
The false notion that the more foul-tasting the medicine, the more painful the surgery, the better the outcomes are likely to be.
Here, Prof. Steve Keen demonstrates how government deficit creates money for private sector business.
The “good housekeeping” mantra is compelling because it reflects the common experience of running a household or a non-bank business which has to budget with pre-existing money. Both the private banking sector and central government create (and destroy for that matter) new money- the first for commercial imperatives and the second for strategic governmental ones. New Zealand does have a debt problem along with the rest of the world- one of unsustainable household debt.
The real sickness of the modern economy is not government debt, it is the loss of personal spending power that sustains Small to Medium businesses as a result of unsustainable household debt to the finance sector.
…and this doesn’t even mean New Zealand’s “very wealthy”- since the country’s most profitable financial sector companies are largely owned, not by Kiwis, but by an assortment of international wealth-management funds, pension funds, other banking interests etc. For example, the major shareholders of ANZ banking are Blackrock inc, Vanguard Group and the reserve bank of Norway.
The parties of the right have no equivalent qualms about ruffling the feathers of public servants, since it is no secret that their ultimate objective is the dismantling of government with the exception, no doubt, of the military / police / corrections functions, though even these could in theory be privatised.
Bank of England, Money Creation in the Modern Economy.
The other big factor in Labour's disappointing last 3 years is the limited recognition of the need to remove “the iron cage of regulation" (as Geoff Bertram calls it) that makes deviating from neo-liberal ideology poltically very difficult. Coupled with the deliberate loss of public sector capability and institutional knowledge to support and implement change.
(This iron cage includes the Public Finance Act, the Fiscal Responsibility Act, the State Owned Enerprises Act, the Public Sector Act, the Commerce Act, The Reseeve Bank Act, and the restrictions and limitations arising from the various trade agreements)
I'm a former Labour voter. I also scrutineered for them in 2014. I was even stupid enough to vote Greens* in 2017. I have never voted right wing in my life.
But my hope now is that after the last 3-4 years that they get hung out to dry never to come back. Sure that will leave us with their best mates (not meant in jest) the Nats but hopefully in 3 years the country will see them as clowns *as well* doing the bidding of billionaires just as Jacinda & her fellow fascists (look up the fucking definition) did by enabling the biggest, nastiest corporates on this planet to rip whatever capital was left here (after the neo-liberal nightmare of 40 years or more - still going) back to NY or Toronto or to whereever those Pfizer shareholder scum (mostly under the umbrella of Blackrock these days instead of the large banks of the world, check their shareholdings) live.
It's you who is the problem.
* identity politics twats who don't have an environmental bone in their bodies.