Category: economists

I am so sick of this obvious lie, pt 2

Unemployment under Lab and NatAnother obvious lie too many National supporters believe is that Labour are bad for employment (because they raise the minimum wage too fast), and National have “solved unemployment” (because they’ve made it harder to maintain benefits):

National supposedly solved unemploymentkey labour anti jobs party

Now, it is true that Labour raise the minimum wage much faster, and that National cut welfare (in a recession!). But the unemployment rates have been more like the other way around,* and anyone suggesting National are better than Labour at keeping unemployment down is either believing or promoting a lie.

Actually, it’s a couple of lies… but they’re both obviously bollocks to anyone who’s spent five minutes looking into them:

LIE 1:

“Raisng the minimum wage reduces jobs”

TRUTH 1:

Sydney Morning Herald

new york times

Business Insider

CEPR 1

CEPR 2

DOL 1

DOL 2

treasury

As usual, Gordon Campbell says it best:

If, as Key claims, Treasury has done research that shows major job losses would result from gradual increases in the minimum wage, then this amazing information would be world news – because the vast weight of academic research around the world ever since the groundbreaking David Card/Alan Krueger work in the US fast food industry 20 years ago, is that it would do no such thing.

LIE 2:

“National have solved unemployment by making it harder to get the benefit”

TRUTH 2:

I’ve covered this before, and so have many others. Basically, kicking people off the dole (or DPB/invalid’s/sickness benefit) doesn’t magically put them into jobs; it just increases the number of people lacking either work or welfare (which has hit a record 110,000 since National’s bennie-bashing “reforms”). Creating a desperate unemployed person doesn’t create a job for them to go into.

This confusion arises from a basic failure to understand the difference between individual problems/solutions and socio-economic problems/solutions, as sociologist C. Wright Mills pointed out 55 years ago:

Mills quote

* It started to get bad under the Lange (& Douglas) Labour government, which was actually more like a Bolger/Key National government than a Labour one. Of course, just like with debt, things are more complicated than one graph could show.

PS: Graph and truncated y-axis from tradingeconomics.com; annotations mine.

Politics without politics – a local election guide

Progress without PoliticsPhoto from David Small

We have a week and a half to send in our votes for local body elections and then a few days later we’ll have a dramatically changed city council. Quite an exciting time, but the main barrier to informed voting seems to be that most candidates are doing their utmost to portray themselves as being non-party-affiliated and sometimes even ‘non-political.’

For some reason, this phenomenon seems particularly strong in Christchurch – Wellington have a Green mayor and Labour candidates.

I guess candidates want to cash in on cynicism about politicians, and appeal to our lazy post-modern ‘post-political’ ‘post-ideological’ political ideology. But it does make it rather hard to tell what they’re actually standing for, when nobody really follows local politics, and then all we get from the candidates is vague billboards and a paragraph of meaningless platitudes.

I’ve been looking into what lies behind these meaningless platitudes. Here’s what I’ve found out – four quick questions I think are worth asking:

1. Who voted for Marryatt’s pay rise?
2. What do the parties mean?
3. Who are the independents?
4. How about the mayoral candidates?

1. Who voted for Marryatt’s pay rise?

The seven right-wing councillors who voted for Tony Marryatt’s $68,000 pay rise won’t hold the balance of power anymore after the election – Bob Parker, Sue Wells and Barry Corbett are stepping down.

But the other four are standing again – Jamie Gough and Claudia Reid are standing for I-Citz in Fendalton-Waimairi, and Ngaire Button and Aaron Keown are standing for City 1st in Shirley-Papanui. There’s been some helpful billboard adjustments to remind us of who they are.

Gough is grovelling and asked to be forgiven, pleading youth and inexperience. $538,529 probably doesn’t sound like too much to a member of the Gough family… I guess he didn’t realise how pissed off everyone would be.

Anyway, hopefully voters haven’t forgotten how pissed off we were. James Dann is predicting two of the four will make it back – hopefully it’s less.

2. What do the parties mean?

I-Citz (Independent Citizens) ≃ National

I-Citz are “in essence, the local body version of the National Party.” Their typo-riddled website boasts of formal independence from national political parties, and National officially don’t dabble in local politics (see John’s comment below). But I-Citz’ candidates are all right-wingers such as the aforementioned Jamie Gough, Helen Broughton (who’s taken a better stance on Marryatt than her I-Citz colleagues) and conservative blogger John Stringer.

The People’s Choice = Labour

People’s Choice (formerly Christchurch 2021) was founded by Labour Party members in 1995. They’re open about their connection to Labour on their website.

The current People’s Choice councillors (Yani Johanson, Jimmy Chen, Glenn Livingstone) seem to have done pretty well from what I’ve heard.

City 1st ≃ National/ACT

A new spin-off of I-Citz and the now-defunct City Vision, City 1st try harder than the other parties to act like they’re not a party. I challenged them about this on their Facebook page and while Ngaire Button responded, she didn’t give me a good explanation of what makes her party not really a party. There were a few more comments today, but before I got a chance to read them, they deleted the whole thread and seem to have disabled all comments on their page. Thankfully I was paranoid enough to expect this and save some screenshots.

Anyway, Aaron Keown stood for ACT in the 2008 general election, while Button appears generally right wing and stood for I-Citz last time.

Saying the names of these ‘independent’ parties with a Sean Connery accent seems to make them more accurate.

A ‘network of the like-minded’ ≃ ??? Greens ??? Student Volunteer Army ??? Gap Filler ??? A Paradise Built in Hell ??? Well-meaning yuppies ???

I learned today that apparently four other council candidates are standing as a loose alliance – Raf Manji, Vicki Buck, Ali Jones (more on them below) and Erin Jackson.

They’re not using shared branding and they don’t have a group name, but they know each other, agreed to stand in four different wards, and seem to be into the same kind of things: participatory democracy and budgeting, environmental sustainability, community collaboration, ‘e-democracy’ and social entrepreneurship. All four are endorsed by It’s Our City.

They’re arguably just as much of a party as the others, and perhaps a lot of the same criticisms I’m making to City 1st apply to them too. But I think they’re a more genuine alternative to ‘party politics’ than City 1st – they seem to have a quite different view of how to do democracy. They also seem more genuinely bipartisan – they seem keen to work with Dalziel as mayor, and they seem more left than right, but not in really a traditional sense. But they’re enthusiastically endorsed by the right-leaning Sam Johnson, who’s not standing this time but he’s amongst their group.

At least, this is the impression I got from the one not-very-critical article I read. I’m not sure how reliable that article is (Gen Y? Really? Vicki Buck was mayor when Gen Y-ers were born). Seems interesting though.

3. Who are the independents?

The best way to find out about unaffiliated independents seems to be to google them and see what they’ve done before, and check if they have blogs etc. I can only comment on a few…

Fendalton/Waimairi: Raf Manji seems an intelligent guy with his finger in a lot of pies. My impression was that Faimeh Burke is most famous for her husband, Sir Kerry Burke, a former Labour MP and one of the ECan councillors the government dumped in 2010 (but see Jean-Luc’s comment below).

Shirley-Papanui: Ali Jones is a prominent critic of EQC and advocate for claimants. Jono Corfe is the quizmaster at Chch’s best pub quiz.

Riccarton/Wigram: Vicki Buck is bringing herself back (yet sadly without taking great pun opportunities). She was a popular (independent) mayor from 1989 to 1998 and since then has worked in clean energy and set up Unlimited and Discovery One schools.

4. How about the mayoral candidates?

Lianne Dalziel = Labour

I almost forgot to the mention the mayoral race, because it seems to be in the bag for Lianne Dalziel (but please nobody mention seismic shifts). Dalziel is running as an independent but she’s been a Labour party MP since 1990 (she’s stepping down to run for mayor). Since the earthquake she seems to have battled for the people of Christchurch better than most local MPs, particularly for her Christchurch East electorate. It’s a shame she won’t get a chance to take Gerry Brownlee’s job when the next Labour government gets in. But I think she’ll make a pretty good mayor, particularly if she follows through on social housing promises.

A fun fact about Dalziel that you won’t read elsewhere: as an idealistic teenager just returned from Cambodia, I e-mailed every MP and asked them to sponsor me for the 40 Hour Famine. Lianne Dalziel was the only one who did – she sponsored me $40.

Paul Lonsdale ≃ National/Business

Dalziel’s main competition, Paul Lonsdale, is best-known as manager of the Central City Business Association, which meant driving the youths away from the Hack circle before the earthquake, and managing the Re-Start container mall after it. He thinks political organisations should be run like businesses rather than political organisations (so he’s moving in the opposite direction to the ‘post-corporate’ democratic ideas of Manji et al).

Following a familiar theme, Lonsdale claims to be “completely apolitical,” but all his friends seem to be National Party/I-Citz members, and he thinks we need to work alongside Brownlee et al rather than challenging them. He also thinks dumping ECan democracy and selling council assets makes sense.

The ideology of middle class struggle

fwp-pillows
I thought this Sunday Star-Times article was quite interesting.

Three economists (from Infometrics, the NZ Institute of Economic Research and the University of Auckland) all agree that although the middle classes in the United States have been hit hard since the global financial crisis, it’s not accurate to say that the same is true here.

Despite the myth of the “middle class squeeze” and politicians’ attempts to appeal to the embattled middle classes, in New Zealand it’s the poor who have been hit hardest by the recession (and by government responses to it).  The middle classes, on the other hand, have “never had it so good”.  While the economists disagree about whether the rich are doing better or worse, all agree about “the growing level of inequality in New Zealand – it’s this chasm between our poorest and richest that’s probably the real issue“.

The article also provides eight stories from middle-class people about how they’ve been coping financially in recent years.  Karol at The Standard points out that this undercuts the above points somewhat, because they don’t give any stories of the people actually struggling.  Also, the stories are foreshadowed by this rather peculiar statement:

“Of course, this is about statistics – the average. This isn’t you, living from pay cheque to pay cheque, scraping together the school donation, the football subs, the car repayment, the Sky bill, the rent for the bach this Christmas.”

This might be an odd expression of post-modern skepticism about attempts at pure objectivity, and/or it might be ordinary garden-variety dumb reporting. It seems to be saying: never mind the facts, we know that you’re struggling, and an evocative description of your hypothetical woes can substitute for an argument. But maybe they just meant that you may be struggling even though on average the middle class aren’t.

Some of the stories do represent these exceptions… Those who have lost or quit jobs in manufacturing and the public service, or lost houses in the earthquakes, have indeed found things getting tougher, as you might expect.  However, they’re all pretty philosophical about it, and even their complaints are about first-world, nice-side-of-the-tracks problems:

“An expensive holiday is shelved and Mr Barton is holding onto his ageing television and car.”

“We were lucky to have steak at all. Sky was going to get the chuck. Any slight luxuries were gone.”

“they hid their financial struggles from their son and refused to withdraw him from private school”

So what’s behind the myth of the “middle class squeeze”?  Is it just lazy importing of American complaints, or is there more to it than that?

I think the best way to understand it is to see it as an ideology, in a critical or Marxist sense: it’s a worldview that functions to justify and support the present economic system and current unequal power distributions.

People from all levels almost always feel like they’re struggling to make ends meet, because their expectations rise with their incomes (usually staying just ahead).  That’s how market capitalism works; dissatisfaction and desire is what keeps the wheels turning.  If people were content with what they have, capitalism wouldn’t work, or at least not the way we know it (maybe it could work in a nicer, more sustainable way).

This malaise is always there; we’re born into it, and too often we let ourselves remain in it.  And I guess when we’re constantly hearing about tough financial times and how our class is supposedly suffering, it’s more socially acceptable for middle class people to express it openly.

The ‘Returning Kiwi’, Emily Swan, gives voice to this plight:

Does Swan appreciate that with that income and a house, many Kiwis would see her as well-off?

“Yes! The average household income is what, $30,000? Crazy. But then a lot of people are sending their kids to school without breakfast. We are grateful for what we’ve got.”

And yet . . . “I look at my age and think, I’m nearly 40 and I’m still living from pay-cheque to pay-cheque. What do I pass on to the next generation? Will I ever pay my mortgage off? I do feel like I’ve f—ed up somewhere along the way.

If she’s “f—ed up somewhere”, it’s not in not having enough money; she and her partner earn $130,000 between them, but people earning twice as much probably feel the same way (and some people earning half as much have learned not to feel that way).

Perhaps situations like this can serve as a reminder not only that perceptions don’t also match reality, but also of just how mouldable our perceptions, desires and expectations are.  Hopefully we can learn to mould them ourselves to what we think they should be, rather than letting them be moulded by advertising, conformity and the pressures of a consumer capitalist society.