Tagged: ignorance

I was wrong

Election results before special votes (specials might change one or two seats but nothing substantial)

Election results before special votes (specials might change one or two seats but nothing substantial)

One initial thought: While certain people get up in arms about using the MMP threshold system to gain representation, the real problem is how big parties can use it to deny representation… whether Internet Mana or Conservative. So RIP Internet Mana and even the Conservatives, who earned their right to air their lunatic views in Parliament with 19 times United Future’s votes.

Also, John Campbell is quite wrong to say the deaths of these two shows that “money cannot buy politics in New Zealand.” Who does he think pays National’s extremely successful PR people? What does he think is the force that keeps mainstream media so uncritical, anaesthetising, anti-intellectual, anti-policy and pro-National (despite his best efforts to work against that)? In fact, what it shows is that money is no substitute for good strategy, being in tune with dominant opinion in your society, and/or (in our unjust electoral system) support from a major party.

Anyway, onto how I was wrong…

Of all the blogs I’ve written, I think the most off the mark was this one where I said I was “(tentatively) happy about Internet Mana.” Second would be this one where I underestimated how bad Dotcom’s failure at the Moment of Truth was. I may have been wrong when I backed Cunliffe for Labour leader too, but I don’t know if it would have made much difference if Shearer or Robertson or Jones was in charge (probably the main difference would be that if Shearer had stayed on, there would have been a cleaner break post-this-election).

I still like pretty much everything I previously liked about Internet Mana. I still think the deal is ethically legitimate given the unjust threshold system. And it was a valiant idea to try and appeal to the young, poor and disengaged people who stay home in their droves on election day. But as it turned out, the experiment failed. It looks like turn-out-per-enrolled-voter was only slightly up this time, Internet Mana’s vote was only slightly higher than Mana’s last election, Hone lost his seat so Internet Mana are out of Parliament, and the Key government is returned with an increased majority. So I was totally wrong about the strategic value of the Internet Mana alliance.

I was wrong because I underestimated the backlash of dominant opinion in NZ against Kim Dotcom (not so much when he was a victim of the US-style-US-instigated illegal police raid, but certainly after he started trying to throw his own power around). This felt its effect in a few ways:

  • It looks like for every apathetic Gen-Y-er vote Internet Mana won for the left, they scared several boomers, conservatives and Stuff readers towards the far-right. Though this isn’t 100% clear. Labour started to drop in the polls after the Internet Mana deal. But they also dropped after the WhaleOil + Herald smear on Cunliffe that turned out to be 95% bollocks, but not before doing its damage in the polls. And, bizarrely, Labour dropped after Dirty Politics too.
  • NZers don’t like what they see as “dodgy deals,” though they’re hypocritical about it: they’ll forgive National’s Epsom and Ohariu cups of tea, but when they already didn’t like Harawira or Dotcom (and didn’t understand the ways the two parties are consistent; thinking it was entirely a money thing), the deal was another reason to oppose them and anyone who might end up in government with them.
  • Dotcom and the Internet Mana deal seems to have turned Te Tai Tokerau voters off Hone Harawira enough that they could be convinced by Labour, National, NZ First and the Māori Party to vote for Labour’s Kelvin Davis. Labour had no choice but to oppose Internet Mana, a populist boomer swing voter’s nightmare, given that they rely on the opinions of such voters for success. But they tried to have their cake and eat it too by not unequivocally ruling Internet Mana out of any kind of government agreement, which was understandable given they’d be struggling to form a government without them, but ultimately a big mistake. They were close enough that Internet Mana presumably scared baby boomers and conservatives away from Labour, but far enough away to kill off Internet Mana and waste thousands of change-the-government votes, including my own.
  • Dotcom failed at the “Moment of Truth” worse than I previously acknowledged. He’d been promising for months to provide evidence Key knew about the US plot against him earlier than the day before the raid. Instead, he made the MOT entirely about spying, and leaked a bizarre e-mail without anything to back it up, which didn’t prove anything – I still can’t figure out if it was fraudulent and, if so, whether Dotcom knew it was fradulent or not; but it’s certainly not convincingly real. The annoying thing is it’s quite likely he’s right about the “political pressure” on his case. But his e-mail took credibility away from that theory, rather than adding it.
  • Even without that failure, the cartoonish and manipulative way he went about the MOT made it too easy for people to simply ignore all the genuinely alarming revelations about spying at the MOT, and Key’s dishonest and desperate (yet apparently successful) defence. Dotcom tried to use the event for his ego and his desire for revenge, rather than for the good of the country. If he wanted to raise awareness about spying and really get through to NZers about it, he should have:
    (a) not talked it up but kept it quiet, exceeded expectations and let the revelations do the talking;
    (b) kept revelations from spying separate from revelations about his case, or at least made sure he had proof about the latter before revealing anything;
    (c) released the info months ago rather than five days before the election in a transparent attempt to influence the vote; and
    (d) stayed in the background himself got a respected figure from the left and a respected figure from the right (e.g. Graeme Edgeler) to front it.
    (Possibly Nicky Hager should have followed a similar strategy with Dirty Politics: not just writing about the WhaleOil stuff, but making sure he also focused on some of the dodgier things Labour have done… even if it meant dredging up old news. I don’t say this for ethical reasons – “balance” is an illusion and he’s perfectly justified in having a specific focus on WhaleOil and associates – but for rhetorical strategy reasons. If he’d come across as more bipartisan it would have been harder to write him off as a “left wing conspiracy theorist.” He could have left it to the readers to realise National are so much worse at Dirty Politics than Labour.)

Kim Dotcom clearly has no idea about NZ culture, and the NZers he had alongside him (Laila Harré, the Mana people, Bradbury, Edgeler etc) should have known better, just as I should have.

To Dotcom’s credit, though: tonight he’s acknowledged that he poisoned the party with his toxic brand. (His concession speech is in stark contrast to Cunliffe’s denial. If Cunliffe had said he’d have to go back to his party and see who they wanted to continue leading the party, they may have let him stay on. But saying he’s going to hold onto the leadership probably guarantees he’ll be rolled… the only thing leaving him there is the fact they don’t have anyone better).

I’m not going to say I was wrong to vote Internet Mana, but I was definitely wrong not to realise the experiment would actually make Key more likely to be re-elected, not less.

(Of course, there are other reasons for tonight’s result too: Labour’s bitchy in-fighting, lack of consensus about what they stand for, and general incompetence; National still being extremely good at PR; a docile and blatantly biased mainstream media; dominant “common sense” in NZ being a lot more in line with National’s confident neo-liberalism-with-lip-service-to-welfare-state than anything any other party’s offering; etc. And of course it’s ridiculous that Kim Dotcom and Hone Harawira – whose policies are quite normal in Germany or pre-1984 NZ – are seen as dangerous extremists while ACT are seen as acceptable coalition partners and the Conservative joke party won around over 85,000 votes. But it would be denial to blame the media and dominant ideology entirely – the various mistakes of the left-of-NZ First also played a significant role).

PS: I was also wrong about the polls – turns out they were actually biased AGAINST National this time. Or maybe the media were right that the Moment of Truth aftermath and Dotcom backlash actually gave a bump to National. Or maybe soft National voters / Labour voters without hope freaked out when there was a last minute turn away from National and it looked like Winston Peters or Colin Craig might be in government? It’s impossible to know.

PPS: I was also wrong to spend so many hours writing blogs during the last parliamentary term. This will be my last blog for Cut Your Hair, at least for the foreseeable future. Thanks all readers and sharers and commenters etc; it’s been cathartic if nothing else.

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”


Sydney Morning Herald

new york times

Business Insider






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”


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.

Averages, intentions and inequality: more Key trickery

median vs mean

Graph from latest Household Incomes in New Zealand report; yellow and pink annotations are mine

John Key is being a Spurious George again. In explaining why he’d love to cut taxes for (mostly) the rich, but just can’t afford to yet…

Key pointedly said that when National took office the average wage was $47,000 a year but had risen to around $55,000 today, and was expected to climb to $62,000 by 2017. This was creeping towards the top tax bracket, where salary earners pay 33c in the dollar for earnings over $70,000.

“I don’t think it was anyone’s intention that someone on the average wage would be paying the highest marginal tax rate in New Zealand,” he said, echoing arguments National has been making in private for months.

Well, Mr. Key, it also wasn’t anyone’s intention for the incomes of the rich to rise so much faster than those of the poor, pushing up the average (mean) income to a level less than 30% of people reach. (Actually it was some people’s intention: right-wingers who think inequality is a good thing)

Key is trying to give the impression that the average (mean) income is the income earned by the person in the middle. But mean doesn’t measure the middle of the people, but the middle of the money; and of course the money is weighted towards wealthy outliers at Mr. Key’s end of the spectrum, who push the average up with their exponentially higher incomes.

A far more useful statistic is the median income: the amount that half the people earn more than, and the other half earn less than. This truly represents the average Kiwi. The median individual income is almost exactly $30,000 p.a. – just under the middle of the third-to-top tax rate band.

It’s actually getting more and more misleading to portray average income as a reflection of middle-income earners: As inequality worsens, the “middle of the money” (average income) is moving further and further from the “middle of the people” (median income). My eye makes it less than 10% difference in 1980, up to about 25% now:

Mean and median over time

Graph from latest Household Incomes in New Zealand report; yellow and pink annotations are mine

It’s also worth noting that the increased average income Key mentions has accrued almost entirely to above-median earners:

income changes recession and recovery

Graph from latest Household Incomes in New Zealand report; yellow and pink annotations are mine

Another problem with mean income figures is they hide inequalities like these and portray a boon for the rich as a boon for everyone.

I do agree in principle with indexing tax-rate thresholds (in fact, all thresholds… *cough*student loan repayments*cough*) for inflation, but Key’s trying to use that principle as a smokescreen for more tax cuts to the rich, spinning this as a release for the average NZer from crippling over-taxation, which is not true on any level whatsoever. Taxpayers between the median and mean incomes actually pay the lowest proportional tax:

Salmond Fig 8-2-01

Graph from Rob Salmond; yellow and pink annotations are mine

And in the context of a supposedly progressive tax system it’s the rich who are really best off:

“At very low incomes, New Zealand’s taxes are a little above the OECD average … But for high incomes, our overall “tax wedge” … is the lowest in the developed world.

Our tax system asks too much of those with little, and too little of those with much.”

This would only get worse under National’s proposed 2017 tax cuts.

In any case, if Key is really worried about too many NZers in the top tax bracket, there’s an obvious solution: Implement a new top tax rate(s) for the super-rich, like most similar countries have:

income taxes NZ aust
income tax UK france
income tax US

Soooooooooo: whatever people’s intention about who should be on the top tax rate, it’s clear John Key’s intention in referring to the mean income, rather than the median, is to mislead (or perhaps he simplify misunderstood statistics in a conveniently misleading way, as with child poverty at the last debate). Sadly he’ll probably largely achieve that intention.

Don’t believe the scaremongering on capital gains tax

capital gains tax first world problem

The unholy trinity of National, right-wing blogs and the mainstream media are scaremongering about Labour et al’s proposed capital gains tax again. Because it’s new and because it’s a tax, it seems scary and there’s easy political points available in opposing it. But in fact most countries have capital gains taxes. New Zealand’s tax system is one of the most generous to the rich, and part of that is our anomalous lack of CGT.

The current scaremongery relates to inherited family homes of deceased family members. The impression John Key et al are putting across is that a grieving, struggling family will have to scramble to sell their deceased parents’ family home to avoid being stung with a hefty capital gains tax they can’t afford. IF that were the case, a one-month “grace period” certainly doesn’t sound like long enough to grieve, get organised & sell the house to avoid financial ruin.

But it’s NOT the case. Even without a grace period, only profit since inheritance – I repeat, profit since inheritance – would be taxable (and at a modest 15%). If a family inherited a house worth $400,000, and sold it a year later for $430,000, they’d incur tax of $4,500, but they’d get to keep the other $25,500. They’d still be $25,500 better off than if they’d sold the house straight away, and $425,500 better off than if they hadn’t inherited the house.

This is no different from inheriting any other profitable asset. Currently, if you inherit a company, and it makes $30,000 profit over the next year, you’ll be liable for 28% ($8,400) company tax on that profit. There’s no “grace period” there. And more importantly, there’s no “grace period” on the profits – 72% of which you’ll keep and no doubt enjoy.

So it’s extremely dishonest of Key to portray families inheriting profitable assets as somehow hard-done-by, simply because they’ll incur tax on those profits. Truly hard-done-by families are the families of (increasingly numerous) people who’ve never managed to buy a house (largely because of tax-free property investment). Those families will receive no inheritance (let alone profitable inheritance), and many struggle to pay for (increasingly exorbitant) funeral and burial costs.

Years from now, if my siblings and I inherit my parents’ house and it makes capital gains by the time we get around to selling it, we’re not hard-done-by if we incur tax on those gains. We’re lucky my parents own their home in the first place, and have something to leave us (in fact, something that continues gaining value until we sell it).

That said, I do tend to agree there should probably be a grace period of maybe six months, because the tax is supposed to target people who buy extra houses for profit, not people who gain an extra house by accident because a relative died. Besides, it may take some months to decide whether they’ll sell it, keep it as a rental, or have other family move in (in which case it remains a family home, thus exempt from CGT). But a grace period would be an act of compassion to people who don’t really need it; certainly not a demand of justice or need.

Of course, Cunliffe didn’t help his own cause by remembering the policy wrong and declaring unequivocally that the grace period will be one month. In truth, the length of the grace period is a detail that they’ll leave to an expert advisory group to work out. It was incompetent of Cunliffe not to know this.

Anyway, despite those two caveats: don’t believe the hype. Look into it, listen to David Parker’s explanation, think about it, etc. After doing so, no right-thinking person would think there’s anything to worry about.