Me too

No, not that one.  This one is the  apparent desperate desire of the new leader of the National Party to align himself with the aims and ambitions of the current government.   It was all there in his speech on Sunday (complete with his desire to suggest that he had really become what they call in the US a “cafeteria Catholic”, and that his faith would make no difference to any government he led).

I saw a National-aligned commentator this morning commenting sceptically

Perhaps, but I don’t think that even in those sorts of circumstances opposition parties used that sort of approach in New Zealand towards the end of three term governments.  I was never a John Key fan, and there were a few issues where he actively chose to adopt questionable policies adopted under the Clark government, but even Key promised more (even if he never delivered) than just to be a more competent executor of Labour’s agenda.  I went back yesterday and read a few of those 2008 speeches just to check. (And the 2008 campaign took place amid a  severe recession and global financial crisis, both deepening by the day.)

Who knows, perhaps it will win a few votes.  Perhaps, but if you believe the stuff Labour, New Zealand First, and the Greens say they want to do, why not vote for them?   After all, if execution has not exactly been a hallmark of the government –  and Muller, of course, makes some entirely fair points there – why not vote for people who really believe it, rather than the pale imitations who just want office (or, in some cases, may just be in the wrong party).  After all, there is such a thing as learning-by-doing and some ministers at least are likely to improve with time.   Muller himself has no ministerial experience (as a reminder, a country is not a company), and his deputy was a fairly junior minister at the end of the previous National government where she was not regarded well by officials and as Minister of Education managed to deliver a speech as wordy and hard to read as a piece of legislation.

Setting aside the heartwarming biographical bits, the speech seemed to be a mix of spin, historical errors, and an utter lack of any ambition or promise.

There was, for example, the laughable description of the wage subsidy scheme as “bipartisan”.  I guess New Zealand First and Labour make up the coalition Cabinet, so perhaps that really is bipartisan, but just because you supported an initiative the government took doesn’t make it a “bipartisan” one.  It is doubly strange because a few lines later he notes that we can’t “freeze-frame our economy, with never-ending and unaffordable wage subsidy schemes”.   Were they “unaffordable” or bipartisan” or both?

Muller is clearly keen on selling the merits of the Key-English government, and I know it is a commonplace to say they “got us through” the “global financial crisis” as if (a) there was much specific to get through (the crisis itself was mostly other countries’ problems, and (b) it had not taken 10 years –  10 years –  for the unemployment rate to get back to pre-recession full employment levels.   Might not be a very promising line for suggesting National is well-placed to handle this recession/recovery better.

There was the strange claim too that the previous National government did not raise taxes.  Even if you allow for the GST/income tax switch as roughly neutral, this was the government that raised effective corporate tax rates, imposed a brightline test (and thus tax) on housing, dramatically increased tobacco taxes, increased the taxation of Kiwisaver, and so on. And and there was fiscal drag too.   The emphasis of the fiscal adjustment might have been on the spending side, but there were increased taxes.

There was also the weird claim that “Bill English developed the Living Standards Framework”, except….he didn’t, Treasury did.  And all while not offering the sort of analysis and advice that the Minister and his office often claimed to really want.   Pledging to use it in future National Budgets is just another example of the me-too ism and the same avoidance of the hard issues –  productivity failure –  that seemed to drive The Treasury in the first place.

As a young man Muller worked for Jim Bolger when the latter was Prime Minister…..but only after the reform era had already ended.   Now he is desperate to distance himself and National from the reform era –  sounding a lot like Grant Robertson used to sound re the Reserve Bank Act, even as his actual reforms made next to no difference.   Thus we read

I was in for a bit of a shock when my own party took over in 1990 and moved even faster, allowing unemployment to reach 11 per cent in 1992 – the worst since the Great Depression, but a record that will probably be broken over the next year.

I think both Labour and National could have done those economic reforms more gently, more caringly and with a greater sense of love for our fellow Kiwis.

If we look across the Tasman to our sibling rivals in Australia, it pains me to say that Bob Hawke, Paul Keating and John Howard managed the reform process better than David Lange, or my friend and mentor Jim Bolger.

I believe the speed and sequencing of the economic reforms did terrible harm to the institutions of our communities, and to far too many of our families.

The same Australia whose unemployment rate in the 1991/92 period peaked at almost exactly the same (11.1 vs 11.2 per cent) as New Zealand’s, and whose unemployment rate has been higher than New Zealand’s for most of the subsequent 30 years.     Quite what does Todd Muller think  –  specifically –  should have been done differently?   This cartoon is from the late 80s.

douglas

And yet despite disowning his own party from its second to last term in government, Muller expects us to believe that we can count on them to handle the recovery better because  “economic management is in our National DNA”.  The same party that (a) was happy for the unemployment rate to stay unnecessarily high for 10 years, and (b) which made no progress at all (rather the contrary) in closing the glaring productivity gaps, reversing the decades of underperformance.  Oh, and which promised to fix the housing market and did almost nothing.   Why would we?

It was sad and sobering to get through Muller’s speech, reread it again slowly and carefully, and find not a hint of any concern about productivity (however expressed) or housing.  It isn’t that long ago since National put out a discussion document on the economy which did actually seem to recognise the productivity failings, and that those failings mattered for whatever else individuals or governments might want to do.  No more apparently, even though the failure hasn’t just been magic-ed away with the virus.   And if house prices may fall back a bit during the current recession –  as they did (15 per cent or so in real terms) in the last recession –  that isn’t fixing the underlying problems is it?  No ambition, no promise, not even any mention.

All we seem to get is the promise of a bigger welfare state.   But again, if that is what you want why vote National?

If you were really erring on the generous side, determined to find a silver lining, there was this line near the end of the speech.

I’m proud of what National and New Zealand has achieved since then [when he joined National in 1988], but I do not yet see an economy that is truly internationally competitive or agile enough to maintain and improve our standard of living.

And yet there is not even a hint of what he means, or what he or his party proposes might be done.   You wouldn’t know, for example, that the productivity gaps are larger than they were, that foreign trade as a share of GDP is smaller than it was.  And with no serious policy, it looks as feels just as empty as when current government ministers, then in Opposition, suggested things could be better –  but offered no serious clue as to how that might happen.  They are as vacuous as each other.

Oh, and then there was the truly weird attempt to appropriate the legacy of Michael Joseph Savage

We would not use this term in today’s more secular and diverse age, but, in the 1930s, Michael Joseph Savage spoke of “applied Christianity”. As I’ve said, something like that will guide my Government.

Savage faced the last economic crisis of the magnitude of what is ahead of us, and was forced to borrow. He launched a major public works programme. At the end of it, New Zealand had the first of many state houses for low income workers, and significant infrastructure to power an improving economy – including large-scale hydroelectric schemes on South Island rivers and lakes.

It sort of makes some sense when Labour does it.  Whether or not there is much truth to what they (Ardern, Robertson) say, at least he was the first Labour Prime Minister –  some Labour figures still like to display his photo in their offices and homes.  It is pretty weird when National does it, and even worse when their “facts” are so misleadingly bad.

Thus, the Great Depression –  New Zealand style, where it was bad –  was largely over the time Labour took office in December 1935 (as it was in Australia and in the UK –  the latter overwhelmingly our major market).  Real GDP had recovered to pre-Depression levels and the unemployment rate was falling.   Through the Depression, governments had not been “forced” to borrow, they had largely been unable to borrow –  as National’s finance spokesman knows well –  and had actually defaulted on some of their debt.    And although Muller swears by his macroeconomic orthodoxy –  and thus professes himself entirely unbothered about a Reserve Bank doing almost nothing to counter this recession –  the first significant legislative act of the incoming Savage government was to nationalise the Reserve Bank and give the government progressively more power to use Reserve Bank credit.     The Savage government did borrow domestically, it did build state houses (all while doing little to actually prepare for the coming war) but……it also ran New Zealand into crisis in late 1938 and early 1939.  Unable to borrow internationally, and yet with a fixed exchange rate, the foreign reserves held by the Reserve Bank and the trading banks fell away very sharply (variety of influences), and government’s response was to slap on exchange controls and import licensing, regimes that didn’t finally disappear until the 1980s.

And then there was that interesting claim about hydroelectric capacity.  I hadn’t heard of that before, so I went looking.  There was a good reason I hadn’t heard of it before: it just didn’t happen. Muller seems to have simply made it up.

I went to the old yearbooks and found nice detailed tables of (what they called) public works spending (which does not include state houses).  Combine that with some historical GDP estimates, and you get something like this chart.

public works

Public works spending was held up in the early stages of the Depression –  including, the record shows, the Waitaki hydro scheme, partly to keep people in work –  but were cut deeply as the situation worsened and the foreign borrowing constraints became tighter.  The trough was the worst year of the Depression for New Zealand –  that to March 1933 –  and thereafter public works spending increased.  It is certainly true that the rate of increase picked up with Labour in office but even at the end of the period was no higher as a share of GDP (about 2 per cent) than it had been a decade ago under Forbes and Coates.

And what of hydro developments.  To my pleasant surprise, the data for those were broken out separately.  Here is public works spending on “Development of water power” as a share of  total public works spending.

public works2

So the hydro share of public spending works spending actually peaked in the year to March 1933, and it was pretty much downhill thereafter.   Of course, total spending on hydro also increased but in the last peacetime years (to March 1939 and 1940) it  no higher –  in real terms, or as a share of GDP –  than it had been in 1928 ( and less than it was 1932) –  this for a technology where underlying demand  was increasing very rapidly, and for which the state had taken effective control of the development of new power generation.

I don’t know where Muller got his story from.  But surely they have people who can do the basics like fact-checking an important speech by a new leader?  Then again, perhaps it really didn’t matter, because all they wanted to do was to swear allegiance to the Labour legacy, real or imagined, past or present.

Muller suggests that he would be a one-of-a-kind Prime Minister

In my lifetime, New Zealand Prime Ministers have tended to be kind, competent or bold. Some have managed to be two of those things. My background in business and politics, and my grounding here in Te Puna, mean I plan to be all three – kind, competent and bold.

There was no sign of any boldness in the substance of the speech, and not much evidence that he has basic competence nailed either.

Oh, and he’s promoted  his Chinese Communist Party member, former part of the PLA military intelligence system, who acknowledges lying about his past to get into New Zealand, further up the caucus rankings.  If that qualifies as kind, competent, or bold he must have a different dictionary to mine.   Shameful is a better word for it.

29 thoughts on “Me too

  1. Muller is playing the long game. Polling shows Nationals soft vote has drifted away due to not having trust in National to make life worse for the poor. No true citizen wants poverty to the extent we have. To neutralise the lose of votes he needs to emphatically deal with it publicly. That being said I do not see a lot on the productivity side.

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    • I can imagine the logic. I struggle to imagine it making much difference if the only real narrative is “largely unknown, inexperienced in govt, me is going to be more competent than nice kind Jacinda”. That seemed to be Liam Hehir’s point: if people were sick of Ardern perhaps it might work – the 2008 comparison, but then Key’s rhetoric was still more ambitious – but so far all polls suggest they aren’t.

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      • Sir John Key did get us out of a deep RBNZ engineered recession by boosting tourism and international students to a $16 billion juggernaut. He navigated the twin earthquake of Christchurch and Kaikoura disasters and got us tagged as a Rockstar economy in the face of a GFC.

        Jacinda Ardern keeps wrecking the NZ economy with corruption ridden $500k children slides, $100 million bribes to Labour agenda working groups, $4 billion slush fund to buy NZFirst vote to become the power hungry Prime Minister. $15 billion wage subsidy vote buying to boost her personal popularity and another $50 billion throwaway money with no idea what is a shovel ready project to boost GDP.

        Liked by 1 person

    • Muller thinks he is playing the long game. It just shows how easily he falls for his own PR. National is playing the long game, Muller is a pawn to be sacrificed after the coming loss.

      Do they even want to seriously compete this time, win and have to deal with the coming problems. Wait three years and have the opportunity to tear Labour apart for causing it all.

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      • Jacinda Ardern continues to bring a wrecking ball to our economy with her lax border controls which brought most of our 1500 Covid 19 cases in the first place and now the complete negligence with not testing before releasing from quarantine just shows her complete and utter incompetence.

        Liked by 1 person

  2. Yes, on close examination an uninspiring and at times embarrassing speech. It is very worrying that at a time of profound economic crisis and potentially serious social upheaval New Zealand is devoid of leadership. There is no light at the end of this tunnel.

    Liked by 2 people

  3. Just read it. I nearly gave up as I thought the family history and the all-you-need-is-love would never end.

    This passage confused me:

    ” As I said, National’s economic management over the last decade – in the face of enormous challenges – was outstanding, and will be the model for how my Government manages the economy over the next three years and beyond.

    Credit where due: Helen Clark and Michael Cullen also ran strong surpluses for most of their time in office.”

    He implies that his government will run/put us back in surplus again… with no tax increases and no cuts to welfare while also moving faster and more boldly to “address the social deficit, or help the underclass…”

    What do you think Michael, is back to surplus based on a status quo tax/welfare system even remotely possible within the next 3 years given the level of unemployment/economic shock he also suggests we are in for? If not within 3 – then when/how, I wonder?

    Liked by 2 people

    • I’m probably less pessimistic on the fiscal outlook than sum. If nominal GDP could be got back to close to pre-crisis levels in 3 years then fiscal balance might be feasible (most of the spending
      commitments are present are temporary). Getting GDP back on course probably requires more mon policy support than is being provided at present, esp if the rest of the advanced world is making much the same bad mon pol choice.

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  4. It appears that National is is dredging an equally shallow pond as its Labour counterparts. When Muller folded as quickly as his MAGA cap the writing was on the wall. What Catholic Christian of substance says “his faith would make no difference to any government he led”?

    Ok, so if it’s not his Catholic faith then what ideas, beliefs or philosophy informs the beliefs and practices of this man? Is he ok with lies and deception; spineless appeasement in the face of our enemies? If he lacks the courage to say that his ‘faith’ informs his politics, then on what ground does he stand?

    My advice would be to “get some convictions or go home”.

    Liked by 2 people

  5. Treason is the ONLY word for it… there WILL be another civil war in No Zealand, and many traitors will receive comeuppance from a feral underclass…

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    • It is highly unlikely. Social Welfare, ACC, Treaty of Waitangi payments, Accomodation Supplements, Working for Families payments are the price of peace.

      Liked by 1 person

  6. Good and fair post!
    Productivity Issues 2020
    Forestry income down
    Wool down ( the iconic Merino Mets included)
    Meat down
    Oh and a huge drought with feed shortages over much of NZ..
    Tourism
    Pandemics
    Etc etc.

    Where were any answers?

    Mind you the others have not come up with much either

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      • Yes, surprisingly rent is increasing. Just rented out a Mt Roskill Property for a $10 increase in rent. The property vacated due to tenants unable to meet rent due to redundancy. Trademe registered 1500 views, 80 watchers, 20 email requests for information and 5 applications to rent. Got a pick to renters. My other 10 properties are also fully tenanted at pre covid rents. No rent discounts, no rent deferrals and no vacancies.

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  7. My point is a bit brutal… but in the context I think it makes sense…. why is Muiller trying to out ‘Jesus’ Cindy? It surely is a quick route to an exit… he cannot hope to wins over the hearts and minds of the populace by being a ‘johnny come latel’y to the Cindy love-in…

    If this is a long game strategy then how long have you got?

    Unless things really turn bad for Cindy then National are going to be beaten to a pulp… I’ve voting Act – at least Seymour has the stones to stand up to Cindy and her acolytes…

    Liked by 5 people

      • Try the Greens. 60% of the top 10 are female, 40% are openly gay, plus a number of other factors that show them up to be not representative of the wider electorate. Maybe over compensating, but then they ditched Mojo, their token disabled person, so maybe they don’t actually care?

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    • We can only wonder Fred.
      Perhaps the idea is to the bring in the blue wet vote, the conservative/libertarian/free market vote can go to ACT; with four or five in parliament they could serve as a brake on the National left element. Is that the plan.
      God; at least that’s something to hope for I suppose. I really fear for this country.

      Liked by 1 person

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