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Thought for the day: Bank Economists as media expert commentators.

This may sound mean but having bank economists talk about global macro-and political economics on major NZ news outlets is like having pedophiles talking about childcare. Having them speak authoritatively on the “news” skews public perceptions of economic matters towards the preferred constructs of finance capital. Leaving aside the matter of finance capital’s interest in deregulation of capital flows and currency manipulation, using bank economists may be fine when discussing banking take-overs or interest rates in local markets. But there are many other economic interests at play that deserve mention when it comes to issues of political and macro economy and bank economists are ill-suited for a robust discussion of them. To the contrary, their “expert”opinions masquerading as informed commentary in the news media are often poisonous to the integrity of public debate on economic matters.

Is there not a single non-banker economist in NZ who could be used instead? Are all the Economics, Business and Management departments in local universities full of useless PBRF worshippers devoid of real world experience? Are there no economists in research centers, institutes or government agencies who could present a dispassionate and non-vested perspective on the state of global economic play? I find it hard to believe that is the case.

Just saying…

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“What a great day for humanity” would probably have done the trick

Today the President of the United States of America came out (if that’s the right term) in support of gay marriage. Hours later, The leader of the New Zealand Labour party did likewise. The responses they got could hardly have been more different. Obama’s statement was greeted with a worldwide ripple of excitement; Shearer’s with a localised wave of criticism. Aside from the obvious difference in scale, we can make some sense of the difference in valence by looking at two main factors: the content of their respective messages in political context; and the media and moment in which they were made.

Substance and political context

Allowing for the differences in political context, Obama’s and Shearer’s statements were reasonably similar. Both expressed support for gay marriage in principle, with reservations about implementation. In Obama’s case, the reservations were constitutional. The President can’t unilaterally pass an act permitting gay marriage; it has to go through two federal houses and most aspects of marriage are still, ultimately, determined by the states. Obama’s statement was symbolic and aspirational. First of all, it was a means of defining who he is, politically — a rebuttal of suggestions that he is timid or not liberal enough, and a means of illustrating a sharp distinction between his administration and the caricatured culture-war conservatism of his Republican opponents. It was also an opportunity to reinvigorate the American political left. David Frum said it well:

The statement changes everything because it galvanizes flagging liberal enthusiasm for this president—while subtly corroding even further the Republican hold on the next generation of voters.

(You should read Frum’s whole piece, it’s short and articulates clearly why this was a strategic coup.)

Shearer’s statement was, if anything, less equivocal than Obama’s; he merely said that he “would like to see the detail of any legislation before giving formal support”. In purely rational terms, that’s totally reasonable; nobody signs a blank political cheque. Much of the criticism has centred on the assumption that any such law would be introduced by Labour, so Shearer would not only get to see it but would get to vet it before declaring support. This isn’t really so; Labour are in opposition, and barring extreme exigencies they will be for at least 2.5 years to come. Given the Greens’ long-standing commitment to gay marriage and remarkable success in the member’s ballot, there’s a better-than-even chance that a hypothetical same-sex marriage bill drawn at random would be theirs.* There are plenty of potential pitfalls in such a bill, if badly drafted, and it is reasonable to hold reservations.

Other criticism of Shearer has centred on the argument that Obama’s political context is much more hostile to gay marriage, and his declaring in favour of it constitutes a genuine act of political bravery, while it’s a rather less contentious issue here. Also not entirely fair; of course, that difference in political context exists, but Obama is in power, and (largely due to Republican infighting) in political ascendancy, while Shearer is in opposition and in the doldrums. It is also very unlikely that any gay marriage bill would pass the current NZ Parliament, especially now that social-conservatives like NZ First are back in.

So on the merits, criticism of Shearer for appending this seemingly-innocuous qualifier seems a bit unfair. But there are two better explanations for hostility: first, he misread his medium; and more importantly, he misread the moment.

The medium and the moment

Obama made his statement in a medium and situation that afforded him considerable control over how his message would be transmitted and received, and that enabled him to articulate his position both from a personal perspective and politically. Good Morning America was a sympathetic venue; morning TV is warm and nonconfrontational, on the ABC network even more so than usual. It is not strictly time-controlled and interviewers generally do not play hardball. Its audience is more liberal, more female, and more inclined to respond favourably to expressions of personal warmth and reflection such as this one.

Shearer chose Twitter to make his announcement — the most constrained medium possible, one that permits no contextualisation, no emotional or personal connection. Given his performance to date as leader of the opposition, and the NZ Twitter left’s activist bias, it’s probably also one of the more hostile media open to him. It’s not talkback, but in some ways it’s worse: a lot of people who really want to like you, but are already frustrated and disappointed and are beginning to despair can be a harsher audience than your outright enemies. Twitter also means that you are expected to be spare and to the point, and to only include detail that is significant. By hedging, he signalled that his position was not firm or genuine. The medium is the message, so the inclusion of an obvious redundancy like “need to see the detail” when characters are so limited doesn’t look like understandable prudence, it looks like fuzzy-headed waffly-thinking at best, or political cowardice at worst. David Shearer mistook a platform for slick, aspirational one-liners as the venue for earnest political positioning.

And that leads to the most crucial point of all: Shearer misread the political moment. Obama’s declaration in personal, philosophical terms of his “evolution” from someone who did not support gay marriage to someone who does was a watershed moment, a genuinely epochal event: when the President of the United States of America supports your cause, all of a sudden it looks a lot more like happening. A loud shot was fired in the culture wars; it instantly became global news, and with the news came a wave of liberal euphoria. This was, as Russell Brown noted, the best possible moment to note Labour’s progressive history and rededicate to the goal of marriage equality, but it was not a time for wonkish quibbling about details, or careful delineation of party policy. The moment was one of joy, of celebration, of possibility — of hope and change — and any response had to be congruent with that. Shearer’s wasn’t. The contrast jarred, and made the other, lesser, deficiencies in the message and its presentation more evident.

Substance, context, medium and moment. You can’t really afford to be without any of these, but if you’re trying to catch a wave of public sentiment, you really have to get your moment right.

This is symptomatic of Labour’s ongoing failure to articulate its vision: a lack of mastery of the tools and techniques at their disposal. Shearer’s lack of authenticity and his inability to speak clearly and unequivocally from his own position, that I touched on in my last post on this topic, was depressingly evident in this episode, and it may be that he’s still being tightly managed. A more concerning possibility is that this is the real David Shearer: lacking in virtù, like his predecessor.

But despite everything, I think this was a good experience for Labour — hopefully it has demonstrated to them that sometimes being timid is worse than being silent. If “go hard or go home” is the only lesson they take from today, it will have been worth it.

L

* Hypothetical, because none are in the ballot at present, though I expect that to change soon. Idiot/Savant drafted one some years ago, and it would not be an hour’s work to get it in.

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The GC: is this what we’ve come to admire?

After some consideration of my sanity, I watched the first episode of The GC. It was more or less as I expected. I’ll probably never watch another minute of it, but it’s not a show for me. Nor is it a show for all those other high- and middlebrow honkeys (including Mike Hosking, TV reviewers, and 10,000 Facebookers) who are wringing hands and clutching pearls about how it’s empty trash that glorifies superficial extravagance and shallow excess at the expense of what is “real” or “authentic”, how it’s exploitative and demeaning to Māori, or whatever.

There’s some merit in these critiques, and in the complaints about NZ On Air funding, which it seems to have been allocated to a slightly different show than what ended up actually getting made. But ultimately I don’t think it matters. The GC tells us important things, not only about the beaches, bods and booze society it portrays, but the society from which its participants originated. The most legitimate object of critique is not the show, or its cast, but the system that makes such a bizarre phenomenon not only viable, but compelling.

Always bound to be something. Don’t matter if it’s good or not. Mama always said, “finish your kai. Don’t be fussy!”

Tame (pronounced “Tommy”) was talking about aunties, but the statement expresses the main reason many young Māori leave school and go to The GC and places like it in the first place: because they’re places where there always is bound to be something that’s better than nothing; you take your opportunities as they come up, and eventually you’ll be ka pai. Aotearoa, for many young Māori, is not such a place: the release of employment data showing that Māori unemployment is twice the national average will be no news to anyone who’s been paying attention, and the trans-Tasman wage disparity for those who are employed remains broad. If a kid like Tame can roll like a wideboy property investor on a scaffolder’s coin in The GC, and the counterfactual is minimum wage, gangs and prison back home in Timberlea, why not? As Annabelle Lee-Harris, a producer for Māori Television’s Native Affairs, said on Twitter:

Stay in NZ with the other 83 k unemployed youth or go to the GC where everyone has $ and lives in bikinis? Seems like a no brainer #TheGC … You can’t deny Maori have a far better quality of life on #TheGC. It may seem shallow but actually their kids aint gonna get glue ear etc.

Returning to the question: is this what we, as a society, have come to admire? The answer is yes; this is the neoliberal reality in which we all live. The truth is we always did admire it; it’s only the nouveau-riche cosmetics we cringe at. When our hereditary nobles and “real” celebrities live their extravagant, idiotic lives in public we celebrate them. When a bunch of brown kids do it, all of a sudden they’re an embarrassment; they’re abandoning their heritage, dishonouring their ancestors, should get real jobs and get back in their place.

But it’s all very well for snooty middle-class (and, I suspect, largely middle-aged) white folks to peer down their noses and mutter about how much of a shame it is. It’s easy to do when you’ve got options, mobility and capital (both financial and social). It’s easy to do when you’re not forced to choose between keeping your ahi kā burning, staying with your people and trying to preserve (or find) your place in society on the one hand, and earning a decent wage and staying out of prison on the other. It’s all very well to mythologise and romanticise Māori as a noble people, beyond wealth, if you don’t have to live their reality. And the Māori reality is not static. NZ On Air funding was sought and granted to examine aspects of the contemporary Māori reality. If you look beyond the caricature, the phenomenon examined by The GC is an aspect of the contemporary Māori reality. This goes some way to mitigating the criticism. Former TVNZ CEO Rick Ellis was completely serious (if wrong) when he cited Police Ten-7 as a legitimate portrayal of Māori on TV; there are few outside the niche market occupied by Maori Television, and like the shows on that underrated network The GC at least has the benefit of being made by, for and starring Māori. You don’t have to be very cynical to conclude that there’s a racial motive, however unconscious, behind calls for The GC to be cancelled and its funding redirected to saving TVNZ7, which Paul Casserly recently called “Pākehā TV“.

Maybe the “I’ve got mine” flight to material wealth is simply neoliberalism dragging people away from their values and further into its clutches, but at some point it stops mattering. Māori have had enough generations of being told to be patient, to make do, to play nice and they’ll get what’s good for them. Those who do the telling are are far from impartial. How long are Māori supposed to wait for the Pākehā justice system to make things right, to repair the alienation and dysfunction and reverse the discrimination that still affects them? And even when the system does finally deliver, it’s no sure thing: emerging Māori business leaders are mocked as fools when their ventures fail and abused as fat-cat tribal oligarchs when they succeed. As far as Pākehā society is concerned, Māori can do very little right, so the only surprise about the Mozzie phenomenon is that there are still so many young Māori who haven’t given up waiting for the NZ system to work, and set about making the Australian one work for them. We expect them to act in their own self-interest, and we construct economic and political mechanisms to that end. This is our system, not theirs: if you don’t like their rational responses, don’t blame them: blame yourself, and your part in making it so.

L

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Showing The Money versus Making Numbers Work.

That simple phrase “make the numbers work” catches John Key’s approach to the perennial tension between efficiency and transparency in a democracy. To simplify things, it can be said that the more democratic and transparent the policy process, the less efficient it becomes. That is because the more actors are involved in policy decisions, the more likely that additional decisional sites and veto points will be placed in front of policy choices. They key is to find an appropriate balance between efficient policy formulation and implementation and open participatory representation by all potential stakeholders. If forced to choose, democrats err on the side of representation. Authoritarians prefer efficiency.

The corporate world has no objective need for balance. What matters are balance sheets in the black. Firms are structured so that decision-making is hierarchical rathe than horizontal, with decisions flowing from the top rather than as a result of inputs from the bottom or from external parties. Managers rule, workers obey, and shareholders or owners reap profits. Given the sensitivity of any given project, public consultations might be invited and consideration might be given to mitigating factors that impinge on profitability, but the bottom line is that the numbers work in favor of owners, investors and share-holders.

John Key came from (and is likely to go back to) such a world. In fact, with a personal net worth of around $60 million he is a small time member of the “Masters of the Universe:” the network of financial elites (stock brokers, money managers, currency traders, hedge fund administrators and bankers) built up in the 1990s and headquartered in London, New York, Geneva, Hong Kong and Singapore who made the calls on how global liquid assets should be invested. Theirs is a world of numbers, not morality or ethics, and their worth to the network was and is their ability to make the numbers work when constructing investment deals. They answer to themselves and their clients without regard to the public interest because, quite frankly, they are interested in private gain rather than the public good.

With that in mind the self-styled CEO of NZ Inc., John Key, advised himself that changing gambling laws so that SkyCity can have another 500 slot machines in return for building a convention centre on adjacent land at no tax payer expense was a neat deal that was in both the private and public interest (the public presumably being interested in the tax revenues and ancillary benefits that will accrue from having the convention centre up and running, which is a whole different story). By that logic the numbers work.

In order to come to this conclusion, however, NZ’s self-styled CEO had to ignore the counsel of the Auckland City Council, local iwi, problem gambling-related mental health organizations, the Police, traffic authorities, tourism operators and a host of other potential stakeholders (I mention these because the proposed site of the convention centre involves a myriad of urban planning considerations and is only handy to the Casino and not to the Viaduct, Cloud, Winyard Quarter, Ponsoby, Newmarket or other entertainment districts that depend on tourists). When I say “ignore” I mean that he chose not to solicit advice from any of these parties rather than turn his back on advice already given. Mr. Key’s self-advice also told him to order an end to all other tenders once SkyCity got involved, some of which might have contained the input from non-investor interested parties such as those mentioned above. But as a minor Master of the Universe why should he bother with pretenders and outsiders when he could seal the deal with SkyCity for a small change in an industry-specific law? The Hobbit saga taught him that allowing non-investors to have a say could well kill the deal, so this time around he made sure that negotiations were kept quiet.

Clearly Mr. Key is a man who understands numbers and efficiency. But perhaps he spent a bit too much time in Singapore, where public input into policy decision-making is inconsequential to the point that it is not even considered even when it comes to large public works projects (such as the expansion of the MRT train lines currently underway, which have displaced thousands without any input from them and with compensation determined not by market value but by government fiat). In Mr. Key’s world he does not have to waste time and money listening to the blather of a host of obstructionists and self-interested losers (because, after all, he only deals with winners). He is there to crunch the numbers and do the deals. In the pokies-for-convention-centre trade he has done so, efficiently.

No wonder it is rumored that he is tiring of the job. Here he is, cutting deals and helping commercial players make serious money just like in his good old days in the private sector. But now he has to put up with ex-post whingers and other plebians who all want a voice without a full command of the power of numbers. Plus, he is surrounded by career politicians who for the most part could not make a buck even if they won lotto, and the opposition is nothing more than a bunch of special interest namby-pambies who would not get past the lobby of his former corporate headquarters. Why should he stick around and have to listen to their nonsense about addiction, traffic and other social costs?

You have to feel for Mr. Key. Once he was in the stratosphere, unaccountable to anyone but his corporate masters and the private interests that they served. He made money off of money without having to add value or increase production anywhere, and he got rich doing so in part because he made his name in an authoritarian country in which numbers, not people, matter most. Now he has to smile and wave to a bunch of provincial hicks self-absorbed in some weird Antipodean PC navel-gazing where everyone has a say and little gets done.

Then of course there is John Banks, and how he reads the numbers. For Mr. Banks the deal is not about making public and private numbers work. It is about private interests showing him the money in order to advance his political fortunes. Whereas Mr. Key was looking for a way to balance a specific private actor’s desire with a vague public interest (again, assuming that a convention centre adjacent to SkyCity is in the public interest), Mr. Banks was looking for campaign contributions. Presumably there was a quid pro quo involved with at least two known private parties, SkyCity and Kim Dotcom (there are plenty of others who donated “anonymously” to Mr. Banks but let’s focus just on these since they are in the news). What the expectations were for deliverables from Mr. Banks is as of yet unknown, although whatever they were it appears that Mr. Dotcom now feels that he was stiffed on the deal and is exacting his revenge by releasing details of his donations to Mr. Banks’ mayoral 2010 campaign. Whatever it was it was not in the public interest unless one thinks that granting Mr. Dotcom special favors is a collective good.

In the end, what Mr. Key did was not very democratic but it was legal and efficient as far as the tightly defined numbers behind the deal are concerned. Mr. Banks, on the other hand, had no public interest in mind when he solicited funds from Mr. Dotcom and accepted those from SkyCity, even if the latter’s donation was the same as the amount donated to Len Brown at the time (to his credit Mr. Brown reported the donation from SkyCity to his campaign, which mirrored that given to Mr. Banks “anonymously”). SkyCity was just papering both sides of the mayoral aisle with its symmetrical donations to the two leading candidates, and whatever favor was purchased was bound to be equally small given the amounts involved no matter who won the election. But Mr. Dotcom was an individual who papered only one candidate as far as we know, and he did so in excess of the corporate entity known as SkyCity. He was, in other words, trying to purchase individual favor by backing one candidate over another.

That is why there is a difference between the two men. Mr. Key is an authoritarian-minded money man who thinks he knows what is best for the country without regard to the naysayers and whiners, and who makes the numbers work in favor of his preferred vision. Mr. Banks is an egotistical “show me the money” weasel. With the possibility of more revelations about Mr. Banks forthcoming, it could well be the case that the weasel brings down the money man, or at least accelerates his departure from office.

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Putting the mandate to work

I struggle to believe the National party that read and led the public mood so well for most of the previous six years has so spectacularly lost its way. Recent months, and the past few weeks in particular, have been the government’s hardest, and only part of that is due to ministerial incompetence and bad optics. Part of it is because they have chosen policies that contradict the very narratives Key and his government have so carefully crafted.

This can’t be accidental. I think the fact that they barely won a majority despite the worst performance in a generation by the Labour party has convinced Key that this term is probably his last, and he intends to make best possible use of it. This is good strategy for them. It’s a strategy I’ve been writing about since Key was in opposition, and one that the Labour party ignored, to their detriment, until late in the last term. John Key is no mere smile-and-waver, but a man of action who, when the time is right, will act ruthlessly and decisively. He has spent his five years as leader earning the trust of the electorate, gaining a mandate, and now he intends to put that mandate to work. This country will not be the same in three years.

There are many possible examples here: privatisation of state assets is the most obvious, but is well-covered by others more informed than I am. I’ll cover three more recent topics: two are bad politics, but I can see the point to them; the last is simply a terrible idea that, if not abandoned quickly, will have profound implications for the future of New Zealand’s political discourse.

Paid parental leave

The decision to call an immediate veto on Sue Moroney’s private member’s bill extending paid parental leave was badly handled. If it were to be done, it ought to have been done immediately the bill was drawn, in an offhand way so as to frame the veto as inevitable; as it was, sufficient space was left for the idea to take root in the collective imagination of the electorate, and now the use of the veto looks anti-democratic; signalling it before it has even been debated looks doubly so, and leaves about a year for sentiment to continue to grow.

Of course, the government has the procedural right to take this action, if perhaps not the moral right to prevent Parliament from passing something that a majority of its members supports. But it chips away at the Key government’s carefully-framed appeal to being pro-middle-class, pro-family, pro-women. Unlike welfare reform, this is not an issue that only impacts people who would never vote for the National party anyway. Paid parental leave predominantly benefits middle-class (rather than working-class) families, and especially middle-class women — those who, for five years, the government has been reassuring that we are on your side. Key is personally very popular among women, and this has been central to National’s success. It looks like the government are prepared to sacrifice this on the altar of fiscal responsibility. The comparison to Barack Obama’s strategy to win a second term on the basis of strong opposition to GOP misogyny could hardly be more stark.

This is in spite of the argument on the merits: a low-cost policy that yields considerable long-term benefits of the sort the government has been anxious to create (or invent, if need be). And the arguments being levied against the scheme are particularly weird: “Is it about labour force participation, or about women spending more time with children?” Well, yes. “It’s discriminatory against non-working mothers!” Well, yes, but I don’t see any of the people making that argument supporting a Universal Motherhood Entitlement, and in fact, I distinctly remember some rhetoric about “breeding for a business” whenever such ideas are raised.

A possible reason for this bad veto call is that it foreshadows a future softening of National’s position on the topic; as Key did with the Section 59 bill, when it looks close to passing the government will signal support, in the spirit of bipartisan cooperation.

Or, maybe it’s just that they don’t care any more — so they’re unpopular, so what?

Student entitlements

The latter argument also explains the decision, announced today, to limit the availability of student allowances and require higher repayments of student loans, although not completely. This is bound to be popular with those who have forgotten (or who never experienced) how hard it was to undertake tertiary study and build a career without Daddy’s cash and connections, and those of the generations who had it all laid on for them by the taxpayers of their day. But it will be less popular among the growing ranks of young voters, and it will be less popular among the parents of those young voters, who are having to provide financial support to their kids through their 20s and in some cases into their 30s, because said kids are finding the economic dream is more rosy than the reality.

This policy is also anti-middle-class, anti-family, and anti-women: because the middle class includes most of those who can afford to (and have the social and cultural capital to) undertake tertiary study; because it places an additional burden on their parents, and because women are already disadvantaged in terms of earning power, and therefore have less ability to avoid or pay back loans. It also erodes National’s aspirational, high-productivity, catch-up-with-Australia narrative, by raising the barrier to becoming qualified to do the high-productivity jobs that such a goal requires. More crucially, it erodes National’s “money in your pocket” narrative by imposing upon borrowers a higher effective marginal tax rate — over and above the existing 10% higher effective marginal tax rate — making it harder to survive on the wages that come with those jobs.

It could be worse. They’re not reintroducing student loan interest. But it is only the first budget of the term, and the same reasoning — this is good because it allows borrowers to pay off their loans sooner, and it will provide cost savings for the government — is true in spades when you charge interest. People can already pay their loans back more quickly if they choose — it is easy to do. People don’t, because wages are low and the cost of living is high, so the government wants to force them to do so. So much for choices.

Refugees

Although I disagree with them, there is some political justification behind both these previous positions. But nothing explains the government’s decision to take a harder stance against asylum seekers. In the Australian context (and in the USA and the UK, although I know less about these), immigration and the treatment of asylum seekers is a political bonfire. This is most obvious in terms of human life and potential. Able, resourceful and motivated people are imprisoned for months or years, barely treated as humans, and allowed to become disenchanted and alienated while hostile bureaucrats decide their fate, and cynical politicians on all sides use them as ideological tokens in a dire game — before being released into society to fulfill the grim expectations that have been laid upon them. But it is also a bonfire for political capital — the more you chuck on, the brighter it burns — and for reasoned discourse. Politicians, commentators, lobbyists and hacks of all descriptions dance around this fire like deranged cultists which, in a sense, they are.

The immigration debate in Australia, though it barely deserves that name, is toxic, internecine, and intractable; it has been propagandised to the point where it is practically useless as a policy-formation tool, or as a means of gauging or guiding public sentiment. It sets light to everything it touches; people take leave of their senses and run around shrieking whatever slogans fit their lizard-brain prejudices. The word “sense” is used so often it ceases to have any meaning: all is caricature, and in keeping with this, other ordinary words also lose their value: assurances that asylum seekers will be treated “fairly” or that systems will be “efficient” would not be recognised as such by an impartial observer. Somehow, it becomes possible to simultaneously believe that the policies are targeted against “people-smugglers”, while being fully aware that the punitive costs imposed by such regimes are suffered by the smugglers’ victims. Otherwise-reasonable people resort to idiotic bourgeois framing such as “jumping the queue” — as if it’s OK to escape from political or religious persecution, if only you do so in a polite and orderly fashion. Mind the gap!

What makes it all the more stupid is that a brown tide of refugees in rusty boats is not even an issue for us: we are simply too isolated, and surrounded by waters too hostile, to be a viable destination. Unfortunately this fact will not be sufficient to prevent people from getting worked up about it, and demanding that Something Be Done. Someone on twitter recently said that anyone who could get a boatload of people here from the third world deserved a beer and our congratulations, and I couldn’t agree more. We need people with the degree of daring, toughness and pioneer spirit to make such a journey, and qualities such as these were once most highly prized.

This policy also undercuts National’s mythology about itself, most assiduously cultivated over the past year in preparation for the sale of the Crafar farms and other assets — of New Zealand as a land of opportunity, welcoming to outsiders and open for business. National have been swift to condemn any deviation from this line as xenophobic, and yet this is somehow different. It is worse than a solution in search of a problem — it is a cure that is far more harmful than its ailment.

What’s more, while I can see the underlying political reasoning behind the two other policies I’ve discussed here, I can’t see the reasoning for this one. Most likely it is an attempt to cultivate some love in redneck-talkback land; to shore up slipping sentiment among the culturally-conservative base that National used to own. But even in this it is misguided: this is not a debate that does any major party any good. It is an opportunity for extremists to grandstand, to pander to society’s most regressive elements. It crowds out meaningful discussion of other matters, it makes reason and compromise impossible, and what’s worst: it never dies. We saw a glimpse of this with the Ahmed Zaoui case; by fearmongering about boatloads of Chinese en route from Darwin on the basis of just one isolated case National runs the risk of admitting this sort of idiocy to the national conversation permanently.

And that might be this government’s legacy. The former two topics, while they will change New Zealand’s politics in meaningful ways, are essentially part of the normal partisan ebb and flow. Asset sales is much bigger; other topics, like primary and secondary education reform and the proposal to cap government expenditure will also have longer-term and more profound impacts. The National government has a mandate, and they are using it while they can, in the knowledge that you can’t take it with you when you go. That is understandable, if perhaps regrettable.

But to use such a mandate to permanently poison New Zealand’s discourse, willingly driving it towards a permanent state of cultural war is a different sort of politics altogether — deeper, more ancient, harder to control, and much more dangerous. I hope I’m wrong.

L

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Fortune-cookie strategy and the Labour leadership

Since at least the mid-20th Century it has been fashionable in our culture to adopt postures derived from Asian martial manuals — most notably Sun Tzu’s The Art of War, and Miyamoto Musashi’s The Book of Five Rings — in diverse civilian contexts including business, and politics.* There is much to recommend in these texts, but too often they are poorly understood and are reduced to fortune-cookie wisdom, lazy magical thinking of the sort that’s only good enough to bamboozle those who are susceptible to such things. Sun Tzu in particular is a rich mine of sage-sounding aphorisms, and I have indulged in quoting him at times. But it is no get-wise-quick scheme; it’s like a cargo-cult.**

While I have no direct knowledge of the extent to which these ideas hold sway within the New Zealand Labour party, their present strategy bears considerable resemblance to this sort of magical thinking. I’ll cover two specific points brought to light by Claire Trevett’s recent article on the goings-on in the Office of the Leader of the Opposition.

Attitude of No Attitude

Attitude is the spirit of awaiting an attack. … I dislike the defensive spirit known as “attitude”. Therefore, in my Way, there is something called “Attitude-No Attitude”. (Musashi, The Wind Book)

This is the most obvious manifestation of magical thinking: that an official posture of David Shearer “staying above the fray” will necessarily confer a non-politician or statesmanlike aura upon him. Of course, such an attitude can have this effect, but whether or not it does in a given situation is not such a simple matter. Such a strategy could have worked for Shearer, given the right people and the right circumstances, but the right people and circumstances were not present. So the result has been a Labour-party-sized hole in the NZ opposition narrative for most of the past four months.

This hole is not entirely of Labour’s own creation — Shearer took the leadership just before the holidays, and the Ports of Auckland lockout took place within the blessed month between Christmas and Wellington Anniversary where most reasonable New Zealanders will hear nothing of politics. Engaging too strongly with the lockout issue risked alienating the very people Shearer was asking to give him a chance. But the period of inaction has lasted well beyond the silly season, and although some of the Labour caucus have been beavering away, people have not noticed. They have been waiting for the leader, and the leader has not been leading.

I can see the logic: “when we zig, people complain we should have zagged; when we zag, it turns out we should have zigged. Let’s hold steady, bide our time, and become at one with the Universe. At least that way we can guarantee there will be no blunders, and the wheels are bound to fall off this Tory bus sooner or later.” But attitude-no attitude is not merely a damage-mitigation strategy. It is effortlessness, not lassitude. It is creating opportunities to strike, not awaiting them. The opportunities have presented themselves — industrial relations, charter schools, Treasury figures, paid parental leave and the veto, others — and the only time Labour has gotten any traction is with regard to ACC (not of their making), and only then by getting sued by a Cabinet minister!

The past four months have been what another lot of military jargon would refer to as “target-rich”, and Labour largely refused to take advantage of it. Either a zig or a zag would have been preferable to an OM.

The Sovereign and the General

Sun Tzu said: In war, the general receives his commands from the sovereign, collects his army and concentrates his forces … There are roads which must not be followed, armies which must be not attacked, towns which must not be besieged, positions which must not be contested, commands of the sovereign which must not be obeyed. (Sun Tzu, Variation in Tactics)

The “above the fray” strategy noted in Trevett’s article suggests an attempt by Nash and Pagani to position David Shearer as a “Sovereign” — someone who issues orders that are interpreted and then executed by his “generals”, in cabinet and the staff (led by Nash and Pagani.***) Conversely, the strategy said to have been argued by Fran Mold seems to be to position Shearer more as a general, leading from the front.

Both can work, and both do work in the present NZ parliamentary context. But again, the problem with this framing is that it is simplistic — the leader of a Labour movement, as Shearer referred to the party upon attaining the leadership, cannot be above and aloof from the movement, he must be down in it; but he must not lose sight of the bigger picture. It is a near-impossible job and he must own it. He must determine the balance between the various roles that best suits his own strengths, and those of his cabinet and advisors. He cannot do all of it, but how it is distributed must be congruent.

This last — congruence — is crucial. Its absence is what makes a strategy cargo-cultish. To be strategically successful, whatever David Shearer does must be authentic to David Shearer and to the political narrative that he has cultivated; it must not be some get-popular-quick scheme thought up by clever bastards in expensive suits, it has to be his. That it has required such effort to maintain Shearer’s studied aloofness is a strong indication that it is not an authentic strategy, but a pose struck for dramatic effect, and therefore worthless. Bouncing from cloud to cloud, as good as the strategy of aping Key might have seemed on paper, has not rung true because David Shearer is not Teflon John.

One of the most important tasks of leadership — and Sun Tzu goes on and on about this as well, but I’ll spare you — is to surround oneself with good people, and people suited to their tasks. It is also crucial that a leader has the strength of will to maintain his own strategic direction, and this is doubly true of Shearer, who was elected leader on the claim that he was beholden to no-one. His performance at these tasks has been very poor. It may be that he was drawing from a shallow pool of talent, it may be that he was continuing the network of patronage, it may simply be that he thought John Pagani was the best guy for the job — but his team failed to match Shearer’s strategy of action to the narrative he has built around his leadership, and ultimately that’s his responsibility.

So what now? It’s beyond me. And so as not to provide further opportunities to take an inauthentic path, I’ll refrain from giving any sort of detailed advice, beyond “find your own damned way, choose good people, and avoid magical thinking”. I continue to note the irony that folks who, for years, have pooh-poohed the need for polish and presentation in politics now insist that Shearer’s inability to talk good is what’s holding him back, and even greater irony that staunch supporters of Phil Goff are now abandoning Shearer for having failed to accomplish in four months what Goff failed to accomplish in three years. I also can’t get too cut up about his alienating the old leftist revolutionary guard.

David Shearer now has an opportunity to refresh some of his underperforming staff, and that at least shows an awareness that Goff’s office did not show until much later in his term. It may yet be that he has to go; it may be that he really has no authentic vision, style or strategy, and even if he has them, if he can’t articulate them then it’s all moot. Things are not good, but there’s still plenty of time to roll him if that’s what’s needed. Patience, though not lassitude, remains a virtue.

L

* Machiavelli’s The Prince and Clausewitz’s On War are also popular, and justifiably so, though they lack that easy Orientalism of the former two.
** I have seen it persuasively argued that this sort of thing had a central part to play in both the boom and the bust of Wall Street in the 1980s.
*** While it is tempting to suggest that this was part of a Tuckeresque scheme to concentrate power with the senior staff, I think the truth is more depressingly mundane.

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Leaving Bamiyan.

It looks like the NZDF will pull out of Afghanistan next year, one year earlier than originally planned. According to the government the situation is so good in Bamiyan Province that responsibility for security has been turned over to local Afghan forces and the NZDF has downscaled its armed patrols as it concentrates on packing up. The Hazaris who populate Bamiyan are said to be happy with what the NZDF has done with the Provincial Reconstruction Team and will assist the UN and other international organizations in continuing the reconstruction work once the NZDF has left the theater. According to the NZDF and National government, the PRT experience in Bamiyan has been exemplary and is a model for such military-led reconstruction efforts in other future theaters.

But there appears to be wrinkle in this happy picture. Five Afghan translators who worked with the NZDF have unexpectedly approached Defense Minister Jonathan Coleman during a press junket to the PRT (which also saw MSM types like Garth Bray along for the photo op dressed nattily in body armor while posing in front of dusty military hardware and encampments). They did so to request political asylum. The translator’s approach was unexpected, which speaks to the NZDF not being aware of their intentions in advance of the Minister’s visit (which left him at loss for an answer since refugee issues are not part of his portfolio–not that such subtleties matter to Afghans). That suggests a failure in communication between the NZDF and the people it relies on to convey its message in Bamiyan, which is problematic because since one would assume that the relationship between the translators and their patrons would be close and trusting. That the translators kept their concerns a secret until the Minister arrived speaks to underlying differences between them and the NZDF command in Bamiyan.

The translators claim that they will be harmed or killed once the NZDF leaves Bamiyan. Eh? What happened to that much vaunted security situation? If the NZDF did such a good job and was well received by the locals, why would these men fear for their lives? More generally, did the NZ government give any thought to the post-withdrawal security concerns of its closest Afghan interlocutors? Did the NZDF command in Bamiyan flag any such concerns to the government? If the security situation for allied locals in Bamiyan is not as good as has been announced, did the NZDF or NZ government mislead the public as to the truth of the situation?

The translators want special consideration rather than wait for the UN refugee-granting process to take its years-long course (by which time, if their fears are true, they might well be dead). In other words, the translators want to jump the queue because of their extenuating circumstances. That puts the NZ government in a difficult position. If it denies their claim and tells them to get in line like everyone else, they might die as a direct and immediate result of their association with NZ troops. If they get favored treatment then it opens the government to accusations that it responds opportunistically and plays loose with the rules for granting political asylum.

The government has already caused itself a problem. Minister Coleman, caught off-guard by the request on what was supposed to be an easy Anzac Day-related “meet and greet” with the troops, said that NZ has a responsibility to the translators because of their service to the NZDF. That opens a can of worms, because if NZ grants the translators refugee status on special grounds, that sets a precedent for anyone else in Afghanistan who worked with the ISAF coalition to make similar claims based upon fears for their post-withdrawal security. Cooks, cleaners, drivers, translators, lovers–the list of people who could claim persecuted status based on their association with ISAF is bound to be long. NZ offering asylum to these men consequently becomes a thorny diplomatic issue not only with its ISAF coalition partners (who face the possibility of being inundated with similar requests), but also with the Afghan National Government that is supposed to be capable of guaranteeing security once ISAF is gone.

Whatever the decision on the translator’s request, the episode has raised more questions about conditions in Bamiyan than the NZDF appears willing to answer. One thing is certain. No matter what the outcome someone is bound to be left in the lurch, and that includes the NZ MSM types who failed to realize the full significance of what they witnessed when the translators were introduced to Mr. Coleman.

 

 

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Missile Envy (with postscript).

So let’s get this straight: North Korea attempts to launch a ballistic missile capable of carrying a nuclear warhead and the international community goes ballistic, claiming it is a serious provocation that has grave consequences for regional and world peace. The UN condemns the launch and humanitarian assistance is suspended in retaliation for it. The North Koreans, who have twice tried to detonate an underground nuclear device with only partial success, fail yet again with their missile test (the booster misfired three minutes into the test flight and fell harmlessly into the Yellow Sea where it undoubtably is the object of foreign salvage efforts). In doing so they confirm that they are a considerable ways off from posing a nuclear-armed ballistic missile threat to anyone. That does not mean that they are not paranoid, bellicose and dangerous, but if that is the criteria by which states are measured than pretty much anytime the US has a Republican president it should be subject to UN sanctions and international boycotts.

A week after the North Koreans embarrassed themselves with that fizzle launch (the best technical term for the mishap that I have read is “projectile dysfunction”), the Indians did it right. They successful tested a ballistic missile with a range of 5000 kilometers that is designed to carry a nuclear warhead. The range of the missile means that it can strike targets in Europe and Central China. It is, in a phrase, a full-fledged Intercontinental Ballistic Missile (ICBM). The Indians, of course, are already a nuclear capable state, having successfully conducted dozens of tests both above and below ground. Like the North Koreans, India shares a “hot” border with a long-term adversary, Pakistan, that is also nuclear-equipped (the North Koreans are confronted by nuclear-armed US troops as well as South Korean conventional forces). It has fought conventional wars with Pakistan and border skirmishes are fairly common. And yet the international community has remained placidly silent about what is a clear message of aggressive intent on the part of the Indians.

Why the hypocrisy? If the international community is really serious about nuclear non-proliferation its should be condemning ALL ballistic missile testing. If that seems unreasonable given that the boosters can also be used to launch satellites, then it is patently unreasonable to froth about the North Korean test and ignore the Indian one (and the latter was not construed as anything but a military application). The hard truth is that the Non-Proliferation Treaty is a porous joke that is enforced–and I use that word very loosely– selectively against a few pariah states such as Iran and North Korea but not against others. Nor does it do anything to disarm nuclear-capable states. What reductions in nuclear arsenals have occurred have happened as the result of bilateral negotiations rather than within the framework of the NPT.

I am not a fan of the Kim regime in North Korea. I cannot say I am too enthused about Iran acquiring a nuke. But I understand fully why they attempt to do so. Nuclear weapons are designed to be deterrents, and if that fails to be used as a response to aggression by military superior forces or in the face of imminent conventional defeat. Given their circumstances and the balance of forces in with they operate, North Korea and Iran are eminently rational in their pursuit of that deterrent, as is India even if its threat environment is not as dire (after all, ongoing low-level cross-border clashes with Pakistan cannot be considered to be in the same league as having hostile US carrier task forces and large ground-based contingents just off-shore and across the border) .

That makes the hypocrisy of the international community all the more salient. India is no more and no less rational a state actor than Iran or North Korea. It has interests that it seeks to advance via military capability as well as diplomatic and economic means. Iran and North Korea do not have the diplomatic and economic weight of the Indians–far from it–so they emphasize the military aspect of their defenses. That includes rhetorical broadsides that are designed for domestic consumption and to demonstrate resolve to potential adversaries.

I would think that if the international community was serious about stopping the Iranian and North Korean nuclear weapons development programs it would start by moving to enact restrictions on all ballistic missile testing that is not clearly designed for satellite launching purposes. It could also work a bit harder, within the NPT, to reduce extant nuclear arsenals in places like India, Pakistan, Israel and the great powers. Readers will undoubtably think “that is never going to happen,” and they would be right. But is that is the case, then it is unreasonable to expect that Iran and North Korea stop their ambitions with regard to producing an indigenous nuclear deterrent. They may not conform to international standards of behavior as defined (mostly) but the West, but they are eminently justified, on realist-deterrence grounds, to pursue that option.

Interestingly, that champion of nuclear non-proliferation, New Zealand, has been silent about the India ICBM test even though it condemned the North Korean launch. I get the feeling that under the current government NZ righteousness with regard to non-proliferation is inversely proportional to the possibilities of securing or maintaining a trade deal with states engaging in such testing. Thus, with regard to India there is silence. With regard to Iran there are meek pleas for “cooperation” with the IAEA. And with regard to North Korea there is a chorus of boos no doubt in part occasioned by the fact that South Korea enjoys a favored bilateral trade status with NZ whereas North Korea does not.

It is said that diplomacy is the art of disguising hypocrisy and self-interest in moral-ethical appeal. When it comes to the issue of nuclear proliferation, it seems that particular costume has worn threadbare thin even in places like NZ.

PS: And sure enough, true to form, Pakistan responded to the Indian test with one of their own. So there you have it: two nuclear armed states sharing a border that have fought conventional wars with each other and which continue to maintain a simmering territorial dispute that has involved the use of unconventional armed proxies sequentially test multi-stage long range boosters that are clearly designed to carry nuclear warheads. One of the countries is a major source of armed violent extremism and a safe haven to militants of various stripes. The international community remains silent.

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A Turn to Mean.

As I watched various labour conflicts over the past few months, then took in accounts of greed-mongering of various types (the wheel-clamping rort being the latest), I set to wondering if things have turned mean in NZ. I tend to think so, and believe a lot of it has to do with National’s presence in government as well as the increasing stratification of NZ society–something National’s policies tend to exacerbate. Some of this collusion is obvious, such as changes to labour laws that strip worker’s of collective rights while enhancing employer prerogatives when hiring and firing (under the banner of so-called “flexibility”). Some is less so, such as in the “look the other way” approach to the conditions that led to the Pike River and Rena disasters and the hands-off government reaction to them. But the trend towards meanness began well before National returned to government in 2008 even if it has gotten worse under it.

It strikes me that the syllogism involved goes something like this: increased employment precariousness born of economic recession in climates of market austerity premised on cost-cutting in both the public and private sectors leads to increased anxiety, then desperation amongst the salaried classes as their life opportunities narrow. In the measure that collective means of defense and redress are also pared down and stripped of legal cover, agency takes precedence over principal to the point that individual rank and file interests are sacrificed in favor of continued union bureaucratic presence (however diminished) in those economic sectors that remain at least partially organized. In the measure that workers realize that their agents have adopted the “iron law of oligarchy” where bureaucratic self-interest and survival becomes the primary objective to which rank and file interests must be subordinated, notions of collective solidarity are abandoned in favor of individual self-interest. Since this is the dominant ethos at play in unorganized sectors of the economy and amongst the managerial and financial elites, the move to survivalist alienation becomes endemic (and indeed pandemic, if we include the fact that immigrants are socialized into the culture of meanness, thereby propagating the “disease” beyond its original culture). The original agents of transmission, in any case, would appear to be the market ideologues who have metastasized into the managerial elites of the present day.

When survivalist alienation becomes endemic, cultural, ethnic, religious and other forms of ascriptive categorization are used to justify the “me first” approach to social intercourse. Until then people may just be bitter. But this is the point when things turn mean.

I could be wrong and this has always been the case in NZ. My impressions are formed since 1997, so perhaps what existed before was indeed a land of milk and honey. But it seems to me, beyond the inter-generational inevitability of the trend towards hyper-individualism there lay a number of accelerants that have made things worse in the last ten years.

 

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Which Way, Huawei? (With postscript).

All internet architecture has the potential for use as a Signals Intelligence Intercept platform (SIGINT). Data mining already occurs at the mid-range of  IT frameworks, such as when Facebook collects personal information on users for consumer research (or more nefarious) purposes. Cell phones have GPS trackers, which requires software. The range of data-mining already at play in the commercial field is extensive. It therefore should come has no surprise that States also have an interest in data-mining, but for military, diplomatic and intelligence purposes.

If mid-level IT platforms such as FB and numerous other private agents can data-mine extensively with or without the consent of those whose personal information is being accessed, then it stands to reason that providing the basic support infrastructure for IT operations gives the provider even more opportunities at such. In a liberal market environment there are standards of conduct and protocols developed to restrict the unfettered access to private information. But what happens when a state capitalist enterprise is the provider of basic IT infrastructure?

In market capitalist systems the state serves the interests of capitalists by framing the legal and governance frameworks so as to encourage competition on an ostensibly level regulatory playing field. In state capitalist systems capitalists serve the interests of the state above and beyond their particular commercial interests. This is seen in European fascism, Latin American national populism, and in Asian developmentalism such as that of Singapore.

Huawei is the product of a state capitalist system. It was founded by and is led by former PRC intelligence officers. Although Huawei claims to be 100 percent employed owned, that is true only because the one-party authoritarian regime than rules China continues to maintain that it is Communist, which means that all employees are owners. Huawei has been designated as one of the seven national economic treasures that are considered to be essential strategic assets for Chinese power projection, and as such are subject to the strategic dictates of the ruling party. All of this is well known, and having independent local Huawei operators fronted by non-Chinese managers cannot disguise that fact, particularly when all of the components and associated hardware are engineered and made in the PRC.

The US and Australia have decided to bar Huawei from providing IT technologies to strategically important sectors of their IT markets. The US specifically excludes Huawei from any defense or security related contracts, and for that reason Symantec decided to sell its interest in Huawei USA. The Australians feel that their National Broadband Network (NBN) is too precious an asset to be opened to Huawei. They say they have their reasons, and that those reasons have to do with national security.

NZ has just signed off on several broadband infrastructure contracts with Huawei. The question is whether those responsible for the decision were aware of the US and Australian position and if so, why they choose to ignore it. The UK and Canada have allowed Huawei civilian IT contracts, which is important because they are part of the Echelon SIGINT and TECHINT network that binds the “5 eyes” parties together (along with the US, Australia and NZ). In the UK Huawei was awarded contracts for civilian IT, but that was followed by the government communications security agency running an extensive and costly forensics accounting of Huawei systems in order to ensure its cyber security, and even then cannot guarantee that the system is safe as far as covert “backdoor” entryways are concerned. This had something to do with the Australian decision.

95 percent of attempted probes into US corporate and security IT systems originate in the PRC. In the PRC all internet access is tightly controlled and monitored. Huawei is a leading provider of the IT systems used in the PRC, to include the firewalls used to censor foreign content and the tracking devices used to monitor internal dissent. Although all of this is circumstantial, this is the non-classified reason why US security agencies have decided that the company serves as a SIGINT front for the PRC. Add to that concerns about Huawei activities in foreign SIGINT gathering, and what you have is a reason to ban it from competing for security related contracts.

Of course, this could all be a corporate driven plot to preserve market share in the face of superior Chinese efficiency. Or, it could be racism. Or it could be part of the Trilateral Commission efforts to extend its world hegemony. I am agnostic on the exact reasons, but whatever they are, I sure do hope that someone in the National government was briefed by the GCSB and/or SIS on what they were. After all, as full intelligence partners with the US and Australia, one would think that these agencies would have received some of the classified details of why the US and OZ have their doubts about Huawei, and that these agencies would have dutifully reported to at least the Minister for Security and Intelligence, John Key, on the nature of these concerns.

Mind you, if the concerns about cyber espionage are true, I do not fault the PRC a bit for doing so. As an emerging great power with global economic interest and no intelligence sharing network such as Echelon on which to rely (unless one thinks that intelligence sharing with North Korea and Burma is a good counterpart to Western intelligence networks), then the PRC must–and I do mean MUST–develop its own human, signal and technical intelligence capabilities in the measure that its global interests grow. That is just the way the game is played in international security affairs.

The major sea lanes of communication between Latin American and Australasian primary good and raw material suppliers and the Chinese mainland pass through the South Pacific. It would therefore be remiss of the PRC not to seek to ensure the security of these vital channels, and one part of doing so is to have a better intelligence “grip” on what goes on in the countries through and in which they are situated. To put it in Brooklyn-ese: they gotta do what they gotta do because no one else is gonna do it for them.

That is why it would be helpful to hear a “please explain” response from Mr. Key on the matter.

Postscript: It turns out that as early as 2008 the concerns of NZ intelligence partners about Huawei were discussed in US embassy cables from Canberra (which were sent to the US embassy in Wellington, among other places). In 2010 the SIS and GCSB informed him that they could not guarantee that the broadband infrastructure would not be compromised if Huawei was awarded the UFB contract. For reasons as of yet unexplained, he choose to ignore the warnings. As it also turns out, India and South Korea have banned Huawei from critical IT infrastructure projects. Thus it seems that concerns about Huawei are not just a Western plot born of anti-Chinese xenophobia and a desire to protect market share for western businesses, but part of a wider conspiracy amongst China-haters of all stripes. Mr Key, however, is not one of those, and his meetings with Huawei executives at the 2010 Shanghai Expo is proof of that. (Note to readers: all of this has been discussed in the NZ mainstream media the past week, and the 2008 embassy cables were published by Wikileaks).