Kiwipolitico

I’m a gambling man so I will happily take odds on this one. All bets payable next Monday morning.

I see that Andrew Little has announced Labour’s new policy on fixing the housing crisis but will drop the actual details on the weekend (link here).

Somehow I don’t think the fact that he announced it days after National wheeled out its own policy for solving the housing crisis was a coincidence.

For Little this is a big opportunity, National have dropped the ball in regards to housing time and again and, as many have said, “mucked around the edges” rather than do anything concrete to fix a situation that shows no sign of fixing itself.

If Labours new policy has some genuine fixes to the situation and is not just another policy gimmick then expect this to be a game changer in the coming election because if you don’t think housing will be an issue in voters’ minds in 2017 then you might as well click off this page, shut the computer down and take a walk round your ultra-palatial, multimillion dollar, property because you are probably the only person in New Zealand that thinks so.

Housing has been a running theme for several years now but the magnitude of the problem is no longer able to be ignored or swept under the rug. If normally hands off National has been forced to wheel out some sort of “policy response” to address the growing concern then you know it’s a growing issue.

As Chris Trotter noted in today’s paper, National has nothing less than the removal of the state from the housing market in NZ as its stated goal and anything they do is not going to change that. Its new policy sounds less like a fix, as other commentators have already pointed out, and more like a desperate illusion of a government out of ideas and unwilling to upset its backers who profit from the current housing crisis.

And John Key knows this as his warning to party faithful at the recent party conference in Christchurch last weekend (just down the road from my house) was all about not being complacent and expecting to breeze into a fourth term.

Perhaps it was also an understanding that Brand Key has lost some of its gloss and simply relying on a series of public relations spin and plastering his face on billboards won’t fix things (unless someone is going to build houses out of those billboards).

So National has played its cards on the housing crisis and Andrew Little and Labour (scrappy rebels that they are) have seen an opening and decided to take it by announcing their own solution to the housing crisis.

This is the “stealing the narrative oxygen” strategy I noted a few weeks back and the potential to make big political capital off this is not to be sneezed at.

But as always the proof is in the pudding and we will have to wait until the weekend to find out.

The media has already done some speculation on what’s coming up (by linking it to Labours Kiwibuild policy) and Little himself has hinted some more by noting that whatever else the policy will do it will get houses prices to “a figure that’s affordable”.

But what is “affordable”? Is it around $500,000 as Little seems to think? And if we take his anti-speculator comments as real then these questions become even more pertinent as where is the line between owning a house and speculation? Is it when you own more than one house? Is it when the average property is around $500,000 (as opposed to the $1,000,000 it is now for a house in Auckland)? Where does it lie?

What policy prescriptions will be given that will do anything to stop a bubble housing market from getting bigger, or worse reducing the damage from when the bubble bursts? The answer to this looming bubble of doom and gloom is likely to be, say it with me, STATE INTERVENTION, as leaving the market to continue on as it has been will clearly do nothing and there is no alternate other than state intervention to address a clear market imbalance (if readers have any other suggestions please feel free to add them in the comments).

Don’t think Labour won’t go down this road? Afraid that the Labour of the past three decades will rear its ugly head and roll over for the market? Well you may be right but in the climate of New Zealand’s housing crisis as well as the international mood of growing dissatisfaction with the Status quo means Little and Labour would be mad to not a) propose a vote winning solution to New Zealand number one issue; and b) tap into the growing dissent around the same old same olds of politics in Aotearoa.

The alternates are not pretty, especially now that Labour in the UK has effectively decided that outright public squabbling is the way to go and the recent results at the ballot box in Oz show that voters can’t make up their minds either.

And Andrew Little will have been watching his counterparts in the UK and OZ and doing the math in his head. He knows, as do many many others, that his position is only as secure as the support he has in cabinet, public perception of him and the ability of the Party to counter the current government in policy prescription.

So wheeling out more of the same is not likely to gain support of the public or the party and this is not a crisis that will just go away especially when the Reserve Bank, fronted by Graeme Wheeler is warning of a “sharp correction” in the housing market.

So in my mind the die has been cast, Little and Labour are going to announce a new housing policy which will be in effect ‘State Houses part II’. It makes sense and it would address the problem. It also is a clear distinction with National which is going to be key to winning the next election.

The opportunity here is prime and for a limited time only. The effect on the situation if Labour announced a sure and dedicated expansion in affordable public housing would be immense and tap into so many strands of concern that exists today (increasing homelessness, price speculation, the housing shortage etc).

If Labour don’t have anything which is a real solution AND catches the public’s imagination then expect a long and painful 16 months until the next election. We have the next five days to speculate. Go!

Still cant finish writing about Peter Dunne, thankfully we live in interesting times.

So the UK is leaving the EU. I can’t say I was surprised with the outcome but I have been with the post vote situation.

Either way it was a doom and gloom scenario for some people. If the vote was Leave then the UK sinks beneath the waves in an orgy of chaos and anarchy. If it was Stay then the UK is flooded with refugees and all semblance of English culture is washed away.

What has been interesting is that, much like the US and other democracies around the world, the established political order is being split along lines which have little to do with the prevailing political orthodoxy and more to do with the economic realities of their respective countries.

But it was the post vote grumbling that first got my attention as it appears that many of those who did not (and in some cases did) vote in the referendum have now decided that they don’t like the outcome and want another referendum so they can vote (a petition has been circulating) or demanding a weighting system for voters based on their age (so that the younger voters get more weight to any vote over the older). Both of these are the political equivalents of science fiction.

While democracy is a complex and often flawed beast it works the best at expressing the will of the people and usually only needs a majority to get a decision or change enacted and in the UK it appears that the older voters got out more than the young in an referendum with approximately 75% of the able population casting a vote. So while a close result (51% to 49%) there is not likely to be any going back because imagine the precedent such an action would set.

Don’t like the first outcome of an election or referendum? Have another and keep on until you get the outcome you desire (if such a thing is possible) while allowing the rest of the population to get the outcome they want. No, not going to happen! No government (much less a democratic one) in its right mind is going to let such a plant take root and flower as the fruits are surely chaos and civil war.

Meanwhile David Cameron has decided to step down after staking his reputation on the country remaining in the EU, which seems like a good outcome for those which don’t like Cameron and what he represents but few have seemed to consider who, or what, will fill his shoes and already the talk has turned to things like snap elections and “reaffirming the mandate”.

Possibly it will be Boris Johnson, ex-mayor of London and Tory MP who at least appears to have a sense of humor if his quotes are to be believed* but appears to be too controversial a figure to the more conservative members of the party to get the top job, but in these volatile times strange things can happen.

And in “possibly related” circumstances Jeremy Corbyn is facing down mass insurrection in his shadow cabinet over his failure to mobilize the populace to vote no to leaving with 35 MPs walking and Labours London youth wing spitting the dummy.

It’s been interesting to watch the degrees of reporting in the various totally not partisan English media about this but for me Corbyn has had the last word, at least for now, by tweeting that he was “elected as the Labour Party’s leader to redistribute wealth and power” as he retains the support of the actual party and the unions and that should be enough (for now).

Which makes sense if the argument that the voting in the brexit was along financial (and class) lines with those who were doing well and living in London arguing to stay while those who were not so well off and/or not living in London voting to leave (including a fair selection of recent immigrants to the UK if reports are to be believed).

It seems that Labour UK has finally reached the point where the contradictions inherent in the party have brought the situation to the point of crisis. It had been simmering away for some time since Corbyns rise to become party leader but perhaps the Champagne socialists in party needed an excuse to revolt and this looks to be it.

And between pondering what (or how many) knives Corbyn will soon be picking out of his back or what shambling horror will replace Cameron my thoughts briefly turned to Andrew Little and John Key here in safe, clean and neat New Zealand and how their situations would turn out if there was a vote for NZ to amalgamate with OZ or the South Island to split from the North (say goodbye to hydro power north island!).

But the most mind blowing of the things to come out of this post vote dust storm is the fact that Nigel Farage and UKIP have in effect backed away from reneged on  the very promises  they made while campaigning for the UK to leave (money spent on the EU would be transferred to the NHS), the day after they got the desired outcome!

Farage played rather loose on TV by claiming that it was not him but “the party” which had made this decision and I was left wondering if the two halves of his brain were actually connected as rarely has a politician so blatantly, rapidly and publicly reneged on a campaign promise (and survived!).

So it would be probably fair to say that the UK is in a little bit of turmoil at the moment

 

*- “My chances of being PM are about as good as the chances of finding Elvis on Mars, or my being reincarnated as an olive.”

“The dreadful truth is that when people come to see their MP they have run out of better ideas.”

 

This one bubbled up after a three week run of in depth work. I blame my subconscious.

One of the fun parts of being at university was attending lectures for subjects I was not actually enrolled in. One of these was economics. I was doing Political Economics in POLS but the un-enrolled course I was sitting in on was hard core, perfectly pure, Chicago School dogma being drummed into eager young acolytes all ready to get out there and be part of the machine.

It was interesting stuff and while I soon found it to 20% sound theory and 80% minute social mechanics and psychology BS packaged as truth but I continued to attend lectures for the rest of the year, sitting up the back, smugly standing out by my dress, hair length and general demeanour as not one of the true believers.

They knew I was an infiltrator because they didn’t see me at tutorials and I was not of the general mold of Economics students but since I could hold a conversation on general concepts, was up with market play and kept turning up no one ratted me out, to which I was thankful.

And one of the interesting things I learnt attending that course was the concept of externalities, which in general is when a business excludes a particular costs from a product or process from its cost calculations.

For example a factory using chemicals in its production process will not factor in the cost of the toxic waste it produces, that is dumped into the water, sky or environment, if it does not have to, thereby making the product cheaper and generating more profit for the business.

But the concept does not stop there and I remember being fascinated as the lecturer expounded further on whether the decision to exclude was deliberate or due to incomplete information and if it was deliberate how such deliberations played out in the cost/benefit calculations.

It was, as he calmly noted (like a Mongol warlord ordering a pile of heads to be built form the population of a conquered city), not something that any aspect of morality should have influence on and at the end of the day the decision was to be deliberately amoral, made on pure cost calculation alone (in the Mongol case a simple calculation that fear would weaken the enemy and make victory come easier). And when he presented within the frame work of the economic theory (which at the end of the day boils down to “how to make the most profit”) it made perfect sense.

Such theories are clear, clean and crystalline in their perfection and inside their own particular paradigm make perfect sense, all the part fit together and the machine functions smoothly (my favorite example of such a theory at the time was John Rawls Theory of Justice but I have mellowed in my age).

Of course unexpected or unwanted things do occur and no functional theory can simply exclude them if it wants to pass peer review but often the mechanism to enable this is to simply treat the rouge data as a black box effect (ie X goes in, we don’t know what goes on in there, and Y comes out) or to set it up as having minimal impact (an externality) and the results of such styles of thinking is to either run very quickly into dogma (as economics has done) when confronted with a more holistic situation than its mechanistic process can handle or fall before the new and more complete picture.

And the process goes something like this: Ignore, ridicule then accept but acceptance only occurs after the current adherents of a theory pass on or give up or when the truth is so absolute that it cannot be denied.

Of course logic itself can easily become as much of a dogma as any crack-pot theory or religion (I always laugh when I go to people’s houses and they have the oh so trendy “Thou shall not commit logical fallacies” wall chart in their toilet) and the purpose of this post is not to wade of into the realm of abstract philosophical concepts but to look at the idea (such as externalities) and examples of such in real life (something all good philosophies should be doing).

And it’s here where we start to swing this post back towards the title of this blog, Kiwi (ie New Zealand) politics. But before people turn off thinking I am on another one of my rogernomics rants I beg a moment to show that I am not and am in fact looking at something far more relevant and current, poverty in New Zealand.

There is a reason why social safety nets exist. There is a reason why NZ built state housing in the 30s. There is a reason why states have laws to regulate economic and other activities and those reasons are, while possibly not absolute, due to a clear and obvious acceptance of most if not all related costs (to the state as well as groups and individuals), or to put it in other terms, refusal to allow externalities.

Now before someone accuses me of Keynesian leanings, that’s John Maynard Keynes not John Moneymarket Key for those not in the know, it’s worth pointing out that I am not advocating any solution which is can be simply boiled down to “make the state pay for it” any more than our PM is advocating “let the market take care of it” (although that is what he is doing).

Oh no it’s not that simple, but then again holistic theories never are. Reality is, often a messy beast that will not only track dirt into the house but also trail dirty paw/foot prints all over the rug, hide a nasty little surprise behind (or under the couch) and generally make you wish you never owned/spawned a cat/dog/children.

But back to poverty in NZ; right now, without going too far into media histrionics, the questions are: Do we have poverty in NZ, is it widespread, is it growing and (most importantly) what can we do about it?

Currently we have media reports of families sleeping in cars and garages, the government (mostly though ultra-hypocrite Paula Bennett, a previous receiver of state support and funding for education and living but also our beloved PM doing his best to put his “thinking serious face” on when confronted by the media) suggesting they live in motels or just go online and fill in some forms, beggars on the streets of the major cities and state housing stock (and the attendant social capital that it creates) being sold off to let the market take care of things but are these things sufficient to say we have a poverty problem in NZ?

For me the answer/bellwether of the answer to this question was not the media (because they rarely drive events or discussion they just respond to them) or looking out my window (I live in a resolutely blue collar neighborhood) but to the tone of those who support the current government and that tone is starting to change.

A good spike in the data to me was when erstwhile columnist now turned committed blatherer, Jane Bowron, used one of her columns to criticize John Key and the current government and it was poverty in NZ which was the switch she used to cut some strips on our kava swilling PMs backside (I’m hoping Pablo will be wading into the PMs Fiji Visit).

Now Mz Bowron may be a dyed in the wool Green voter in private for all I know but her column is resolutely mainstream and a rather noxious mix of folksy reminiscences, cut rate platitudes and dull day to day observations which are nothing if not well in touch with the main herd and its group consensus but also safely espousing/reinforcing the herds view.

And when one of the herd starts up on topics of such nature and unloads a double barrel of criticism on the current government you know a line has been crossed.

And it’s not just her, the fact that the mainstream media has finally picked up on what is not exactly a new problem (those families sleeping in cars were out where they were a long time before the TV news crews came a calling) and there seem to be subtle changes in the ongoing narrative around the poor, the unemployed and the homeless is enough to trigger a consciousness shift*.

John Key, National, Labour and much of the electorate have treated these issues as externalities for a long long time while not realising the grim flipside to dismantling the welfare state and its only now as that beloved kiwi dream, that of the quarter acre pavalova paradise, is now slipping out of reach of more than just a few poor buggers at the bottom that its beginning to register.

It’s not that home ownership is the main issue, because it’s not, but it’s that home ownership is a core plank in any welfare reform program from all budding peasant revolutionaries’ promises of land for the people to the sub-prime crisis in the US. Its integral to any welfare program and sits low down on Maslow’s hierarchy of needs.

So when you have families living in cars, government departments housing homeless in motels (at a cost they have to pay back) increasing people on the streets AND general house and living costs racing out of reach of average pay packets and entering the realm of market speculation AND middle ground opinion starting to show a growing intolerance with the situation you have a slow but gradual rejection of political, social and economic externalities of poverty in NZ (and the attendant economic and political theories) and the beginning of a more holistic, more realistic view of NZ (complete with acknowledging the value of the market but also the worth of the people that actually compose it).

But if it’s not to plainly spelt out enough at this time let me take it one step further.

Somewhere in the 19^th century when Europe created the model of the welfare state and began to address the problems of the growing underclass (and all its associated problems) that capitalism (then in its unadulterated rapacious stage) was creating the choices were clear: take steps to address the problems created by unleashing mercantile greed and labour saving technology on a feudal and mostly rural population or face the consequences and after the 1840s and several socialist near misses the consequences would be more likely to be a return to the savagery of the French revolution (then still a recent memory for many) than anything else.

More than now their eyes were open and ignoring the externalities was not an option. Funny how having a good proportion of the ruling class executed in front of a blood thirsty mob can bring about clarity (sometimes if only for a split second before the blade drops) in those that survive.

And today the focus of the battle is between the ideology of externalities (economics) and the grim meat hook realities waiting if we continue to ignore what we know is happening (a forceful and deliberate realignment of our social and economic priorities or at minimum a bloody attempt to do so buy those most affected by the purposeful and deliberate decline in our nation’s social and living standards by a cabal of ideologically lead criminals that we call politicians and their patrons).

Does that mean we will have revolution in NZ? Maybe, maybe not. The Kiwi psyche seems ill adjusted to sing the hymns of Viva Revolution or Liberty, Fraternity and Equality! But it does seem well suited for the kind of passive aggressive resistance common of general populations living in totalitarian regimes. None the less I would find it hard to see any real loss if such a thing did occur and a selection of MPs, lawyers and accountants were put up against the well in order to ensure that the rest toe the line.

It’s the reason democracies have elections (ritualized revolutions) rather than actual revolutions complete with real bloodshed and the ruling class being executed or imprisoned. Perhaps that’s why John Key is currently hobnobbing with the “duly elected” PM of Fiji; he is getting some advice on how to stave off an uprising.

And while some families living in cars seems like a far cry from and all-star cast singing and dancing their way through the French revolution it’s the fact that the traditional supporters of externalizing the costs of turning NZ into a free market bastion are starting to grumble that makes me wonder as one of the key tenents of counter revolutionary theory is that if you leave it until there are armed bands roaming the hills your chances of fixing it are almost nil.

It has to be caught before it gets to that point, when there are no obvious, flaming symbols of resistance and it often relies on more subtle readings of the situation than any crystalline theory can predict or is willing to acknowledge. And while it may not be the poor and miserable doing the leading, it will sure as be some motivated individual who is willing to say what the mob wants to hear that will be at the front.

In the US, the right has fallen prey to demagoguery while the left seeks to suppress through modulated pacification and assimilation of key themes while keeping the status quo in place.

In NZ the climate for 2017 is ripe for messages and possibly actions. At first it was dildos and mud but for how long?

 

*- The fact that Chris Trotter has been going on about this for ages is beside the point as he is an identified dyed in the wool socialist and the medias resident dispenser of left opinion.