Tuesday, 24 April 2018

Letting In The Light.

Lighting Up The International Stage: New Zealand's young, pregnant prime minister has won the hearts of the French, German and Commonwealth leadership. Her easy familiarity and great personal warmth has proved to be as captivating as it was refreshing. Even the Deputy Leader of the Opposition, Paula Bennett, was moved to describe Jacinda Ardern as "beautiful".

IT’S IMPOSSIBLE for fair-minded Kiwis to be anything other than immensely proud of their prime minister. Watching Jacinda Ardern interact with the likes of Emmanuel Macron, Angela Merkel and Justin Trudeau, one is repeatedly struck by her easy familiarity and personal warmth. That she has captivated these leaders is obvious to all but her most hardened opponents.

According the latest One News/Colmar-Brunton opinion poll, the Labour-NZF-Green government continues to be the clear choice of a comfortable majority of the New Zealand electorate. The same survey puts Jacinda an embarrassing 27 points ahead of the Leader of the Opposition, Simon Bridges, in the preferred prime minister stakes. There is a strong sense of purpose about this government which is keeping the electorate on-side. Its supporters should be feeling confident and relaxed about the future.

So why aren’t they?

At the core of their uneasiness is a sense that Jacinda’s government is seen by an alarmingly large number of New Zealanders as something akin to the sort of puppet regime an occupying army might impose on a conquered population. They look at Jacinda and her ministers through narrowed eyes – suspicious of everything they do.

Even when the measures this government announces are for the benefit of themselves and their families – like the winter energy subsidies soon to take the sting out of cost of keeping their houses warm – there’s a sullen refusal to be impressed. As if the payment was nothing more than a bribe.

This deep-seated cynicism towards Jacinda’s government has its origin in New Zealand’s very own Dolchstoßlegenden. (Stab-in-the-back myth) Just as the German Right refused to believe that Germany’s armies had been beaten decisively in World War I: preferring instead to believe that they had been betrayed by treacherous left-wing politicians and shadowy Jewish influencers in the rear; the New Zealand Right is firmly convinced that the National Party was kept out of power by the self-interested (and probably unconstitutional) machinations of Winston Peters.

That a government which does not include the party receiving the largest number of votes can nevertheless be accepted as legitimate by the “liberal elites” is, for the Right, a mystery reeking of treason.

The position of Jacinda’s government is not made any easier by elements within the news media who act as if the Right’s suspicion and resentment is, in some unexplained way, justified. In spite of the fact that the Labour-NZF-Green government has been in office barely six months, and ignoring the almost daily revelations of the previous government’s extraordinary derelictions and mismanagement, they lash Jacinda’s ministers as if they alone are responsible for the fact that the country’s infrastructure is, quite literally, rotting away.

These alarming displays of the media’s mendacity have lately acquired a much more sinister tone. It’s as if every editorial office in the country has received a memo from somewhere deep inside the Five Eyes’ national security apparatus that “Russophobia” is the order of the day; and that, for failing to follow its orders with sufficient enthusiasm the Ardern Government must be brought to heel by unrelenting media pressure.

We are thus treated to the spectacle of Newstalk-ZB’s Mike Hosking taking Jacinda to task for putting her faith in diplomacy and the UN Charter – as if the doctrine of “Might Makes Right” has not, over the course of the last 104 years, turned the world into a charnel house and made possible the worst crimes in human history.

It was the American journalist, Upton Sinclair, who remarked that “it is very difficult to make a man understand something when his salary depends upon him not understanding it”. The near unanimity now prevailing in the New Zealand news media that the West must “stand up to Russia”, coupled with its refusal to subject the claims of the United States, the United Kingdom and France to even a modicum of critical interrogation, speaks to a level of hysteria which, in the past, has been the prelude to war.

This is the bellicose atmosphere in which Jacinda, with all her openness and warmth, has been determined to represent her country’s long-standing allegiance to the UN Charter and her own transparent preference for a peaceful resolution to the Syrian crisis. Her courage and honesty are contagious: as may plainly be observed in her colleague Megan Woods’ steely determination to bring the EQC into line; and in Andrew Little’s fulfilment of Labour’s promise to open the Pike River drift.

It is the illumination which this government’s actions continue to generate which explains the rising level of hostility to its policies. For nearly ten years this country was kept in the dark. In that darkness, tragedy and failure could be kept hidden: and what too many eyes refused to see, too many hearts declined to grieve over. But now a majority of New Zealanders’ eyes are open, and they can see the decay, destruction and delay that are John Key’s and Bill English’s true legacy. For the 44.5 percent of the nation who voted for National, the shame of its legacy is hard to bear. Much easier, is to translate that shame into hatred for the people who forced them to feel it.

In a country where darkness and deceit allowed the lucky to grow fat undetected, while others less fortunate suffered unseen, a government determined to bring light and uncover truth will always, by some, be regarded as the puppet regime of an occupying army.

The question facing New Zealanders now is: “Do you intend to fight that army – or join it?”

This essay was originally posted on The Daily Blog of Friday, 20 April 2018.

Friday, 20 April 2018

Britain's Interests Nowhere Near The Moral High Ground.

And Never The Twain Shall Meet: Britain’s spoils from the First World War were many, but its greatest prize was indisputably the vast territories formerly controlled by the Ottoman Empire (whose territory we invaded on 25 April 1915). Between them, Britain and her principal wartime ally, France, carved up the Middle East as if it was an oil-soaked Christmas pudding.

IN JUST A FEW DAYS tens-of-thousands of New Zealanders will gather to commemorate the 102nd anniversary of the ANZAC landings. All the usual bromides about heroism, sacrifice, freedom and democracy will be trotted-out. Young people, who are featuring more and more in contemporary Anzac Day ceremonies, will construct their public remarks on the foundational assumption that, in 1915, New Zealand stood on the moral high ground. (By which they mean alongside Great Britain). It does not do to question this assumption. April 25 is this country’s Day of the Dead – and the Dead must be respected.

Let us, therefore, leave the Dead and examine the empire for which they died. Because the lines of British force and British interests that intersected at Gallipoli on 25 April 1915 were not broken there. They survived all that fruitless killing, growing stronger and more extensive as the war wore on. So much so that, by 1919, when most of the peace treaties were signed and sealed, the British Empire controlled considerably more of the earth’s land surface than it had when the conflict began. (As did New Zealand, which found itself in possession of the former German colony of Samoa.)

Britain’s spoils of war were many, but its greatest prize was indisputably the vast territories formerly controlled by the Ottoman Empire (whose territory we invaded on 25 April 1915). Between them, Britain and her principal wartime ally, France, carved up the Middle East as if it was an oil-soaked Christmas pudding.

Nations that are still, more than a century later, providing the world with its blackest headlines: Palestine (now Israel) Iraq, Syria, Saudi Arabia; were all cradled in the intersecting lines of British force and British interests. Young protesters may have waved placards decrying the exchange of young blood for oil during the first Gulf War of 1991 but, rest assured, the idea – if not the slogan – is much, much older than that!

Not that all the people of the region were content to live their lives enmeshed in the lines of British force and British interests. Many of them rose in rebellion against the British Empire – just as T.E. Lawrence, “Lawrence of Arabia”, had encouraged them to do against the Ottoman Empire during the Great War.

In 1920, anxious to conserve British blood and treasure while putting down these Arab revolts, the then British Secretary of State for War, Winston Churchill, recommended that the RAF deploy chemical weapons – mustard gas in particular. Gas, he insisted, was bound to inspire “a lively terror” in the rebel-held territories.

Not that Great Britain restricted itself to terrorising the Arab peoples. In “Arabia” they were only too happy to secure a kingdom for the House of Saud. In a bewildering series of alliances forged and friendships betrayed, the British armed Abdulaziz al Saud and his fanatical Wahhabist militia and allowed them to take control of most of the Arabian Peninsula, including the holy Muslim cities of Mecca and Medina. When the Wahhabists attempted to spread their fundamentalist version of Islam beyond Abdulaziz’s new realm, he had their leaders mown down with British-supplied machine-guns.

It was the beginning of a long and fruitful relationship between Great Britain and the Muslim world. In India the lines of British force and British interests were deliberately drawn between the Muslim and Hindu communities. While the British Raj endured, the purpose of these “divide and rule” tactics remained purely political. Only in 1947, as British rule was coming to an end, did they become geographical. It was the Foreign and Colonial Office that partitioned India and created the Muslim state of Pakistan.

Saudi Arabia, Pakistan, Wahhabism: for the past 70 years these have been the nurseries for all manner of Islamic religious fanaticism and jihadi terrorism. Saudi Arabia gave us Osama Bin Laden, and Pakistan, when it wasn’t busy organising and supplying the Taliban, gave him shelter. And through it all, though increasingly difficult to discern clearly, the lines of British force and British interests have continued to run. Which countries are counted among the biggest importers of British military equipment? Saudi Arabia and Pakistan.

The invasion we celebrate every year on 25 April continues to cast a very long shadow. Wherever Britain and the Anzacs were standing on that day, it was nowhere even remotely near the moral high ground.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 20 April 2018.

Thursday, 19 April 2018

"Clarkism" Still Driving The Labour Party.

The Sincerest Form Of Flattery: That “Clarkism” continues to be the driver of Labour policy is now impossible to either ignore or hide. Why else would Jacinda Ardern's finance minister (and Michael Cullen protégé) Grant Robertson have deliberately hamstrung the incoming progressive government with his absurd, unnecessary and politically indefensible “Budget Responsibility Rules”?

WHEN THEIR FRIENDS aren’t listening, the people at the top of this government are referred to bitterly as the “Clarkites”. Specifically, we’re talking about the former staffers of Helen Clark: Jacinda Ardern, Grant Robertson and Chris Hipkins. More generally, however, the term is used to describe that fraction of the Labour caucus unwilling or unable to fault the economic and social management of Clark and her Finance Minister, Michael Cullen. That significant figures from the Clark Era: Mike Munro, Heather Simpson, Cullen himself; continue to play major, albeit behind-the-scenes, roles in the Ardern-led government, only reinforces the potency of the “Clarkite” epithet.

Those Labour Party members unencumbered by stardust-speckled spectacles are beginning to comprehend that chronic government underspending goes back a lot further than Bill English and Steven Joyce. Finance Minister Cullen was a master at finding ways of diverting public revenues away from Labour’s traditional spending priorities: health, education, housing and welfare.

Not only did Clark’s finance minister set up the so-called “Cullen Fund” in response to the non-problem of “unaffordable” superannuation; but he also made sure that KiwiSaver (and the state’s contribution to its participants’ accounts) was managed by private-sector investors. Cullen also refused to return the Accident Compensation Corporation to its original status as a pay-as-you-go scheme – thereby diverting billions of dollars into the seemingly never-ending process of fully-funding it.

Funds that could have been used to upgrade the state housing stock; rebuild the capacity and efficiency of the nation’s railways; create a world-beating public transport system in Auckland and expand dramatically the country’s decrepit mental health services were, instead, piled-up in Scrooge McCullen’s money-bins.

There was method to the Finance Minister’s penny-pinching, however.

The more a government does for its citizens, the more they ask it to do. If their demands are met, then the resulting increase in state spending can all-too-easily boil-over into a full-blown fiscal crisis – necessitating savage reductions in government expenditure and unpopular tax increases.

Of course, these latter measures are only deemed necessary by politicians who regard government deficits as sinful, and who refuse to take full advantage of the state’s monetary fecundity. For these benighted souls, among whom Clark’s finance minister must be counted, the rule remains: “jam tomorrow and jam yesterday – but never jam today.”

For Clark, the trick was to keep public expectations subdued by “under-promising and over-delivering”. For her strategy to succeed, however, it was necessary for Cullen to present the government’s books as being healthy – but not too healthy.

A modest government surplus could be passed-off as evidence of prudent economic management. Too big a discrepancy between what the government collected and what it spent, however, and the voters would expect the surplus funds to be invested in improved public services and/or returned to them in the form of tax cuts. Cullen’s knack for making his surpluses disappear wasn’t just fiscally impressive – it was politically essential.

In 2009, with the Global Financial Crisis in full swing, the incoming National Government suspended “contributions” to the Cullen Fund. Why? So that billions of freed-up dollars could be spent on keeping the economy’s head above water. Labour was highly critical of this decision: perhaps because it demonstrated exactly how much the Clark-Cullen Government had prevented itself from spending for the best part of a decade.

That “Clarkism” continues to be the driver of Labour policy is now impossible to either ignore or hide. Why else would Robertson, Cullen’s protégé, have deliberately hamstrung the incoming progressive government with his absurd, unnecessary and politically indefensible “Budget Responsibility Rules”?

Earlier this week, the Prime Minister acknowledged that she and her colleagues were aware that the previous government’s underspending was massive – they just didn’t realise how massive. And yet, not even this pre-election awareness of the nation’s need was enough to make them dispense with the Budget Responsibility Rules. Nor were they persuaded of the necessity of abandoning their “No New Taxes Before 2020” pledge.

No sensible New Zealand economist believes Robertson’s self-denying ordinances to be either necessary or ethical. If opened, the bulging money-bins described above would remove the urgency (if not the argument) for raising taxes. So, why do the Clarkites refuse to be swayed?

The answer lies in their fear of losing control. If Labour credits the people with the answers, then how are they to be kept in its debt?

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 13 April 2018.

Wednesday, 18 April 2018

No Enemies To Labour's Left?

Why Is James Shaw Smiling? Labour's motto, when it comes to potential political challengers, has always been: "No enemies to our left!" Given the recent history of Labour's left-wing competitors, the Green Party co-leader's broad smile is probably misplaced - especially given where he's standing!

THE BIGGEST THREAT to NZ First’s and the Greens’ political survival is Labour deciding that it doesn’t need them.

Practically from the moment it moves into the Beehive, the Labour Party has a nasty habit of displaying an entirely unjustified confidence in its own political competence. This unfortunate mindset may be traced all the way back to the fourth Labour government of 1984-1990.

The so-called “Rogernomics Revolution” was very much a top-down affair for which the new Labour government possessed not the slightest electoral mandate. David Lange and his cabinet justified this turning away from democracy by convincing themselves that ordinary Kiwis were neither ready, willing nor able to make the tough economic choices being demanded of New Zealand. They masked this frankly elitist view of politics behind the slogan: “There is no alternative!”

Labour’s extraordinary arrogance persisted into the MMP era. Scant respect was given to the ideas and priorities of coalition partners by senior Labour ministers who tended, if they were feeling charitable, to dismiss their allies’ policies as unsophisticated and ill-conceived or, less charitably, as just plain nuts.

Little has changed.

Labour’s core assumption still appears to be that only its ministers possess the skills and credentials necessary to deliver effective government. What do they mean by effective government? Once again, the legacy of Rogernomics is evident. “Effective government” generally appears to mean implementing policies designed to earn Labour the respect of the other members of the power elite: business leaders, the news media, senior civil servants.

These policies are embraced by Labour because its leaders are either already convinced or, at the very least, prepared to be persuaded, that no other policy prescriptions possess the slightest chance of working. It’s a mindset best illustrated in the oft-quoted parliamentary response of the Labour cabinet minister, Steve Maharey, who described a broken policy commitment as: “Just one of those things you say in opposition, and then forget about when in government.”

Such a mindset would regard it as politically suicidal for NZ First and the Greens to resist the power elite’s effective government policies. It would argue that, in the face of such recalcitrance a snap-election would have to be called and the recalcitrant parties (Labour’s erstwhile coalition partners) would be bundled unceremoniously out of Parliament. With the support of NZ First’s and Greens’ more “realistic” voters and the assistance of a significant “Trash Vote”, either of the two major parties would be well-placed to win the election outright. Hence the Labour leadership’s confident assumption that their allies will always be persuaded to see sense – just as they were over the Trans-Pacific Partnership.

The recent history of populist parties in New Zealand demonstrates the enormous danger of entering into political relationships with parties more interested in the good opinion of the power elite than the people. As NZ First, the Alliance, United Future, Act and the Maori Party have discovered, the only reliable companions for populists are – other populists. Certainly, formal coalitions and confidence-and-supply agreements negotiated with “mainstream” political parties have proved extremely costly to their junior partner/s electorally.

The explanation for the sometimes-fatal outcomes of these political deals is simple. Large political parties – be they of the centre-right or the centre-left – have absolutely no interest in allowing electoral competitors to grow at their expense. In the ruthless political calculations of political centrists not even ideological soulmates, such as Act, the Alliance (and now the Greens) should be spared.

Consider the actions of the National Party under Don Brash. Having seen upwards of 13 percent of the right-wing vote drift across to Act and United Future, he was determined to reassemble National’s errant supporters under the party’s tattered banner. In this, at least, Brash was astonishingly successful. National’s share of the Party Vote rose from a record low of 21 percent in 2002, to 39 percent in 2005.

Labour’s long-standing motto: “No enemies to our left!” references identical strategic thinking. In the 2002 general election, Labour’s “enemy” was the socialist rump of the Alliance. Had Helen Clark wished to preserve a radical “pathfinder” party to her left, she could have tipped the wink to Labour supporters in Waitakere to cast their electorate vote for the Alliance’s Laila Harre – just as she had to Labour’s Coromandel voters in order to get the Greens’ Jeanette Fitzsimons into Parliament in 1999. In 2002, however, no wink was tipped and the Alliance died.

It might be objected that the present Labour-led government, by fulsomely fulfilling its promises to its partners – especially the Greens – is demonstrating an entirely new approach to coalition politics. Upon closer inspection, however, it is clear that all Labour has done is convey an impression of environmental activism. As the former Green Party co-leader, Russel Norman – now the NZ Director of Greenpeace – was quick to point out, Labour’s decision to issue no new oil and gas prospecting permits offers no impediment to utilising fully those already granted.

The greening of the Labour Party may be more apparent than real. Which is why, as he listened to Jacinda Ardern talking-up Labour’s environmental credentials last week, James Shaw's broad smile may have been misplaced. Did he not realise that, looking out from the stage, he was standing to her left?

This essay was originally posted on The Daily Blog of Tuesday, 17 April 2018.

Tuesday, 17 April 2018

Jacinda Has A Bob Both Ways On Syria.

Hard Choices: When confronted with an unsanctioned military strike against a fellow member of the United Nations, a New Zealand prime minister has two viable choices. Either, she can line up behind New Zealand’s traditional allies and deliver a hearty endorsement of their actions. Or, she can take a stand on principle and distance her country from the justifications, decisions and actions of the aggressors.

THE LATEST STRIKE against Syria [14/4/18] marks a further deterioration in the conduct of international affairs. Of more concern, however, is the quality of the response it elicited from Jacinda Ardern. The New Zealand Prime Minister’s remarks were not the sort to inspire either confidence or respect.

In matters of this kind, a prime minister has two viable choices. Either, she can line up behind New Zealand’s traditional allies and deliver a hearty endorsement of their actions. Or, she can take a stand on principle and distance her country from the justifications, decisions and actions of the nation’s involved.

What a leader should not do is attempt to have a bob each way. Why? Because, as the Ancient Greek storyteller, Aesop, pointed out some 2,500 years ago: “He who tries to please everybody, ends up pleasing nobody.”

New Zealand prizes highly its contribution to the formation of the United Nations. The Labour Prime Minister, Peter Fraser, worked hard to advance the rights of small nations at the San Francisco conference which gave birth to the UN in 1945. Fraser, and just about every Labour PM since 1945, has chafed against the veto-powers of the five permanent members of the UN Security Council – rightly predicting that they would severely constrain the UN’s mandate to keep the global peace. Identifying the UN as the most appropriate forum for resolving the Syrian crisis and decrying the use of the Veto was, therefore, an entirely predictable and consistent position for New Zealand’s present Labour Prime Minister to adopt.

Had Ardern denounced the vetoing, by the United States, of a Russian Federation proposal for an international inquiry into the alleged chemical warfare attack on Eastern Ghouta, as well as the Russians’ tit-for-tat vetoing of a similar proposal put forward by the US, she would have elicited widespread support from UN member states.

That support would have grown if she had further declared her disappointment that military action had been initiated by the US, France and the United Kingdom (all permanent members of the Security Council) before inspectors from the Organisation for the Prohibition of Chemical Weapons (OPCW) had been given a chance to examine the scene of the alleged attack, gather samples, and make their report.

She could also have announced that, if the Eastern Ghouta incident was confirmed by the OPCW as a chemical attack, then New Zealand would be seeking a vote explicitly condemning its perpetrators at the UN General Assembly, as well as a re-confirmation of the UN ban against the deployment and use of chemical and biological weapons.

Such a course of action would have identified New Zealand as an outspoken defender of the UN Charter and encouraged other small states to take a stand against the precipitate and unsanctioned military actions of the United States and the two former imperial powers most responsible for the century of instability which has beset the nations of the Middle East –  France and Britain.

At a more pragmatic level, such a response would undoubtedly have strengthened New Zealand’s relationship with that other permanent member of the Security Council, the People’s Republic of China. The Chinese have consistently and vehemently opposed unsanctioned and unprovoked military attacks against the sovereign territory of fellow UN member states.

Such would have been the high road for New Zealand: coherent, consistent and principled.

Alas, it was not the road Ardern chose to take.

Instead, having lamented the Security Council’s veto-induced paralysis, the statement issued by New Zealand’s prime minister went on to say:

“New Zealand therefore accepts why the US, UK and France have today responded to the grave violation of international law, and the abhorrent use of chemical weapons against civilians.”

Using fewer than 30 words, Ardern telegraphed to the world that New Zealand’s fine words about diplomacy and multilateralism should be dismissed as mere rhetoric. In reality, her country is perfectly willing to set aside its commitment to the peaceful resolution of conflicts between nation states, and the rule of international law, if the United States, the United Kingdom and France ask them to.

The alleged chemical attack in Eastern Ghouta pales into insignificance when set alongside the 1962 Cuban Missile Crisis, and yet, in the latter case, the Americans were eager to present the UN Security Council with photographic evidence of their claims. There has been no equivalent evidential presentation in 2018. Nor should it be forgotten that the Cuban Missile Crisis was resolved peacefully. This time, in spite of the risks, fighter-bombers and cruise missiles have been sent into action.

Rather than take an unequivocal stand for peace, the UN Charter and the rule of international law, New Zealand’s prime minister has chosen to talk out of both sides of her mouth. An opportunity to assume moral leadership and demonstrate political courage has been heedlessly squandered.

This essay was originally published in The Press of Tuesday, 17 April 2018.

Tuesday, 10 April 2018

Waiting For The Market's Music To Stop.

Prophetess Of Economic Doom: Political Economist Ann Pettifor cannot say exactly what will trigger the next global crisis. A sharp uptick in interest rates – especially in the United States – could do it. Or, the outbreak of a full-scale trade war between China and the USA. More likely, however, the crash will be precipitated by pure fear. Terrified of their loans not being repaid, lenders will raise the cost of money beyond the borrowers’ capacity of to pay. That will be the signal.

IN THE MOVIE Margin Call, the enigmatic financier, John Tuld (played by Jeremy Irons) repeatedly compares the business of playing the markets to a game of musical chairs. When one of his employees, Peter Sullivan (played by Zachary Quinto) comes to him with alarming news about the financial viability of Tuld’s investment firm, the following exchange takes place:

JOHN TULD: So, what you’re telling me, is that the music is about to stop, and we’re going to be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism.

PETER SULLIVAN: Sir, I not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop, as you put it, then this model wouldn’t even be close to that scenario. It would be considerably worse.

JOHN TULD: Let me tell you something, Mr. Sullivan. Do you care to know why I’m in this chair with you all? I mean, why I earn the big bucks.


JOHN TULD: I’m here for one reason and one reason alone. I’m here to guess what the music might do a week, a month, a year from now. That’s it. Nothing more. And standing here tonight, I’m afraid that I don’t hear - a - thing. Just ... silence.

That was the fictional exchange going through my head this morning (9/4/18) as I listened to Ann Pettifor give AUT’s Policy Observatory her all-too-factual analysis of the global economic situation. Seldom have I emerged from an academic gathering with such a feeling of dread. The British political economist’s words shook me to the core. Like John Tuld in Margin Call, Ann Pettifor is also convinced that the music is about to stop.

The supposed worldwide economic “recovery” from the Global Financial Crisis of 2007-2009 has been fuelled, almost exclusively, by debt. Debt on an unimaginably large scale. Debt so big that it would require the value of all the goods and services created in the world for the next four years to pay it back.

Theoretically, all of this debt is secured by the assets against whose value it has been issued. But, as Pettifor (Fellow of the New Economics Foundation, Honorary Research Fellow at London’s City University, and economic advisor to Jeremy Corbyn) reminded her listeners, so was the debt issued by the banks in the run-up to the GFC.

On 9 August 2007, however, the global banking fraternity – no longer convinced they could accurately value the financial instruments being offered as collateral for their loans – simply stopped lending to one another. This was “Detonation Day”: the moment when the GFC became both inevitable and unstoppable.

Everything now points to another such detonation being imminent. Pumped-up by the steady expansion of global liquidity the world’s stockmarkets have climbed to giddy and unprecedented heights. Over the last few weeks, however, the value of the stocks and shares traded on the world’s exchanges has fluctuated wildly. Such volatility, warns Pettifor, almost always precedes a catastrophic market crash.

Exactly what will trigger the next global crisis is impossible to predict. A sharp uptick in interest rates – especially in the United States – could do it. Or, the outbreak of a full-scale trade war between China and the USA. More likely, however, the crash will be precipitated by pure fear. Terrified of their loans not being repaid, lenders will raise the cost of money beyond the borrowers’ capacity of to pay. That will be the signal. The moment when one or more of the real John Tulds out there will strain his ears to catch even the faintest echo of the market’s music, but will not hear – a – thing.

Just … silence.

This essay was originally posted on The Daily Blog of Tuesday, 10 April 2018.

Will Marama Davidson Grow, Or Shrink, The Green Party Vote?

From The Left: For the first time in their history, the Greens have used a leadership election to shift their party to the left, not the right. Marama Davidson’s defeat of Julie Anne Genter by 110 votes to 34 would have delivered an important message to the electorate even if the Greens were still in opposition. Sent at a time when the Greens are in government, the signal to voters is potentially catastrophic.

“THIS IS WHAT you get when the Greens are in government.” In the mouth of the Greens’ male co-leader, James Shaw, it had the unmistakable ring of a campaign slogan. A good campaign slogan, which would have fitted Julie Anne Genter like a glove. Whether it can be worn by the Greens’ new female co-leader, Marama Davidson, remains to be seen.

For the first time in their history, the Greens have used a leadership election to shift their party to the left, not the right. Davidson’s defeat of Genter by 110 votes to 34 would have delivered an important message to the electorate even if the Greens were still in opposition. Sent at a time when the Greens are in government, the signal to voters is potentially catastrophic.

That the Green Party was returned to Parliament at all in 2017 was in no small measure due to those New Zealanders who would otherwise have voted Labour casting their Party Vote for the Greens – just to keep them in Parliament. In this rescue effort, the steady, back-to-basics leadership style of James Shaw was crucial.

Implicit in Shaw’s moderation was the clear acknowledgement that Metiria Turei’s radicalism had hurt the Greens much more than it had helped them. Without that acknowledgement and unaided by the Centre-Left’s strategic voting, the party would have struggled to clear MMP’s 5 percent threshold.

The decisive margin of Davidson’s victory over Genter indicates a rank-and-file membership that is either unable or unwilling to accept that turning their party sharply to the left is an extremely risky electoral gesture.

In 2017, the parties of the left fell well short of a parliamentary majority. They are only in government because NZ First’s conservative nationalists were unwilling to entrust the fulfilment of their populist agenda to Bill English’s National Party. The political significance of Peters’ decision to exclude the Greens from the Labour-NZF coalition appears to have eluded Davidson’s supporters entirely.

The coalition partners will now be watching anxiously as the full implications of Davidson’s decisive victory begin to manifest themselves in the Greens’ parliamentary caucus. Its two young firebrands, Golriz Ghahraman and Chloe Swarbrick will draw considerable satisfaction from the result. With Davidson’s election as co-leader offering incontrovertible evidence of the party’s radical aspirations, they will feel emboldened to (in the words of Davidson’s acceptance speech) “go even further, be even bolder”. Neither Peters nor Prime Minister Ardern will be looking forward to discovering exactly how far, or how bold.

That the Green Party’s 144 delegates chose to cast their votes the way they did reflects the “mood” of the Left both locally and internationally.

At the heart of that mood lies a deep-seated antagonism towards power-structures seemingly resistant to all but the most intense political pressure. Be it Harvey Weinstein in the US, or Russell-McVeagh in New Zealand, the effort required to sensitise powerful individuals and institutions to public outrage is enormous.

Right alongside this antagonism towards the elites, however, is a growing sense of alienation from the restraints of democracy itself. Young activists in particular find it less and less acceptable that numerical majorities have the power to over-ride and/or set-aside their demands. Why should old people, white people, straight people and male people be permitted to thwart progressive change? Why should a majority so egregiously in the wrong be able to defeat a minority so manifestly in the right? If that is all that democracy has to offer, then what, practically-speaking, is its political value?

Isolate these sentiments in their own self-reinforcing social-media bubble and the result is often a ferocious up-tick in self-righteous intolerance. Far from being perceived as virtuous, the democratic politician’s admonition that ‘we must take the people with us’ is derided as proof of political weakness and moral cowardice.

It would be interesting to discover how many of the Young Greens who threatened to quit the party if Davidson was not elected female co-leader would respond to Senator Barry Goldwater’s in/famous assertion that: “Extremism in defence of liberty is no vice. Moderation in pursuit of justice is no virtue.”, by clicking “Like”.

Few, if any, however, would object to the passage in Davidson’s acceptance speech enjoining her parliamentary colleagues to rise as one and “turn our faces to the streets”. Not, presumably, the streets of the leafy suburbs where the Greens get most of their votes, but the mean streets of Manukau East and Mangere – where they attract the least.

Those Green voters from the leafy suburbs would likely have responded positively to Julie Anne Genter when she pointed to her own and her party’s ministerial achievements and told them: “This is what you get when the Greens are in government”.

Whether Marama Davidson’s “green shoots of hope” grow into a bumper harvest of new voters in 2020 is considerably less certain.

This essay was originally published in The Press of Tuesday, 10 April 2018.