The Dim-Post

February 28, 2012

You actin’ like we got an inelastic product when we don’t

Filed under: Politics — danylmc @ 10:31 am

John Armstrong has been briefed by the Labour leader’s office:

David Shearer is right to hold his nerve. No doubt he is feeling the pressure, but he is wisely ignoring the mounting criticism that he is failing to take the fight to National, that he is missing in action, that he is too laid back and that he is wasting his honeymoon as Labour’s new leader.

There is a danger that perception becomes reality and those labels stick.

But there are good reasons why Shearer should take little heed of this passing chorus of complaint.

The main one is that the moaning will soon be forgotten. In little over two weeks, Shearer will deliver a major positioning speech which will give a much clearer picture of the direction in which he intends taking Labour.

That speech is likely to be bold.

It may yet flag the most significant reorientation of Labour thinking since the party kissed goodbye to Sir Roger Douglas.

So far, Shearer has given little away. But there was a hint yesterday in his remarks about welfare reform that he is planning to shift Labour’s stance quite radically in a number of policy areas.

Russel Norman and Metiria Turei must be grinning like jackals.

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48 Comments »

  1. If he ditches this “Third Way” bollocks, Labour might get my vote back from the Greens.

    Comment by The Green Blazer — February 28, 2012 @ 11:00 am

  2. The main one is that the moaning will soon be forgotten.

    Forgotten by the tribalists? 13%.
    Remembered by left centrists who appreciate aggressive leadership / front-and-centre politicking from the Greens. Priceless.

    Comment by Gregor W — February 28, 2012 @ 11:31 am

  3. I bet he’ll talk about managing the exchange rate and developing exports based in knowledge and innovation. he could start out with something like this:

    There can be no doubt that over a number of decades New Zealand’s economic performance has not kept pace with that of other first world nations. The reasons are obvious. While others have been transforming their economies and societies through the application of knowledge and innovation, we haven’t kept up with them. Our export profile resembles that of developing countries, not that of a developed one. Our economy has not been generating the level of wealth required to keep us high in the first league.

    There is also a long-term underlying fragility to the economy, based as it is on so many factors beyond our control. High commodity prices and good weather can’t be relied on to make the primary sector profitable, and the exchange rate is not consistently export friendly.

    Stop-go economic performance has also had an impact on social provision and on society itself. It limits confidence in career prospects and family security. It means we under invest in our people and their needs. That limits our human capability to meet the challenges ahead. It is also clear that social inclusion was not enhanced by many of the change agendas of New Zealand’s recent past.

    Comment by NeilM — February 28, 2012 @ 11:37 am

  4. What’s the bet he’ll talk about managing the exchange rate and developing exports based on knowledge and innovation. His speech could start out something like this:

    There can be no doubt that over a number of decades New Zealand’s economic performance has not kept pace with that of other first world nations. The reasons are obvious. While others have been transforming their economies and societies through the application of knowledge and innovation, we haven’t kept up with them. Our export profile resembles that of developing countries, not that of a developed one. Our economy has not been generating the level of wealth required to keep us high in the first league.

    There is also a long-term underlying fragility to the economy, based as it is on so many factors beyond our control. High commodity prices and good weather can’t be relied on to make the primary sector profitable, and the exchange rate is not consistently export friendly.

    Stop-go economic performance has also had an impact on social provision and on society itself. It limits confidence in career prospects and family security. It means we under invest in our people and their needs. That limits our human capability to meet the challenges ahead. It is also clear that social inclusion was not enhanced by many of the change agendas of New Zealand’s recent past.

    Comment by NeilM — February 28, 2012 @ 11:41 am

  5. Just so you know, Danyl, I expect all future posts to also be titled with quotes from The Wire.
    Also: Phil Goff (David Cunliffe) really shifted Labour pretty substantially, in terms of Iraq, Super, capital gains, etc etc. I also think that Labour will struggle to look innovative if all they do is continue to operate the Greens’ policy ground. So, I genuinely struggle to see how Labour can position themselves to grab the ‘Brave, innovative party of the future’ meme they so clearly want, even ignoring the fact that most of their caucus is trapped in the 1970s.

    Comment by Wilbur — February 28, 2012 @ 11:50 am

  6. The 1970′s +/- 17 years.

    Comment by merv — February 28, 2012 @ 11:59 am

  7. apologies for repeat post, they seem to sometimes disappear for a while.

    Comment by NeilM — February 28, 2012 @ 12:13 pm

  8. The irony is, Danyl, that back when you were cheerleading Shearer against Cunliffe and people were saying they worried that Shearer would move Labour rightward, you said they were scaremongering.

    Comment by Hugh — February 28, 2012 @ 12:54 pm

  9. Merv coruscates as usual: 1970′s +/- 17 years.
    Got actual reasons why we should arf arf too?

    Comment by paritutu — February 28, 2012 @ 1:51 pm

  10. The irony is, Danyl, that back when you were cheerleading Shearer against Cunliffe and people were saying they worried that Shearer would move Labour rightward, you said they were scaremongering.

    I think this is all about positioning. Pagani’s logic is that if Shearer critiques the welfare system then Sue Bradford and Hone Harawira will come out and call him a right-wing knee-jerk beneficiary basher, and that will send a signal to mainstream voters that Shearer is heading in the right direction.

    Comment by danylmc — February 28, 2012 @ 2:07 pm

  11. “…that Shearer is heading in the right direction.”

    Literally.

    “It may yet flag the most significant reorientation of Labour thinking since the party kissed goodbye to Sir Roger Douglas.”

    Except Labour have *never* denounced or rejected the free market capitalism that Douglas espoused and implemented. Just ask Trevor Mallard. Please. Ask him on Red Alert – he should ban you in under 3 minutes.

    Which also reveals John ‘mumble’ Armstrong’s credibility as a political commentator; they may as well just ask Stephen Franks.

    Seriously – Shearer may be trying to let Key hang himself with these appalling welfare reforms, but equally Shearer could be quietly poistioning himself better, especially alongside locked out PoA wharfies and now locked out Affco meatworkers. Quiet but stirring speeches about the freedom to join a union, linking to past ‘Labour’ achievements like 8 hour work day, overtime, paid meal breaks, etc. But we don’t see that from Shearer/Labour, do we?

    You’re right Danyl, Russel & Metiria must be grinning…

    Comment by bob — February 28, 2012 @ 2:22 pm

  12. Thanks pari. No reason you should I was observing that the 1970′s weren’t that bad and the Labour benches are full of bad.

    Comment by merv — February 28, 2012 @ 2:30 pm

  13. Helen Clark did go on to say:

    Right now we have the luxury of debating these issues when New Zealand is not in economic crisis.

    possibly we did in 2001 when she gave that speech. But even after 9 years of Cullen, Helen Clark’s speech could still be given today but now without the luxury.

    The mantra of innovating our way out of our problems had been around for a while. If Shearer is going to suggest something similar then there needs to be something concrete, something more than shuffing around a few million dollars of science investment money.

    Comment by NeilM — February 28, 2012 @ 3:02 pm

  14. “If Shearer is going to suggest something similar then there needs to be something concrete, something more than shuffing around a few million dollars of science investment money.”

    Like hold a conference? With representatives of a cross section of NZ? Followed up by an Organising Committee to ensure momentum builds across the entire community, seeking fresh solutions leading to a more prosperous and cohesive society?? Oh, and don’t forget the need for a shared commitment to build on our many strengths and capabilities!

    Comment by Me Too — February 28, 2012 @ 3:31 pm

  15. >The mantra of innovating our way out of our problems had been around for a while.

    Yup and it’s total bullshit. Most of the economy isn’t innovative and it doesn’t need to be. You do work, you make stuff or provide services, and people pay for those. Rinse, repeat. Keep doing so until prosperous. How fucking innovative do you really need to be to build a house? Let alone clean a toilet or serve people coffee. But those are all important economic activities which make in many cases a much, much bigger impact on quality of life than some highly innovative thing that hits some rich niche out there.

    What’s broken is far, far more simple. The country is being ruined by finance and that can be fixed, and it can be fixed fast.

    Comment by Ben Wilson — February 28, 2012 @ 4:02 pm

  16. I don’t want an innovative builder building my house. I want a belts-and-braces old-style builder.

    Comment by Me Too — February 28, 2012 @ 4:35 pm

  17. “Pagani’s logic is that if Shearer critiques the welfare system then Sue Bradford and Hone Harawira will come out and call him a right-wing knee-jerk beneficiary basher, and that will send a signal to mainstream voters that Shearer is heading in the right direction.”

    You probably don’t see this working, but I think there is something to it. When Labour is able to stereotype the Greens as the extremist left and themselves as sensible, both parties profited. (This happened for most of the 2002 campaign, and both parties did very well up until the rise of United Future). I’m not sure that the welfare state is the right issue to draw the difference on, but I think that centering a Labour/Greens conflict in the media will pay more dividends than warm Labour/Green cooperation would, as the former drives National out of the spotlight while the latter pulls them in.

    I know it’s pretty premature to talk about driving National out of the spotlight, but I’m talking long term here.

    Comment by Hugh — February 28, 2012 @ 4:52 pm

  18. “The country is being ruined by finance and that can be fixed, and it can be fixed fast.”

    Yeah, just get rid of that dang finance! Man, I hate that stuff.

    Comment by Hugh — February 28, 2012 @ 4:52 pm

  19. Yeah, just get rid of that dang finance! Man, I hate that stuff.

    I think Ben meant ‘Fire ants’.

    Comment by Gregor W — February 28, 2012 @ 5:06 pm

  20. So Shearer not going to rush things and by the way he’s going to give his major positioning speech in two weeks. Oh well, Goff took a year to position himself and all we got was the fucking Nationhood speech. Shearer’s idea can’t be any worse, might as well get it in the open early so there’s time to give him the boot if it’s just as bad.

    Comment by bradluen — February 28, 2012 @ 5:11 pm

  21. NeilM,

    Not just a few millions, the government is proposing to give $150 million, mostly from the sale of state assets, to IRL to help spark innovation.

    The problem is that NZ isn’t innovative, or even skilled, in many high tech fields. Just go an look at the JetBlack website for the NZ challenge for the Land Speed Record, and then compare that to the UK Bloodhound Land Speed Record programme and website. Third world – if we’re lucky.

    Comment by Bruce Hamilton — February 28, 2012 @ 5:15 pm

  22. Like hold a conference? With representatives of a cross section of NZ? Followed up by an Organising Committee to ensure momentum builds across the entire community, seeking fresh solutions leading to a more prosperous and cohesive society?? Oh, and don’t forget the need for a shared commitment to build on our many strengths and capabilities!

    you left out “and look to Ireland for solutions” which was all the rage back then. We managed to dodge that bullet.

    But there’s another European coutry that has done extremely well which we could have emulated and still could, that’s Norway. Shearer could put the case for oil with the same conditions that Norway has. It would certainly differentiate Labour from the Greens.

    Comment by NeilM — February 28, 2012 @ 5:48 pm

  23. Norway slaughters their whales, too. That’d help them get votes back off the Right.

    Comment by MeToo — February 28, 2012 @ 6:19 pm

  24. off topic, I thought one interesting thing about the Oscars was the continuation of the long-standing cultural exchange via film between France and the US.

    The French make a film about American film history, an American makes a film about French film history (it all started with Méliès afterall) and best original screenplay went to a story about Americans in Paris.

    Comment by NeilM — February 28, 2012 @ 6:51 pm

  25. Roger Douglas never espoused or implemented “free market capitalism”…why this myth continues to remain is …..mmmmmmm. At best we got a re-regulated economy aimed at a more “efficient” way to fund state services…

    Comment by James — February 28, 2012 @ 9:06 pm

  26. How fucking innovative do you really need to be to build a house? Let alone clean a toilet or serve people coffee.

    You’re right!
    I’ll go and tell my builder first thing tomorrow morning to pull down all the work he’s done in the last three months, and instead build me one of those 100 year old wooden homes you see in Newtown! They’re still standing the test of time, so they MUST be better than what he’s planning to do.

    Maybe he’ll try to talk me out of it. He might even offer to sit down and have a coffee with me. But i’ll be firm – no Latte’s! – I want the same sludge that carried GI’s from Normandy to Berlin! It worked for them, so it MUST be better than what a pimply teenager can brew with a brand new machine in Wellington.

    Comment by Phil — February 28, 2012 @ 9:40 pm

  27. ll important economic activities which make in many cases a much, much bigger impact on quality of life than some highly innovative thing that hits some rich niche out there.

    With less sarcasm:
    Innovation is what drives the world forward. It’s a crucial part of what bought us out of caves, allows you and I to communicate now, put humans on other celestial bodies, and so on. All it takes is someone, anyone, brave enough to look at a product, process, or system, and say “what if we did it differently?”

    Sure, sometimes you cock it up. That’s the downside of the risk/return equation. But if you really want to convince me that “innovation” doesn’t matter, you’re going to have to convince me that we’d all be better off back in those caves.

    Comment by Phil — February 28, 2012 @ 9:46 pm


  28. I think this is all about positioning.

    What does positioning mean here? The point of positioning is to make it clear what position you hold, but clearly that isn’t what you mean here, so it would be very interesting to hear some kind of explanation of this term.

    Comment by Keir — February 28, 2012 @ 10:15 pm

  29. “But if you really want to convince me that “innovation” doesn’t matter, you’re going to have to convince me that we’d all be better off back in those caves.”

    I assume you want convinced via courier pigeon, in a message written on vellum by goose quill?

    (Not even sure I trust goose quills, but. What was wrong with a good burnt stick?)

    Comment by Andrew Geddis — February 28, 2012 @ 11:19 pm

  30. @NeilM: “But there’s another European coutry that has done extremely well which we could have emulated and still could, that’s Norway. Shearer could put the case for oil with the same conditions that Norway has. It would certainly differentiate Labour from the Greens.”

    Namely, the contrast between what Norway did with its North Sea oil, and what Britain did.

    Comment by DeepRed — February 29, 2012 @ 12:07 am

  31. Keir – in this context positioning means not “Where you stand on an individual basis” but “How you compare to the other viable political parties”. They’re connected, but not the same thing.

    Comment by Hugh — February 29, 2012 @ 12:58 am

  32. @ James, comment 24 – Douglas always pushed free market capitalism. I’m sure he wasn’t pure enough for your Randian fantasies, but until you and Lindsay get the Libertarians over that 5% threshold, … Clues that may help you identify free market capitalism of Douglas – he helped speculators bilk off our currency through a well-telegraphed devaluation, he opened up the banking sector to the nation’s best ever example of binge-purge culminating in the 87 sharemarket meltdown, he imposed corporate structures on most govt depts, and sold as many SOE’s as he could before getting sacked. Clearly the man was a communist.

    @ Keir, ‘positioning’ is showing yourself in a better light than the other parties, not about showing your parties (frequently non-existent) position on various issues. Or – heaven forbid – revealing your actual existing positions; they might scare the voters, who clearly can’t be trusted with such vital information.

    @ Phil – no-one claimed innovation doesn’t matter, just that being ‘innovative for a few rich folks’ doesn’t have as great an economic *impact* as the established products and services. Science is cumulative, so that is to be expected.

    Plus, I’m sure Ayn told you, innovation doesn’t drive the world forward, Atlas does. Unless the bastard shrugs! ;)

    Comment by bob — February 29, 2012 @ 1:53 am

  33. Yeah, I know what positioning means. The idea of positioning is to say: I am harsher on welfare cheats than x, or wevs. But that usage doesn’t make sense in the way Danyl uses it, because there’s no actual position being taken in his usage, not even in a positional sense. So I am interested in what he actually means.

    Comment by Keir — February 29, 2012 @ 2:33 am

  34. Namely, the contrast between what Norway did with its North Sea oil, and what Britain did.

    indeed.

    I suppose by innovation what we really mean is added value. Instead of logs for chpping we have some sort of Ikea selling furniture. But that doesn’t require investment in science. But it probaby does require a bigger domestic market to enable such a company to flourish in the first place. But then we do have a rich neighbour.

    Comment by NeilM — February 29, 2012 @ 8:14 am

  35. I’m in vehement agreement with bradluen here: it might seem glacial, but by recent Labour standards it’s actually pretty fast.

    As for the welfare thing: anyone who thinks this is a vote loser for the government needs their head read. They’ve clearly run the angles on it, they are committed to the program and the social experiment it entails, and Bennett’s speech in Parliament last night hit a lot of very powerful notes that will resonate strongly with the electorate.

    I disagree with the policy, but it’s well-framed and will be very hard for the opposition to put down, especially when the opposition doesn’t really know what it think, and whose thinking on welfare is muddled. Campaigning to extend the in-work tax credit to non-workers, for example. Don’t get me wrong – wanting to increase support to the poorest families is a great idea, but it has to be done in such a way as doesn’t make a mockery of their own policy.

    L

    Comment by Lew — February 29, 2012 @ 8:35 am

  36. ” Russel Norman and Metiria Turei must be grinning like jackals.”

    Laughing like hyenas I suspect.

    Comment by ihstewart — February 29, 2012 @ 8:45 am

  37. “…but it has to be done in such a way as doesn’t make a mockery of their own policy…”

    I have to agree. The failure to include those not in paid employment in Working for Families was an act of political cowardice and betrayal of the highest degree by the Labour government. But they did so, and called it WORKING for families in order to make the moralising point crystal clear.

    To the turn around and say they were going to extend the IN-WORK tax credit of WORKING for families to non-workers made a mockery of their own propaganda on the issue and neatly summed up how hopelessly inept and muddled Labour’s campaign message was under Goff. People are not as stupid and the Paginis of this world seem to think, and the people I work with couldn’t get past mocking extending a work credit to non-working people. “How can you get a work tax credit if you are not working?” Having dog-whistled middle and lower middle class prejudice against those not employed, Labour found itself hoist on it’s own petard.

    They should, IMHO, have announced an entirely new scheme called “Building Better Futures” or something mum and apple pie like that. The new scheme would be the old scheme renamed and extended to non-workers. Hey presto, who could then argue against more money for children in struggling families?

    Comment by Sanctuary — February 29, 2012 @ 8:54 am

  38. “But it probaby does require a bigger domestic market to enable such a company to flourish in the first place.”

    Protip: Norway’s population is only 20% bigger than New Zealand’s.

    Comment by Hugh — February 29, 2012 @ 12:44 pm

  39. AG @ 29 “What was wrong with a good burnt stick?”
    How the feck did you get fire? And a written language!?

    Comment by Clunking Fist — February 29, 2012 @ 2:10 pm

  40. @NeilM #34: further to the article I linked to, the Norwegian model can basically be thought of as cross betweeen the Kirk Super Fund that was pissed away by Muldoon, and a KiwiBank with oil rigs.

    I think what would work for Shearer’s Labour would be a ‘proceed with caution’ policy for oil exploration, and some kind of Temasek/BNOC-style holding company to keep a sizable share of the oil profits in NZ, if not a joint venture with the likes of Infratil/Z or Todd Energy. Especially in contrast to BANANA policies on the one extreme, and ‘Drill, Baby, Drill!” on the other. The BP Deepwater Horizon disaster and the Ogoni Delta atrocities won’t be forgotten in a hurry, and for good reason.

    Comment by DeepRed — February 29, 2012 @ 2:49 pm

  41. @ Keir, comment 33 – “…because there’s no actual position being taken in his usage, not even in a positional sense.”

    That’s the best kind of positioning! Where you’re so vague that nobody knows what you stand for, so can’t compare you adversely with your opponents,…. so *everybody* can vote for you! Winning :)

    @ NeilM, comment 34 – “I suppose by innovation what we really mean is added value. Instead of logs for chopping we have some sort of Ikea selling furniture. ….. But it probably does require a bigger domestic market …”

    Sorry Neil, but not really. NZ has lost most added value manufacturing & processing, as the wage gap between NZ and sweatshop workforces in states like India/China/Vietnam makes it cheaper to export raw resources there for processing. Your example is perfect; NZ logs are being shipped raw to China, where in the past they were sawmilled into planks, and possibly made into furniture here.

    A bigger domestic market only helps when the NZ-to-sweatshop wage gap is smaller than the transport costs of shipping raw product from NZ to sweated factory overseas, then back to NZ markets. In that case, the wage advantage sweatshops have is undermined by the greater freight costs.

    It’s worse for export products, as NZ’s isolated geographic position from our export markets means there is no real freight disadvantage to sending raw products to sweatshops overseas before sending them on to foreign markets.

    So a bigger domestic market (often proclaimed as the ‘NZ needs more people’ myth) really doesn’t help jobs here when we have free market capitalism. This is the elephant in the room that Labour & National & Greens refuse to talk about.

    Comment by bob — February 29, 2012 @ 3:40 pm

  42. @ deepred

    Big difference between the UK and Norway, apart from Norway having bigger oil reserves, is 50m people. I’m not sure the outcome would have been the same given that.

    Comment by insider — February 29, 2012 @ 4:12 pm

  43. @ deepred again

    What you and many forget when promoting the Temasek/Norway approach for NZ is that the govt would have to stump up a whole lot of cash with no guarantee of any return. If life and investment really were as simple as you suggest and returns guaranteed, we’d all sit around in a workers’ paradise waiting for the govt to invest in everything.

    Norway didn’t create its model until it had actually found a huge resource. NZ in contrast is a risky frontier with relatively low prospectivity which is why our royalties are relatively low. At the moment the govt puts effectively no money in but gets royalties on any discoveries, so it’s commercially risk free. We won’t get any credible exploration if we promise to nationalise businesses if an explorer takes a risk but gets lucky, not without us putting a lot of money up first.

    Comment by insider — February 29, 2012 @ 4:22 pm

  44. CF@39: “How the feck did you get fire? And a written language!?”

    Space aliens.

    Why – where did you get yours?

    Comment by Andrew Geddis — February 29, 2012 @ 4:32 pm

  45. They should, IMHO, have announced an entirely new scheme called “Building Better Futures” or something mum and apple pie like that. The new scheme would be the old scheme renamed and extended to non-workers. Hey presto, who could then argue against more money for children in struggling families?

    Get the hell out of my brain, Sanc.

    Comment by QoT — February 29, 2012 @ 8:43 pm

  46. “At the moment the govt puts effectively no money in but gets royalties on any discoveries”

    It gets very low royalties by international standards. It amazes me that 3rd world countries like Angola and Brazil and Eritrea can demand huge royalties or even equity stakes, while we’re happy to take a pittance from an industry that employs bugger-all locals and pays little income tax (those exploration losses will be carried forward for years).

    Consider that a higher royalty, if it discourages some investment, could yield the same income at a lower level of environmental damage — it’s a net win!

    Comment by Stephen Judd — February 29, 2012 @ 9:11 pm

  47. @stephen

    Angola 13.5 billion barrels reserves producing 300k a day
    Brazil 13.2 billion barrels reserves producing 330k a day

    Eritrea 0 barrels reserves producing 0 a day (but sitting a short hop across the Red Sea to the largest reserves known, so could get really really lucky so why not put a high price on luck?)

    They can pretty much write their own terms

    NZ 60million barrels reserves producing 61k a day

    See the slight difference?

    It;s only a net win if someone takes a risk. You’re giving them even less incentive to take that step. Seems much more likely to give a net loss

    Comment by insider — February 29, 2012 @ 10:52 pm

  48. For those toting a Norwegian model it has to be pointed out that only the most optimistic, barely credible projections have New Zealand’s potential oil finds being in the same league as those off the Norwegian coast.

    I’m not sure the model would scale down accordingly.

    Comment by Hugh — March 1, 2012 @ 2:59 am


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