The Dim-Post

January 13, 2012

Let me put it this way

Filed under: blogging,economics — danylmc @ 3:02 pm

DPF is very concerned that I might be giving David Shearer bad advice about Labour’s messaging. It’s important that Labour’s new leader only listens to serious people with Shearer’s best interests at heart – like DPF.

Anyway, I doubt Shearer pays attention to anything I say, but let me re-state my case for the record. I’m not against economic growth, per se – just the current configuration of our political economy in which the benefits of almost all that growth accrue to the already wealthy. As Idiot/Savant points out, that wasn’t the case during the last Labour government – but most of that rise in median living standards was due to re-distributive policies: increases in the minimum wage, higher taxes for high-income earners, Working for Families. Dividing the pie more evenly, in other words.

So why would a party that nominally represents ‘the workers’ – and especially lower income earners – want to move away from that legacy towards a focus on economic growth? We already have two parties that emphasise growth: National and ACT. And the benefits of that growth actually go towards the people who those parties represent. I simply don’t understand the purpose of a left-wing political party that also emphasises economic growth, when the benefits of that growth won’t go to the people that party claims to represent.


  1. I know your not against growth, but surely Labour has to do more to acknowledge that economic growth is important if ordinary people are to have more money.

    I would have thought that both parties want as much economic growth as possible.

    Where they might differ is that National is scared that policies that are too redistributive will retard economic growth, making everyone poorer.

    Meanwhile Labour thinks that it is worth sacrificing some economic growth by using redistribution to help the people on the bottom, or even that ecnomic growth will be helped by resdistributive policies (by giving people a leg up and making them more productive).

    Comment by Will Truth — January 13, 2012 @ 3:18 pm

  2. sorry….. “you’re”, not “your”.

    Comment by Will Truth — January 13, 2012 @ 3:19 pm

  3. I simply don’t understand the purpose

    Easy. It’s in order to restrict the choice for the voters to (as in Britain and the US) picking which flavour of right-wing they’d like and make sure they don’t vote for any sort of nasty left-wingers. It’s a more subtle version of puntofijismo and clearly very attractive to Farrar and the right.

    Comment by Rich — January 13, 2012 @ 3:33 pm

  4. NACT would like to be associated with growth, but where’s the evidence that they actually care about pursuing it ahead of other economic goals*? They seem perfectly satisfied pottering along at sub-2%, and why wouldn’t they be when the public hasn’t called them on it? In fact, last year they pretty much stopped talking about catching up to Australia (smartly, since Australia have moved even further ahead post-crisis), instead telling us about how we were going to return to surplus soon, it must be true, Treasury said so.

    *If you say “tax cuts”, you’re welcome to try to convince me that their primary aim wasn’t to redivide the pie.

    Comment by bradluen — January 13, 2012 @ 4:10 pm

  5. I’ve seen no evidence of Shearer et al doing this, but surely a model that allows for economic growth that is widely and fairly shared is possible and desirable? It seems a little defeatist to believe economic growth can only occur in a model that ringfences the benefits of that growth for the most powerful?

    Comment by garethw — January 13, 2012 @ 4:23 pm

  6. You are consusing Labour’s raison d’être with its success at delivering to it’s constituency.

    Pretend Labour’s mission is to ensure the working and middle classes get decent incomes, education and healthcare. Labour’s failure to achieve this over the last Labour Government (succinctly shown by the static share of pie) doesn’t preclude them having a legitimate aim in this area.

    Clark would describe herself as a Social Democrat. Clearly an unsuccesful one.

    Comment by Oh Busby — January 13, 2012 @ 4:52 pm

  7. Two bloggers, neither of whom is a Labour supporter, arguing that Labour should follow their advice.

    Move along, folks, nothing to see here.

    Comment by Hugh — January 13, 2012 @ 5:46 pm

  8. “Growing the pie” is simply the line used by the dude who’s eaten the whole damn pie and left you crumbs, to try to convince you the pie tin was totally that empty when he arrived.

    Comment by QoT — January 13, 2012 @ 8:35 pm

  9. Yeah we don’t want too much economic growth because clearly it is a NACT conspiracy to water down the workers share of the pie.

    Burn the mills.

    Comment by will — January 14, 2012 @ 5:16 am

  10. I just gave up on Kiwiblog, lately it only appears interesting for anthropological reasons, (some of the contributors are quite a study) and I am not confident that the posts are written totally without self-interest. It’s becoming more and more like the public relations department of the present administration.

    The only pie it really appears interested in is one which the author himself can tuck into.

    Comment by Eric Blair — January 14, 2012 @ 6:52 am

  11. Jesus H Christ, blog posts are written without self-interest, news fucking flash.

    Comment by will — January 14, 2012 @ 8:25 am

  12. “…The only pie it really appears interested in is one which the author himself can tuck into….”

    Call of the day!

    Comment by Sanctuary — January 14, 2012 @ 9:28 am

  13. Two bloggers, neither of whom is a Labour supporter, arguing that Labour should follow their advice.

    Yes, but Danyl *wants* to be a Labour supporter.

    Comment by Graeme Edgeler — January 14, 2012 @ 9:36 am

  14. The Bolger/Shipley and Clark governments had about the same rate of growth, 3% or a tick under, with the winner depending on the exact timeframe and data you use.

    Seems to me there’s political hay to be made in pointing out that growth under Key has been so much lower as to be nonexistent, regardless of why. The pie is a lie.

    Comment by bradluen — January 14, 2012 @ 10:46 am

  15. Something that’s always puzzled me, on a slightly different note, is why when Labour and the Greens talk about redistributing the pie they want to do it by “extending Working for Families to beneficiaries.” I’m all in favour of the policy, but I can understand why even the dimmest of people would experience a bit of cognitive dissonance when they hear politicians say that. The name of WFF implies that it goes to working people, so it seems really weird to give it to non-workers. Isn’t there another way to pitch that same policy? E.g, by starting a new scheme to redistribute funds to beneficiaries with children which works the same as Working for Families but has a different name? Or, to save on admin costs, rather than redistributing funds from the state, wouldn’t it be more elegant just to achieve that same objective by either a) big tax cuts for people earning under a certain very low threshold or b) raising benefits (although I agree this would be even harder to sell than extending WFF although, in effect, you’re basically doing the same thing)

    Comment by Amy — January 14, 2012 @ 11:33 am

  16. @ Amy – I guess they’re reading it as the state working for families? Regardless, it’s become a general financial support for people with kids. As such, I’m actually in favour of such support being extended to beneficiaries – but the whole thing totally, totally reworked. In fact, wouldn’t it be better if – instead of people getting an extra hundy a fortnight to feed their kid breakfast and lunch on weekdays, and pay for their medical care/after-school care/sporting activities – all that stuff was provided by the state to all kids, whether they were the children of people who don’t know how to budget/prioritise their kids, or those who do?

    I’m not generally speaking in favour of expanding government influence in people’s private lives, but looking at the state of our nation right now, it is clear that the satisfactory upbringing of children has become an area where laissez-faire is simply not working.

    Yeah, that’s my rant over.

    Comment by Milla — January 14, 2012 @ 7:39 pm

  17. oh yeah, I totally agree with the policy of offering more support to low income children. It is the way they are pitching it to the public that I find a little odd. I would choose a different name than Working for Families.

    Comment by Amy — January 14, 2012 @ 8:46 pm

  18. @Amy: because Labour initially framed it as “Working for Families” because they explicitly wanted to not extend it to beneficiaries. Now they’re stuck in Opposition because their usual core vote stopped showing up, so suddenly they care about actually fixing *all* child poverty again.

    But they apparently lack the basic political nous to realise that, having invested a lot of time, branding and legal expertise into WFF, it just sounds fucking dumb to suddenly want to extend a specifically-not-for-beneficiaries credit to beneficiaries.

    On the other hand, though, I guess they can hardly say “let’s scrap one of the major policies we instituted and have constantly held up as a triumph of the previous government, and reinstitute it under a new brand which also includes beneficiaries, who now apparently don’t need to be “incentivised” to work.”…

    Comment by QoT — January 15, 2012 @ 11:52 am

  19. @Amy – the policy was in fact to give it a new name and transition from WfF to the new fund. But the full description is about a paragraph and in the media it became the sound-bite “extending Working for Families to beneficiaries”. Which of course doesn’t make sense (unless you believe there is some work involved in raising kids, which obviously there can’t be, or it’d be paid or something… ).

    @QoT – the arguments on “incentivising” were revised by raising the minimum wage to $15, so that by giving everybody earning less more, there’s more scope to increase benefits to those who need them most, children, for people concerned with those arguments. Research has also continued to come in on how vital the first 3 years are and how vital it is that we don’t have 22% of our children being raised in poverty…

    @bradluen – Bolger/Shipley grew at between 2 & 2.5, Clark at between 3.5 & 4 on average – much better growth under Labour, as there always has been.

    which gets me to
    @Will Truth – it depends whether you think some growth is sacrificed by spreading the pie around. History says otherwise. By spreading the pie, more people have more cash to spend which actually helps growth. As does the increased social mobility meaning we make better use of our population’s talents…

    @Danyl – nice to hear you on NatRad this morning.

    Comment by Ben Clark — January 16, 2012 @ 1:45 pm

  20. “Yes, but Danyl *wants* to be a Labour supporter.”

    I’m sure if Labour started following the quixotic mix of policies he thinks is OBVIOUSLY the best for New Zealand (on any given day) he would be happy to support them. But I think that is also true for DPF, me, you, Sanc, Redbaiter, Cactus Kate and Lord Fucking Lucan for that matter.

    Comment by Hugh — January 16, 2012 @ 2:41 pm

  21. Bolger/Shipley grew at between 2 & 2.5, Clark at between 3.5 & 4 on average – much better growth under Labour, as there always has been.

    There’s soooo very much wrong with that chart, I can’t actuallydecide where to begin. Some of the comments over at TheStandard gave a shot at fair critique, but the usual cadre of big-men-behind-little-computer-screens drowns all useful take-out from the posts.

    Comment by Phil — January 16, 2012 @ 7:07 pm

  22. When National was crushed in 2002 they did not change their monetarist policy. They had it then and they have it now. In fact, they intensified it, bringing in Brash as someone who knew about no other ideas whatsoever, and still doesn’t. Labour can’t really follow this policy because they don’t actually have an alternative to monetarism at all. They can’t reform our economic system, because they wouldn’t have the first clue where to start.

    So the battle isn’t about anything fundamental – it really is about the crumbs from the pie and who gets them. The pie is gone, we don’t even own it, it’s not the government’s to divvy up in the first place. Should they go to the rich or the workers? Forget all other classes, these are irrelevant in both capitalist and communist economics. Forget about value – there is only price. Forget about the disaffected – they don’t vote. Forget housewives, they are summed up by their husbands income. Forget the unemployed, they can be cowed back to work by hardship. Forget the artistic people – they have no power of any note whatsoever. Forget criminals, they don’t deserve to live. Forget students, they can borrow their education, since they will take it overseas with them anyway. Forget kids, they can’t vote.

    Don’t forget the elderly, though. They can and do vote. Their pensions and assets must be safe, and their healthcare extensive. They were once workers, so they fit the narrative.

    On no account forget about banks – they control the entire economy. They are the overlords who must be pacified or they will rain economic destruction. Oh, wait, I mean *more* economic destruction.

    Comment by Ben Wilson — January 17, 2012 @ 2:07 pm

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