The Dim-Post

January 13, 2012

Mmmmm. Pie.

Filed under: economics,Politics — danylmc @ 9:53 am

Labour Party candidate Josie Pagani (relation) has a column in the Herald about Labour’s identity problem. Some of it’s interesting, but this jumped out at me:

There’s a reason we’re called “Labour”: We have always represented people who work. If you work hard you should earn enough to pay the bills, save a bit and enjoy the holidays with your family. If you have a great idea to build a business and work really hard, a Labour government will back you to be world class. It’s not just about dividing the economic pie fairly, it’s about increasing the size of the pie so everyone can get their piece.

Growing the pie. David Shearer used the same cliche in his first speech to Parliament. Here’s my question: why are Labour still using ACT Party rhetoric about the panacea of economic growth, when all our economic statistics, social indicators and lived experience over the past thirty years tell us that the benefits of ‘growing the pie’ now aggregate to a  small number of high-net worth individuals? The rest of us stay where we are, or go backwards.

For a few years during the mid 2000s it felt like we were going forwards – but that was just a bubble fueled by overseas debt. During this time Helen Clark constantly resorted to the tired old Kennedy/Sorenson trope that ‘a rising tide lifts all boats’. But this just isn’t an accurate way to think about economic growth. It may, eventually lift general living standards over a long period of time, but it always involves an element of ‘creative destruction’. Businesses go bankrupt and people lose their jobs, and their occupations become obsolete.

I’m just a simple, blogger, but I really think voters would listen to a party that stopped trying the match the National/ACT rhetoric about economic growth, and acknowledged these very simple truths about our economy and the way it impacts on the lives of ordinary people, and talked about ways to mitigate it.

To be fair, some of Labour’s policies leading up to the election did address these issues – but they weren’t wed to any comprehensible narrative – and now, an emphasis on ‘growing the pie’ makes capital gains tax and a more progressive income tax system even less coherent.

56 Comments »

  1. Good points. Talking about “growing the pie” is different to talking about the way it is to be sliced, and Labour used to talk about the size of the portions and ACT the size of the pie. Labour’s solutions though have always been muddled and contradictory. Shearer talking ACT messages confirm this. As his his approach of staying quiet of the POAL issue. Maybe he hopes to take over ACT if the current gig doesn’t work out? They’d probably welcome him for 5 minutes.

    Comment by ZenTiger — January 13, 2012 @ 10:05 am

  2. i would vote for any political party that acknowledged infinite economic growth wasn’t possible, or even desirable, on a finite planet. but sadly even the greens won’t acknowledge that these days

    Comment by Amy — January 13, 2012 @ 10:07 am

  3. Our gross average gdp growth over the last 20 years has been pretty good. And gdp growth is also a pretty good proxy for opportunity in both business and jobs. Which is another reason why our basic economic framework hasn’t been changed dramatically in the same period. People focus on politics when they are not able to make progress in other parts of their lives or there is widespread frustration at the way in which the world is working or not working – when they can’t get jobs or their kids can’t get jobs. Perhaps you just haven’t looked outside the lab or lecture theatre in that time or spent too much time looking for stats to confirm your own views.

    Comment by Tinakori — January 13, 2012 @ 10:26 am

  4. Considering that the 3 main biggest bills in my life are 1. (by a huge margin) the cost of housing, 2. Food, 3. Power, all of which we make plenty of (local food would supply all the nations need many, many times over), it’s clearly not about the size of the pie. It isn’t because NZ doesn’t make enough food that even people who aren’t homeless are turning up at food banks. It isn’t because there is not enough housing that it’s the biggest expense in most people’s lives. It isn’t because NZ doesn’t make enough electricity that the stuff costs so much, considering it falls from the sky into dams we actually own.

    There’s a basic failure to present alternatives in our top 2 parties, and the Opposition scratches it’s head and wonders why people voted for third parties, or didn’t even bother? Could it be because they both represent bankrupt ideology?

    Comment by Ben Wilson — January 13, 2012 @ 10:38 am

  5. Firstly, I think that use of the language of the hard-right by even left wing commentators shows how far language and therefore, as Orwell fully understood, the way we think about economics has been colonised by the hard right. Roger Douglas once said he designed his reforms to be irreversible; That sort of ideological zealotry will always include an attempt to control language, because that way you can control how people think. We are now in an age of attempted neolibspeak.

    Secondly, since at least the rise of Thatcherism/Reaganism and it’s bastard child middle class “third way” identity politics combined with the “end of history” and the “defeat of communism” with the fall the Berlin Wall, when socialist parties everywhere have talked about economics they been excoriated by a triumphalist right and that triumphalism has been echoed by the mainstream media. Socialists have become used over the last quarter century or more to apologising for their beliefs, not unashamedly and boldy pronouncing them.

    Thirdly, Labour (in common with main stream left wing parties everywhere) has been colonised by third way middle class liberals who actually have done quite well out of the reforms of the last thirty years thank you very much. They don’t really want a re-distribution of wealth to the beneficiaries, working class and working poor, they would just like a little bit more to trickle down.

    The carapace of neolibspeak and middle class capture that has afflicted socialist parties across the English speaking world means they’ve developed a tin ear to the increasing discontent with the rampant, avaricious greed of bubble capitalism. It is still an open question as to whether or not the flag bearing parties of socialism can wake up from their ideological slumber and re-discover the language and policies to force change on the capitalist classes.

    Comment by Sanctuary — January 13, 2012 @ 11:15 am

  6. That sort of ideological zealotry will always include an attempt to control language, because that way you can control how people think.

    Even totalitarian states did not control people via language, the did it via state run terror. Even then it never changed how people thought, it changed how they behaved.

    Comment by NeilM — January 13, 2012 @ 11:24 am

  7. Growing the pie does work, but only up until around ~US$10,000 per household. After that people just get consumerist and there never is “enough”🙂

    Comment by Sam Vilain — January 13, 2012 @ 11:34 am

  8. [audio src="http://podcast.radionz.co.nz/ideas/ideas-20110619-1106-ideas_for_19_june_2011_a_new_economics-048.mp3" /]

    Well worth a listen. Unfortunately these ideas are well ahead of the curve of any current political offerings…

    Comment by nommopilot — January 13, 2012 @ 11:45 am

  9. particularly like the proposition of analogy between economics and ecosystems…

    Comment by nommopilot — January 13, 2012 @ 11:46 am

  10. Criminy, did you just eat the social workers handbook my dear man.

    Comment by Sanctuary — January 13, 2012 @ 11:15 am
    The carapace of neolibspeak and middle class capture that has afflicted socialist parties across the English speaking world means they’ve developed a tin ear to the increasing discontent with the rampant, avaricious greed of bubble capitalism. It is still an open question as to whether or not the flag bearing parties of socialism can wake up from their ideological slumber and re-discover the language and policies to force change on the capitalist classes.

    Comment by merv — January 13, 2012 @ 11:51 am

  11. “Even totalitarian states did not control people via language”

    Yes all the propaganda was just for fun…

    I think language is certainly an important aspect of societal control. The frameworks used to describe and debate policy create limits to what can be seriously proposed and discussed and this greatly affects what policies get chosen.
    Sure the guns help keep the rabble in line but you are mistaken if you think that language has no effect on the evolution of societies and political ideas…

    Comment by nommopilot — January 13, 2012 @ 12:06 pm

  12. Labour has concluded that they lost the election so badly by being too left so plan to tack to the right.

    Worked for National:
    – Bill English was a mediocre leader with no coherant message and got soundly beaten by a popular first term government (sound like Goff?).
    – Don Brash moved the party to the right ideologically and had a consistent message. The message resonated with some people (he lifted support substantially) but was still rejected.
    – John Key moved the party way back to the centre adopting policies like WFF, the ETS and the state ownership of Kiwibank that he completely disagrees ideologically with in order to get elected.

    Seems that some in Labour have decided that they need to agree with National more and sound more centrist in order to win – they are probably right. Labour should move more to the centre promoting a different vision of economic management and take votes from National.

    They need not just to accept the loss of votes to the Greens but be willing to see it accelerate. Votes to the Greens does not hurt Labour, quite the opposite, they can be useful strategically. As Josie says, there were a lot of people quite opposed to the policy of extending WFF to the very poor (i.e. those who through unemployment, sickness or disability are currently ineligible). There was no need for Labour to announce this as a policy – it was already Green policy. They could have campaigned on other issues and then when in government implemented the policy and said “The Greens made us do it”.

    The pie analogy is correct just in a different context. The right wing coalition has a bigger pie than the left wing coalition. Labour can try and win back votes they’ve lost to Greens, NZ First, Maori and Mana, or they can ‘grow the pie’ and try to bring in more votes either through winning votes from National or mobilising a decent chunk of the million people who decided not to vote this election. As you’ve indicated having a ‘comprehensible narrative’ is key to that especially amongst non voters.

    Comment by Richard29 — January 13, 2012 @ 12:06 pm

  13. why are Labour still using ACT Party rhetoric about the panacea of economic growth, when all our economic statistics, social indicators and lived experience over the past thirty years tell us that the benefits of ‘growing the pie’ now aggregate to a small number of high-net worth individuals? The rest of us stay where we are, or go backwards.

    Because that wasn’t true when Labour was in power (graphs from MSD’s annual Household Incomes survey, which I expect National will be discontinuing any day now). There’s a clear difference in distributive outcomes between a National economy (marked by high unemployment and regressive tax changes to drive upwards redistribution) and a Labour one (marked by full employment / RBNZ-engineered labour shortage, large increases in the minimum wage, and a more progressive and redistributive tax system).

    The problem, of course, is that the more we live in a National economy, the more we believe that rhetoric is empty, and the more reason we have to be suspicious of all talk of “economic growth” (because when National is in power, such talk is actually a threat, not a promise of better times).

    Comment by Idiot/Savant — January 13, 2012 @ 12:19 pm

  14. Are you using creative destruction in Schmupeter’s (relatively) positive way there, or in the Marxist capitalism-will-eat-itself way?

    Comment by garethw — January 13, 2012 @ 12:21 pm

  15. Nice question.

    Comment by Adam — January 13, 2012 @ 12:29 pm

  16. I’m using it in Schumpter’s sense – but a lot of the innovation currently taking place is of a type that concentrates wealth. Moving retail online, for example, meaning the closure of retail stores and unemployment of staff.

    I think online retail is generally a good thing, that it constitutes a form of economic growth and I’m not opposed to that. But the people who benefit from it already have political parties that represent them: National and ACT. Why would Labour try and occupy the same strategic space?

    Comment by danylmc — January 13, 2012 @ 12:57 pm

  17. There’s a clear difference in distributive outcomes between a National economy (marked by high unemployment and regressive tax changes to drive upwards redistribution) and a Labour one (marked by full employment / RBNZ-engineered labour shortage, large increases in the minimum wage, and a more progressive and redistributive tax system).

    But those outcomes were due to policies like a more progressive tax system and working for families – ie. DIVIDING the pie more evenly.

    Comment by danylmc — January 13, 2012 @ 1:11 pm

  18. Lets just understand one thing here – Labour did not want to win the last election! If they had really wanted to David Cunliffe should have rolled Phil Goff well over a year ago. “No”, said David to me in a Facebook conversation.”Our leadership is all decided, and the party is right behind Phil”. Now David Cunliffe has paid the ultimate price for betraying the NZ people and not giving them a fair chance of getting rid of the fascist National government. David Cunliffe will never get another opportunity at leadership of Labour – he will never be prime minister of NZ, something the Phil Goff wanted, but never really had a chance to be

    Comment by Peter Petterson — January 13, 2012 @ 1:23 pm

  19. “I think online retail is generally a good thing, that it constitutes a form of economic growth and I’m not opposed to that. But the people who benefit from it already have political parties that represent them: National and ACT. Why would Labour try and occupy the same strategic space?”

    Online retail is the future – Online retail, Free trade, the Knowledge Economy these are all elements which have a tendency to concentrate wealth. Online reduces the need for retail staff, Free trade and comparative advantage trend towards fewer more specialised industries rather than a generalist economy, the knowledge economy by it;s nature concentrates jobs and pay amongst the educated at the expense of the uneducated.

    To say that N-Act represent these interests is to say that Labour is the party of the past tasked with reinventing the 50’s-70’s. You might as well tell them to pack up and go home…

    Comment by Richard29 — January 13, 2012 @ 1:28 pm

  20. Sure. But they ensured that when the economy grew, it really did make everyone better off (and the poor far more than the rich).

    Though, it is unclear whether Pagani’s professed interest in distribution is just a Blairite rhetorical mask for her sudden interest in pandering to Waitakere Man. And this is why Labour needs to be explicit about what it is offering, and what it hopes to achieve. If they’re not, they have only themselves to blame when people interpret growth as a threat.

    Comment by Idiot/Savant — January 13, 2012 @ 1:29 pm

  21. a lot of the innovation currently taking place is of a type that concentrates wealth
    An interesting thought, as one of the drivers of his work was a specific belief that creative destruction was required to minimise wealth concentration. He thought it was needed to break the formation of oligarchies and refocus wealth creation into other parts of the economy. But he viewed it through the lens of the entrepreneur (and at quite a macro level) rather than as any tendency for creatively destructive firms to be more or less labour intensive (and it’s resultant wealth distribution models).

    Comment by garethw — January 13, 2012 @ 1:29 pm

  22. It’s not about being left wing or right wing or adopting this parties policy it’s about giving the appearance of being competent and of being a government in waiting.

    And yes we need growth, that is how you create jobs and that should be Labours number one policy – more jobs (with good wages).

    Comment by Ieuan — January 13, 2012 @ 1:35 pm

  23. Warren Buffett states: “A rising tide lifts all swimmers, but when the tide is out you can see who’s swimming naked.”

    Growing the pie needs to consist of invigorating our old state-owned enterprises, such as (dare I say it) forestry.

    Comment by Daniel Lang — January 13, 2012 @ 1:46 pm

  24. >but a lot of the innovation currently taking place is of a type that concentrates wealth. Moving retail online, for example, meaning the closure of retail stores and unemployment of staff.

    Yup, innovation aimed at cutting staffing costs is a great boon to consumers (sometimes). Not so much to workers, which the lion’s share of us are, in some form or other. One of the great ironies of programming is that software has facilitated enormously the outsourcing of the software business. So we didn’t just program everyone else out of a job, we did it to ourselves too.

    Not that I think work that could be done by machines shouldn’t be, just to keep people in work. That’s ridiculous. But some way of socially managing the social cost of that being a continual outcome in all society needs to be considered. Otherwise we get the stupid situation of oversupply and underemployment being a neverending feature of our productive enterprise.

    We need to somehow come to terms with the idea that is actually NOT the ultimate destiny of all humans to work like machines until discarded, and engineering society to make it so is not progress. That is my main gripe with Worker oriented socialism – it’s still buying into the fucked up economics of neoclassical capitalism. Full employment is not actually what we worked for thousands of years to achieve. If anything it would have been full unemployment. That is how the wealthiest people live, working only if they feel like it. And from that idle, rich class came most of the greatest human creations of all time – the profoundest thought, the most imaginative innovation, the best art, the most touching literature. When we get spare time, our first thought isn’t to go down to the office to fill out some paperwork, and when we retire, we mostly don’t feel like putting on a suit and heading in for another 9-5 shift.

    Comment by Ben Wilson — January 13, 2012 @ 1:47 pm

  25. How it worked through the 20th century:
    – technology improvements grew Labour productivity
    – the wealth from that rewarded and grew the middle class
    – that middle class identified with the wealthy and supported capitalism
    – said technology improvements were enough to compensate for resource exhaustion and third world development
    – the underclass lost out, but were too small and marginalised to matter

    We’ve now passed the point where the size of that middle class (in the “west” and elsewhere), set against resource exhaustion means that middle class rewards are falling at an increasing rate. While politicians might try and reshuffle deckchairs, it’s becoming increasingly obvious that each generation is going to be poorer than its parent.

    So the challenge is to live on less and share resources, not imagine we can magic up growth.

    Comment by Rich — January 13, 2012 @ 2:06 pm

  26. s/Labour/labour

    Comment by Rich — January 13, 2012 @ 2:07 pm

  27. So the message Labour has taken from the election is that more of the same ‘me too’ National-lite is the way to go, and that they were punished at the election for being too much of a radical left wing party?

    I think they should also be aware of the support they lost for simply not being credible as an exponent of a centre-left philosophy over the last 3 years, and as we see the drums beating for privatisation of the ports wonder why anyone with memories of Bruce Jesson and co. would bother to go down the polling booth to vote for those who are ashamed of the achievements of the Clark governments in sharing wealth more evenly in our society. The votes lost to NZ First and the Greens weren’t lost to the right. Nor is National or the right impregnable as economic managers, just that a credible case hasn’t been consistently made opposing their failures.

    Though as I/S points out the Greens haven’t exactly covered themselves with ideologically consistent glory here either.

    Comment by sheesh — January 13, 2012 @ 2:40 pm

  28. “but a lot of the innovation currently taking place is of a type that concentrates wealth. Moving retail online, for example, meaning the closure of retail stores and unemployment of staff.”

    It doesn’t concentrate wealth. It does the precise opposite. It usually means reducing the living costs for all lower income people (while also lowering the incomes of the owners of retail property). Just as the removal of protection for car assembly in NZ cut jobs for some and decreased the costs of transport for all. Allowing the importation of used vehicles also decreased transport costs for lower income earners. The big losers were assembly workers and car firms (because in a protected market their products sold for inflated prices) and the winners were all other NZers.

    Comment by Tinakori — January 13, 2012 @ 2:50 pm

  29. The big losers were assembly workers and car firms (because in a protected market their products sold for inflated prices) and the winners were all other NZers.

    That’s a perfect illustration of my point. That ‘the rising tide’ does not lift all boats. Economic growth is generally a good thing, but it causes economic distress to some sections of the economy, ie real people. So it seems like a healthy democracy would have two parties, one which said, ‘we’re going to focus on economic growth’, and another that said, ‘we’re going to mitigate its negative effects.’

    Comment by danylmc — January 13, 2012 @ 3:09 pm

  30. The pressing task for Labour is to construct a compelling critique of National. They pretty much failed to do this last term. The critique then was about stuff that National had yet to do, like asset sales, rather than past performance — aside from complaining about the deficit, which was never a winning line. If all the “growing the pie” bullshit leads to a coherent critique of National’s economic performance, e.g. in terms of growth, then good for them (and good for us, if their nagging spurs National into actually doing something to end the stagnation). The use of cliches suggests they haven’t figured out how to grow the pie yet — aside from the all-purpose answer of SCIENCE! — but as they’re not going to be in power for at least three years, and because the last election showed voters are indifferent to Opposition policy details, this isn’t as urgent.

    Comment by bradluen — January 13, 2012 @ 3:36 pm

  31. “So it seems like a healthy democracy would have two parties, one which said, ‘we’re going to focus on economic growth’, and another that said, ‘we’re going to mitigate its negative effects.’”

    But that second party is still focussing on economic growth – otherwise there are no effects to mitigate. You can’t redistribute wealth which is not being created.

    The original line from Shearer that you quoted was:
    “It’s not just about dividing the economic pie fairly, it’s about increasing the size of the pie so everyone can get their piece.”

    The word ‘just’ is important here. He is not saying that dividing the economic pie fairly is unimportant, he is saying that growing the pie is ALSO important.

    In effect the two positions are:

    Nat: Create Wealth
    Lab: Create Wealth and share it.

    Comment by Richard29 — January 13, 2012 @ 3:39 pm

  32. Only someone who belongs to the Mandarin class (an academic) thinks like this. 12 weeks holidays a year guaranteed fat salary courtesy of the taxpayer -possibly tenure for life. Who needs to care about economic growth. Try making something and competing on the world market for sales. It will do wonders for your effortless superiority.

    Comment by monty — January 13, 2012 @ 3:49 pm

  33. In the short term any growth should be achievable with minimal negative effects because there’s so much slack in the economy. Growth would put people into work, rather than out of it (except maybe Alan Bollard).

    Comment by bradluen — January 13, 2012 @ 3:52 pm

  34. It’s not an either/or. People will grow the economy if you let them, and there aren’t really any parties thinking of not letting them. The difference is around who benefits, and if you don’t actively work to make it otherwise, then “the benefits of ‘growing the pie’ … aggregate to a small number of high-net worth individuals.” That “actively working to make it otherwise” is Labour’s ground, and that’s the bit they should be selling to voters, not the growth bit, which is Nat/ACT’s.

    Comment by Psycho Milt — January 13, 2012 @ 3:54 pm

  35. Ah, Monty. Living in the rose-tinted past. Show me an university job with 12 weeks holiday a year and tenure for life and I’ll be first in line to apply for it. Tenure these days comes with conditions like maintaining your PBRF ranking and research outputs fitting the required profile (quantity plus rankings). Academics may not make “things” and compete on the world market for sales, but they make “research” and compete in the cut-throat world market for publications.

    So your critique of the effortlessly superior Dim-Post’s post is what?

    Comment by Me Too — January 13, 2012 @ 4:21 pm

  36. Car firms were not losers, assembly plants in NZ weren’t as profitable as CBU ( completely built up ) imports, but tariffs deliberately distorted their options. How sensible is it to take a CBU truck in Japan, disassemble it, put two in a container, and then rebuild each when it arrive at Petone?. Car firms went to CBU imports and probably made more money. Besides the workers, and NZ-based component makers, all of the downstream industries suffered when car prices decreased.

    Given the increasing technology in car structures (eg high strength steels for bodywork and crush zones ), NZ, because of the market size, was unlikely to remain in car assembly – even Australia is considered marginal now. The bigger problem is that we have entered the throwaway age. It’s not worth fixing older cars, hence we import cars and export them as scrap steel on an ever-diminishing cycle time.

    The environmental cost of an new car is written off before it’s fully paid off, thus trades that used to help maintain cars are not required. Panelbeaters, garages, upholsters etc. have decreased as owners want newer cars, even though olders ones still transport people.

    There should be discussion about the quality and desirable attributes of any ingredients required for a larger pie. Just like apples, larger doesn’t mean better for the consumer.

    Comment by Bruce Hamilton — January 13, 2012 @ 4:26 pm

  37. ‘Try making something and competing on the world market for sales. It will do wonders for your effortless superiority.’
    Money where mouth is, Monty? Show how you know better.

    Comment by Galeandra — January 13, 2012 @ 4:28 pm

  38. “effortless superiority.’”

    ha. whereas your condescending dismissal of everyone not running their own business as having it cushy requires considerable effort, eh?

    Comment by nommopilot — January 13, 2012 @ 4:57 pm

  39. There’s too much attention given to “growing the pie” and “sharing the pie”.

    We’d all be better off concentrating more on improving the meat and veg, and making do with less pastry and gravy.

    Comment by Pete George — January 13, 2012 @ 7:09 pm

  40. Australians know how to grow the pie. Long ago, with time to kill at Melbourne’s Flinders St station, I watched them do it.
    At the pie stall each customer was asked “Sauce?”
    Almost invariably they did. Tomato sauce was applied from an enormous plastic syringe, refilled from a bulk drum, White Crow brand.
    The tip of the syringe was inserted into the edge of the pie’s concave upper crust and given a gentle pump. Suddenly the pie became very convex.
    A bit of a knack required when first biting into the thing, even Trevor Mallard could manage it with a little coaching.

    Comment by Joe W — January 13, 2012 @ 7:44 pm

  41. ‘We’d all be better off concentrating more on improving the meat and veg, and making do with less pastry and gravy.’

    Yeah sure thing Pete… even though you just stood for election for a Party whose sole representative is committed to the sale of the meat,veg,pastry and gravy.
    Who will be better off with…nothing?

    Comment by Peter Martin — January 13, 2012 @ 11:20 pm

  42. @Bruce Hamilton: “NZ, because of the market size, was unlikely to remain in car assembly – even Australia is considered marginal now.”

    Australia’s even debating its own car subsidies and import tape right now, in fact.

    Comment by MikeM — January 13, 2012 @ 11:46 pm

  43. Damn right Danyl. Fuck the fucking stinking ACT pie. ACT the party of traitors is fucking dead and buried and If you can sit on your fat arses and happily watch other people struggle, you’re dead ACT shit too, no matter what’s on the menu. Applies to each and every one of you who are letting 40,000 perfectly-formed children die every day for want of cents, especially J Key and his ilk who’s allowing hundreds to die daily just based on the interest off his millions, the murdering scumsucking prick. Pie? Fuck off – if it wasn’t for us oldies slaving our guts out for crumbs, you wouldn’t even have a crust, and then you’d want all of it, and if the Paganis want to dogwhistle to ACTshitpeople, then they’re fucking ACT dogmeat too.

    Funny, innit: we’ve got a nation-wide network of beneficiary advocate organisations but they’re never called on to comment while every other Josie Hunt and her mongrel dog is an expert on deadbeat bludgers without ever having got off their pony to piss on one. Don’t get me started.

    Comment by ak — January 14, 2012 @ 12:30 am

  44. Peter Martin: committed to the sale of the meat,veg,pastry and gravy.

    That illustrates one of Labour’s great election mistakes, gross overstatement. Most people are sort of against asset sales but probably don’t even remember which power retailer they buy their power off.

    All power does is help bake the pie (if you don’t use gas). Putting most of their eggs into a negative campaign to stop a few half sales came off half baked for Labour. That’s why they didn’t bring home the election bacon.

    Comment by Pete George — January 14, 2012 @ 7:52 am

  45. Look at the job market now compared to what it was like in 2004. A strong economy makes it easier for normal, working people to maintain a standard of living. This is why politicians keep banging on about it.

    The actual distribution of wealth is an entirely separate matter.

    Comment by Dion — January 14, 2012 @ 10:53 am

  46. It usually means reducing the living costs for all lower income people (while also lowering the incomes of the owners of retail property).

    Precisely tinakori. Regarding online retailing, you have pointed out a key point which the ludite Danyl has ignored. Online retailing creates goods available cheaper to consumers and creates a consumer surplus. Which means that they can spend more purchasing other goods and services and therefore increasing employment in other lines.

    This is important in regards to the idea that wages are stagnating (they’re not). What many people who look at wages do is only look at the dollar amount. They ignore the increased amount of goods that the same wages can buy. For instance:

    Comment by Quoth the Raven — January 14, 2012 @ 12:16 pm

  47. aside from the all-purpose answer of SCIENCE!

    I can recommend the phrase: “white heat of the technological revolution”

    Comment by Rich — January 14, 2012 @ 7:46 pm

  48. Rich @ 24. “How it worked through the 20th century… the wealth from that rewarded and grew the middle class”
    And the new middle class were…? That’s right: previously poor. An aristocracy was giving way (to some extent) to a meritocracy.

    Bruce Hamilton @ 34 “There should be discussion about the quality and desirable attributes of any ingredients required for a larger pie. Just like apples, larger doesn’t mean better for the consumer.”
    So, like many on the left, you would decide for the car buying public what is best for them?
    “The environmental cost of an new car is written off before it’s fully paid off, thus trades that used to help maintain cars are not required.”
    Are you sure it’s not the requirements to meet ever tougher new WOF that takes cars off the road (yep a GOVT REGULATION, but not one that I particularly disagree with, even though it’s probably drivers that are unsafe, not cars)? Not simply the fickle desires of the consumer? As an owner of older cars, I can confirm that today’s old cars rust much less than yesterday’s old cars. And are warmer, dryer and shitloads nicer to drive.

    Comment by Clunking Fist — January 16, 2012 @ 1:33 pm

  49. I think unsafe vehilce crashes are are judging by the news. Do we really need a WoF every six months? Very few countries seem to do similar. Seems a hangover long due for a review by the regulatory review panel.

    Comment by insider — January 16, 2012 @ 2:13 pm

  50. “are relatively rare judging…” I meant

    Comment by insider — January 16, 2012 @ 2:14 pm

  51. think unsafe vehicle crashes are are judging by the news.

    Depends on what you mean by unsafe vehicles.
    Anything turbocharged/lowered in the hands of a teenage male? Unsafe.
    Then again, switching to a six monthly driver Warrant of Competence would be way too hard and infringe on peoples God given right to drive like fucking maniacs.

    Given that our fleet is relatively old by world standards, I’m not too fussed about a WoF every 6 months.
    If it wasn’t enforced, no-one would ever check their tyres, belts or brakes. Small price to pay.

    Comment by Gregor W — January 16, 2012 @ 3:29 pm

  52. CF
    “” Bruce Hamilton @ 34 “There should be discussion about the quality and desirable attributes of any ingredients required for a larger pie. Just like apples, larger doesn’t mean better for the consumer.”
    So, like many on the left, you would decide for the car buying public what is best for them?”

    Wow, I didn’t realise my composition skills are that bad. I suggest a discussion about desirable attributes of how we may grow the pie, and I’m apparently “like many on the left” – which fortunately happens to be the safest side of the road to drive here in NZ… Rather than categorise me, maybe you should recalibrate your blinkers?.

    ““The environmental cost of an new car is written off before it’s fully paid off, thus trades that used to help maintain cars are not required.”
    Are you sure it’s not the requirements to meet ever tougher new WOF that takes cars off the road (yep a GOVT REGULATION, but not one that I particularly disagree with, even though it’s probably drivers that are unsafe, not cars)? Not simply the fickle desires of the consumer?”

    We are not like Japan, who implemented stringent WOFs to help their auto industry decades ago. NZ was lucky that Russia had a $250 limit on imports – so the real dross of WOF rejects from Japan went there. We got the next level, as that was largest % margin for NZ importers.

    The cost of mechanical repairs has increased because the cost of fixing the diverse types of imports into NZ has increased to the point where the incremental cost of a more modern imported vehicle appears attractive to owners. Many mechanical spare parts, even if readily available, can be exorbitantly-priced, and then there’s the cost of the labour for repairing.

    Frequently, new or replacement parts aren’t even readily available for many imports, and owners don’t want to wait. The total cost to replace a timing belt on cars, or even CV joints, is now greater than the market value of some 15 year-old cars with 150,000+ km. Many cars are crushed because repair costs outweigh residual market value – it’s a good excuse for change.

    People extoll the virtues of a younger vehicle fleet ( safer ), and more fuel-efficient ( but not so if owners also upsize to SUVs etc ), but we are dumping vehicles that still have potential for life. Modern SI engines and bodies could last 200K – 300K km, and CI engines 400K+ km.

    However, my earlier assertion may soon be tested, as the newly-implemented regulations will require vehicle imports to meet increasingly-stringent tailpipe emission standards. That should push up the base price of imported vehicles, possibly decrease the variety of imports, and also justify increased spending on maintenance. It’s not fickle for consumers to consider the best value-for-money, especially if vehicle status is important to other family members.

    “As an owner of older cars, I can confirm that today’s old cars rust much less than yesterday’s old cars. And are warmer, dryer and shitloads nicer to drive.”

    In my limited experience, the cost of bodywork repairs (rust) has decreased on “old” cars – because rust is now caught much sooner during WOF inspections, often one, if not two, WOFs in advance of rejection. My garage now suggests to me ( and I assume other owners of older cars ) when to fix rust. Rust patches for repair are much smaller, and the cost of the cosmetics ( painting ) is now often a significant component of the repair price.

    Cars now go to the crusher because the value of scrap steel is greater than for anytime previously. We used to have to pay to get rid of cars that failed WOFs ( rust or mechanical ), but now they are worth several hundred dollars, and the metal merchants collect vehicles from your garage or home – maybe even without asking🙂.

    Comment by Bruce Hamilton — January 16, 2012 @ 6:03 pm

  53. Hi Bruce of 36 (not 34) perhaps it’s my reading comprehenson: as I now am not sure why I got to mithering.

    But anyways: as the driver of one of those vehicles that are one-level up from “dross”, I can confirm, leaving aside that some folk are snobs, there is nothing wrong with it. I have had it since 2004, and it’s a 1998 model. It gets serviced every 6 months (and wof at same time) for between (higher than in past years) $200 and $650 (exc tyres), cost $10,000 and now (in my opinion) owes me nothing, drives sweetly and still takes the family on the odd road trip. Rust has not been mentioned in any wof inspection. It’s on its second cam belt, having passed the 200k km mark.

    Comment by Clunking Fist — January 16, 2012 @ 8:10 pm

  54. I haven’t read all the comments as I don’t have time. But that “growing the pie” talk seems, to me, to be a re-cycling of Tony Blair’s “Third Way”. Blair’s fateful decision to join the US-lead gang bang in Iraq effectively undermined everything else his government did. We may never know the true fate of the “third way”…..though without income re-distribution mechanisms mixed in somehow it’s just National Party policy with a feel-good smiley face.

    I voted Green. Looks like I certainly will next time, too. I’ve been a Green voter for a couple of decades now…and Labour persists in giving me no reason to change that.

    Comment by Steve (@nza1) — January 17, 2012 @ 2:44 pm

  55. Steve, I would suggest that you consider voting for the Liberals. Two parties of the future in NZ: the Conservative party and the Liberal party. National and Labour have had their day and will gradually decline over the course of the next fifteen years.

    The Liberals believes in state-owned forestry and fishing ventures; superannuation to be reduced to 62 years; lower personal taxes; affordable housing; and more freedom from the Government.

    Conservatives believe in a four-year Government term; continued tax cuts for the rich and tax breaks for big businesses; repealing section 59 which will allow smacking again; etc. They care little for the environment and the “working class”.

    Comment by Daniel Lang — January 20, 2012 @ 1:37 pm

  56. The Liberals believes in state-owned forestry… and more freedom from the Government.
    The Liberals believes in superannuation to be reduced to 62 years… and more freedom from the Government.

    It’s not the government I’m worried about: it’s those poor taxpayers that would have to fund your fantasies.

    Comment by Clunking Fist — January 22, 2012 @ 2:02 pm


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