Muddling the numbers in an uncertain world

Will 2011 be the midnight year when the undead stalk the echoing halls of power, seeking political necks for blood? That is one of the big questions for the two big parties when they emerge from holidays.

It is no idle question. First, there is a measure of unease, despite the government’s high poll ratings. Winston Peters is adept at feeding and feeding off unease. Second, if he gets over 5 per cent, he might get in the power game.

The Wellington view mostly is that he won’t get there. In the provinces they’re not so sure.

John Key has a luxurious arrangement this term. If ACT doesn’t like something, the Maori party almost certainly will. If the Maori party doesn’t like something, ACT almost certainly will. Both have strong reasons to play along.

But do the arithmetic. Take two seats off ACT, which is a generous allowance after the divisions of the past 18 months. Three for ACT and 58 for National is not a majority (62 needed in the present Parliament). Take two off National and the Maori party can’t get National over the line either. Peter Dunne would be pivotal.

Give New Zealand First six or seven seats and it would be a stretch for National to hold its loss to two seats. Peters would be in play.

In theory that might even give Phil Goff a chance, though, as in 1996 (when Peters corroded National) and again in 2005 (when he corroded Labour), that might be a cocktail Goff might have to pass up.

The underlying point here is not the vagaries of MMP. It is the liquefaction of political earth as a result of the global financial earthquake.

Canada: minority first-past-the-post governments for some years now; Britain a first-past-the-post minority government in circumstances which should have shooed the Tories in; Australia a preferential-electorate minority government which eight months earlier had been riding high; in the United States sitting Republicans shunted by upstart Tea Partiers and the equivalent of a minority Democrat government as a result.

These are not coincidences. We are not just going through a recession and recovery, all going along according to the econometric models. We are going through what Philip Stephens of the Financial Times last week called a “swerve” of history. After such a swerve things don’t go back to the way they were.

These swerves — or shocks — are part of human social evolution. Society is a complex organism and sometimes what looks like a small event — like shooting the Archduke Ferdinand of Austria in 1914 — can trigger a cascade of chaotic changes. In 1914 a short campaign turned into a war-to-end-all-wars, like no war before, and the end of four centuries-old empires and fatal weakening of a fifth.

So the cascade from the 2007-08 financial crisis keeps tumbling in unexpected ways and perplexed authorities try old fixes which don’t work. Two years ago Ireland was rich. Now it is broke. Two years ago mainstream economists were confidently predicting “recovery” in 2009. Now they stare at recalcitrant numbers and some demand the budget be balanced as the only way back to prosperity while others insist it be loosened much more to make jobs.

Two years ago China was polite in the company of the wise men (and woman) of the big rich world. Now China flexes its nationalist muscles and lectures western profligates. And citizens of the world’s most powerful, but now most frightened, nation humiliate themselves in airport x-ray exposures in fear of mad jihadists doing the devil’s work.

Two years ago the solution to the world’s huge and unstable imbalances was simple: get China’s exchange rate up or whack tariffs on. Now if that happened Apple’s profits would plummet. It is a world of mind-boggling complex interconnections: pull one string and consequences tumble round the globe.

Two years ago the idea that China would buy big blocks of farmland here was just a forecast. Now a government here has scrambled to assert tattered national sovereignty to stop the sale and the opposition party that opened this economy up to the world puts up the not-for-sale notice.

That is the world Key and Goff have to navigate en route to this year’s election. It is a world in which certainties of policy are a chimera but they must appear certain. For Key the best certainties will be in a firm budget. For Goff they will be in succouring the “squeezed middle”.

They will be helped by a hope among most voters that the old normal can be recovered with a flick or two of the policy whip. After all, it seems much the same — and is. The Christmas carols sounded just the same and we ate (most of us) too much.

But there are cracks in the walls and across the driveway and the chimney has gone and a couple of streets over they still have to use toilets out in the street.

Into this changed world steps an unchanged Peters, all his unspecific certainties at the ready. And if he musses up the numbers in the election that will be in tune with the times.

* This column will return on 25 January.