John Key take note: Kim Jong Il, whose dynasty has impoverished and starved his people, has been re-elected to North Korea’s legislative assembly with a 100 per cent vote. In a world that is in economic reverse, are the North Koreans on to something?
For two decades there has been anguish about our economy’s slide down the OECD wealth and output ladder. We are now in the bottom third of the 30-nation group. Miracle-economy Ireland, once a sick joke, roared past.
Next time we have a big economic up, we might ask just how up it is or whether we are just on a party drug. If it is a party drug, an accident is waiting to happen.
The Accident Compensation Corporation (ACC) has been building funds to cover future liabilities. Those funds performed very well in the “golden years” of soaring sharemarkets. And the economic party times encouraged the government to expand the scheme’s cover and instruct the ACC board to be “fairer”, in part to eliminate injustices and in part to be more generous.
Commonsense is a common casualty of theory and ideology — and of policy when theory and ideology get too big a run.
The world is in a banking pickle because some brilliant mathematicians parted some excited bankers from commonsense with a formula which purported to reduce risk to once-in-a-universe-lifetime levels, provided there was a diversified portfolio. Commonsense would have advised a scan of history: there had been three of the sorts of events which falsified the formula in the previous 80 years.
Two different bridges were under construction at the “job summit”. But where do they lead?
One bridge is a swingbridge, the sort boys used to learn in scouts. John Key has flung out guide ropes to where he thinks the other side is and is busily knotting up the V-shaped spacers which he hopes will steady our shaky passage across the valley of recession.
It is one of politics’ ironies: ACT has got itself into the ministry just as its credo comes under heavy assault.
ACT carries the neoliberal (or neoclassical) banner: lower taxes, less government, lighter regulation, a reverence for markets and a belief that almost invariably individual and private enterprise produces better results than collective enterprise.
Just out of his “100 days”, John Key is off to Australia tomorrow for the annual prime ministerial bilateral. There is much to do.
There is much to do at home, too — not least to develop policy options against the developing possibility of a depression. A “jobs summit” and bankrolling “icon” companies are short-term recession fixes. A depression is long-term and life-changing.
Wanganui Collegiate is not where you would normally go to find socialists. The offspring of the wealthy and snooty go there. But it seems it may have come time to socialise this very private college’s losses.
In the current economic climate, not enough people can, or wish to, afford to pay the fees for exclusivity — and, they would say, excellence — for their kids. The college has been exploring joining the state system.
Judith Collins has sharp teeth. This week they went deep into Corrections Department chief executive Barry Matthews because of the report on (mis)management of parolees (with not enough staff).
Tony Ryall has chomped on Otago District Health Board chair Richard Thomson and spat him out because he was the chair when a massive fraud was discovered (though he fixed it).
John Key last week rejected the Greens call for a three-year freeze on MPs’ salaries because the anecdotal evidence he is getting suggests the recession will not go beyond this year. So they settled on one year.
But were the Greens right? There is some reason to think they were.
Jobs are disappearing fast in the big rich economies. International trade slowed abruptly in the December quarter and is expected to contract through this year. And trade is jobs. The International Labour Organisation says 50 million could go worldwide by end-2009.
Tim Barnett, former Labour chief whip, has landed a big international job, combating AIDS, based in Cape Town. Helen Clark is pitching for chief of the United Nations Development Programme. That makes two points.
One is that many of our bright people do big jobs elsewhere. The other is that ours, for all its frequent small-village myopia, is a very internationalised society, inextricably wired into a world in which nations and peoples are increasingly interdependent.