Public interest - and the shape of the internet

If you believe everything you read the newspapers the stoush between Australia and Facebook over the right to link to media sites for free is about the evil US corporation crushing investigative journalism while promoting right wing hate crimes.

Which is why nobody should believe everything they read in newspapers. 

In fact this is a battle between two equally dreadful right wing corporations: News Corp and Facebook.  Why did Australia of all nations take this stance? Because the Australian Liberal party is terrified of its home grown media. News Corp, which was revealed to have a inappropriate grip on UK politics after the News International scandal, grew up in Australia, and what Australian government investigation into its influence has been made in that country is not pretty. So the fact that the Australian government has come out on the side of traditional media should be read less as a matter of strong principle and more as a matter of deep cynicism.

The problem of media, both social and traditional, is it relies on large near monopolistic corporations. These organisations are quick to wrap themselves in the flag of democracy but actually only serve their own commercial interests. 

Perversely the only organisations that truly care about democracy are governments themselves. In many democracies it is state owned news agencies acting independently of politics which undertake the investigation s which keep democracy's wheels lubricated and turning. 

Of course the problem with this is that most state owned news agencies are starved of resources by their political masters mistrustful of their ability to cause political havoc. In the worst case this leads to increasing levels of intervention ultimately leading the state owned broadcaster to become a propaganda agency.

Scuttling around the feet of these dinosaurs are the small mammals of independent journalists. Small companies or partnerships with tiny audiences producing special interest investigations or news sites living from sponsorship to sponsorship. These organisations tend to rely on both state owned and social media organisations to obtain what audiences they can reach.

The difference between these organisations and traditional media (from which they have usually spun off), is they don't expect someone to simply pay them for existing, the way many in traditional media do. But at the same time they cannot afford to invest time in boring journal of record work that traditional media (and politicians) have operated around.

Personally I have very little time for the notion of the government as a safeguard of yesteryear's corporations whether they drape themselves in democratic colours or the self interest of cynical politicians.  I don't see any merit in newspaper barons over social media barons with respect to democracy.

To my mind the role of government here is to create property rights which fit the criteria of natural justice and provide the social education facilities necessary for the structure of government polity to function.

Because what many internet community corporations are doing is gaining a free ride on the contributions of their users. Without users communities like auction sites, social sites and similar are simply empty shells. There are plenty of alternatives to Facebook which have the same technology but no users and are basically desert islands.

So who should own the content? I, like others, say the users. But more to the point they should own it in an industry standard format. Standards empower users to switch platforms as easily as changing any other supplier. So that the data node is owned by the user and they can plug into different service providers as they see fit. Some of these are international corporations but some are state run. 

This means that each digital citizen is in control of their own authentication, their own identity, their own data and their own subscriptions. We have domain name registrars, why not internet user registrars?  There is no reason a person should not have multiple digital registrations or identities (people may not want their daytime and nighttime identities to be the same, for example) - this is not a call for a Chinese style digital monitoring system. But having registered an identity a real or legal person and payment account will still be responsible for it. 

The benefit of this is your posts, pictures, reviews, ratings, become yours to move from platform to platform. In addition users could place prices on their content so that if they share a popular video each viewer pays them a fraction of a cent to view it. The platforms would extract a transaction price for the charge. Platforms could innovate but standardisation would inexorably follow preventing monopolies.

Where do traditional media corporations fit in this world? Obviously as legal persons. The only difficulty will be the relationship between paid content providers and private persons in their own capacity. 

This is part of the issue. The other part is the education of citizens to deal with this digital world. To my mind this is clearly the role of government. It means equipping citizens to deal with the legal, ethicaltechnical and commercial aspects of this world, preferably before they start thrashing around in it. That is quite young, in my experience, but there is no doubt that this is where traditional education needs to head anyway if it is to maintain any semblance of connectedness to the actual world it holds. And of course because the digital world moves so fast this educational facility must also be available to adults as well. 

I confess this is idealism. It's not that this hasn't been tried. Jimmy Wales tried Wt.Social which frankly did not take off. The Auth0 offering is up against powerful corporates like Facebook and AWS. Up against a well funded, profit motivated corporation it is hard to create competitive open standards. Just ask Tim Berners-Lee or Linus Thorvalds.  So while I think what would be just is clear, I think what will happen will not be. What will actually happen is an unholy political mashup that favours politicians, corporations and vested interests. Just as political revolution flowed when the gun democratised force, a digital revolution would require equality of access to information technology. And I don't see that happening any time soon.

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Time to rethink the Reserve Bank

Slowly and with questionable competence the Labour Party is incoherently patching together a policy platform aimed at restoring the employment of New Zealanders to the central mission of the New Zealand government. It is, I confess, the reason I voted for the party at the last election in November 2016.

After nine years of National in power it was obvious to me, and I think to many other swing voters, that the policy of unfettered immigration National had inherited from Labour and accelerated, was eroding wages, inflating property prices and essentially turning New Zealand into a land of exploiters.

But the problem for Labour, it seems to me, is that the measures of government, and in particular inflation and Gross Domestic Product, have been so captured by international capitalism that making change in New Zealand will instantly bring us into conflict with the way international markets work.

In New Zealand inflation is the only target of the Reserve Bank. It's target is to keep inflation in a range between one and three percent. If inflation goes above three percent in theory it should begin contracting the money supply by increasing the interbank lending rate. If inflation is below one percent it should loosen money supply by reducing that rate. So the cost of borrowing money very much depends on the definition of inflation.

The main measure of inflation is the consumers price index. This measures the cost of goods and services in New Zealand by monitoring prices over a "basket" of goodies each weighted by their bearing on their proportion of annual trade each year. Interestingly these traded commodities do not directly include capital items such as houses.

While Statistics New Zealand is to be commended for this research, ultimately, in my opinion the effort is largely misguided. This is because the focus on traded commodities in the market has little bearing on the demand for, or supply of, money in the New Zealand economy.

The commodity market is largely driven by six things:
1) The cost of energy - notably petrol and diesel
2) The cost of production (technology)
3) International prices for commodities
4) The effect of local weather (e.g a bad harvest).
5) The cost of wages and salaries
6) Land costs

These divide into two main categories: ephemeral passing price changes, and deeper structural price changes. Energy costs have by far the highest bearing on daily prices at the margin but these, like weather effects, are ephemeral, changing with global geopolitics, and the Reserve Bank, typically, "sees through" (ignores) them. Technology generally reduces costs, although changes in technology can mean that redundant technologies in the CPI basket (like film development) rise before they are excluded. Because New Zealand has no subsidies and minimal tariffs international commodity prices are always going to be reflected in local prices fairly quickly.

However none of these costs really change the overall demand for money as such. All they really change is the way the money there is already in the economy is allocated. For example if petrol costs go up, demand for coffee or chocolate biscuits goes down.

But wages and salaries are much more complicated. Every week a huge amount of money is paid out by employers and by the end of the week, for many, it has been spent on all the needs people have. Wages and salaries are basically the demand for money to sustain a certain lifestyle. That is, the ability to buy food, shelter, clothes, energy, durable goods and information.

Wages in New Zealand averaged just under $20 per hour in 2003 when our population was four million, and now averages $32 per hour as it approaches five million. With a labour force participation rate of 65% (2004) to 69% (2018) and an average of 1,761 hours per year it is trivial to calculate that the demand for money from wage and salary earners has increased from around $84 billion per year to about $192 billion a year over the past twenty years.

Not surprisingly these totals are a very large percentage of the so called gross domestic product of New Zealand. That is the total amount of money traded each year in the economy. Why? People gotta eat, and stay warm and dry and they spend most of their money each week on basically doing that. If one looks at the economy largely in terms of wage and salary inflation then, one can only agree with the Reserve Bank that there is very little change and so-called "inflation" has been negligible. While what we buy has changed (goodbye Sky, hello Netflix) gaining 80c per hour per year has hardly been a spectacular improvement.

But my contention is that this definition of inflation (which is internationally accepted) is because international capital is deliberately blind to capital inflation and excludes it from such statistics.

If house prices increase ten percent compound in Auckland for twenty years (as they did) that is not "inflation".  Inflation isn't when you need twice as much money to buy the things you (collectively) already own every seven years. No, that isn't inflation at all! Inflation is when wages and salaries go up. Over the past twenty years New Zealand's market value of housing stock has climbed five fold to around $1.1 trillion [ https://www.rbnz.govt.nz/statistics/key-graphs/key-graph-house-price-values]. The same house that had a market value of $120K in 2000 is now valued at $600k. The total requirement for New Zealand dollars to effect land transactions has climbed from two and half times the total amount of amount of wages and salaries traded each year to around six times the total amount of wages and salaries traded.  At the same time the total amount of debt held by New Zealand households has increased from $56 billion to $258 billion all of which generates vast profits for the mostly Australian banks that dominate our mortgage lending market.

A large part of why this has happened has been the deliberate disconnection between the wages and salary market and the land market. When only those participating in the wages and salary market are able to fund the land market there is a natural connection between the two. But when this link is severed ( or"liberalised" like that's a good thing) anyone in the world with a spare million dollars discovers they can make ten per cent per annum real from the Auckland housing market and there is no capital gains tax then not surprisingly they start buying.

The entry of a significant number of well heeled buyers means that prices begin to be pushed at the margin and before you know it you have a self fulfilling prophecy. Before long local buyers are joining the stampede and you have a bubble. And the problem with land is they stopped making more of it. For this reason it is considered by the international banking system to be the best collateral for lending there is. That means you can borrow more against land price inflation than you can wages and salary inflation. In theory, so long as you have increasing equity in your collateral and can service the interest out of wages and salaries it doesn't matter. But, of course, you can only service interest so long as interest rates remain low and interest rates can only remain low so long as wages and salary growth remains low.

But that means today the Reserve Bank is painted into a corner. If wage and salary "inflation" goes up so must interest rates and then the whole country discovers it can't afford to service its huge mortgages leading to defaults, price falls and negative equity the whole inflated system would collapse. In short thanks to the willful blindness of capitalism New Zealand is locked into a highly leveraged economy with a gun against its head. Either we play ball or all hell breaks loose.

How do we play ball? We need to keep wages and salary "inflation" low. How do we that? We hinder collective bargaining or enforcement of employment rights and import people in very large numbers. Our population reached three million in the early seventies. It reached four million in the early 2000s, and will hit five million this year. Our immigration rules are now so slack that foreign call girls can call themselves "Skilled Migrants" (though what skills they have over any local I don't know) and the average salary of employed Skilled Migrants is less than the average for New Zealanders as a whole.

We have so called "students" from India and China who don't study much except personal experiences of near slave labour; and an "investor" only has to have enough money to buy a house in Auckland, rather than actually invest in New Zealand businesses.

What this means is that farms and urban properties are now huge capital reserves which can be banked, or borrowed against. It creates a class of capital owners and a class of serfs. It means that achieving a return on capital especially on low margin commodities becomes increasingly difficult putting pressure both on sharemilkers or leaseholders and retailers alike. That in turn means demand for cheaper and cheaper labour until you end up with quasi legal migrants crammed into low cost housing trying to scrape a living from wages only a fraction of the so called "minimum" wage.

In other words most of the ills of New Zealand's society basically come from opening our housing market to global capital and adopting a capital centric rather than a human centric view of the world. It means higher housing costs, more exploitation of foreigners and locals, fewer opportunities for our young people, more stress and mental health problems and less egalitarianism. In short it means shittier lives for more people.

All of this might make sense. If New Zealand was developing the way Germany grew after the war, or Japan redeveloped or Singapore grew between the seventies and the present, by leveraging its capital into greater and greater investment and trading revenue it could be a generational sacrifice for long term wellbeing. But we aren't. We aren't borrowing on the house to make money. We are borrowing on the house to buy shiny imported things from foreigners. This is a recipe for disaster not development.

So what do we have to do?

First we have to recognise that global capitalism is not our friend and earning the praise of bankers is not winning. Global capitalism is run for the benefit of global capitalists not our people. This means re-establishing a more sensible relationship between wages and salaries in the domestic economy and land values. How do we do that? Given that it is a loaded gun pointed at our economy the answer is "with great care."

First we have to do what the government is doing. Quietly disconnect the money hose by restricting access to our land market to those who participate in the wage and salary market. Lots of other countries have already done this and there are plenty of proven ways to do this. Second we have to restrict access to the wage and salary market. This means reforming the immigration system completely - something the government has barely even scratched the surface of. It doesn't mean no immigration, it means a much more considered and sensible immigration system. One that isn't there to be gamed by former immigration Ministers turned consultants.

Third, it means big changes to local government funding, planning laws, incentives and management. This is already being looked at by the Productivity Commission, but it is very early days. Personally
I think we should centralise rates under IRD the way the Republic of Ireland did back in 1974 to achieve better compliance and efficiency. It won't stop local government stupidity (as Ireland demonstrates) but it should work better.

One Shibboleth of local government in dire need of reform is the Resource Management Act 1992. Originally conceived as a means to maintain sustainable development of wide open spaces it has made decisive and low cost development of urban areas and provincial towns unnecessarily expensive. Throughout local government there is a surfeit of planning documents and legal obligations, a dearth of skilled officers and very little common sense. Where other nations have waged war on "Red Tape" New Zealand has turned it into a form of civic decoration. Without a more responsive and better incentivised local government system construction of housing and infrastructure will remain unnecessarily expensive.

Fourth, we need to look closely at the way our building consent system works. While New Zealand wins plaudits from international agencies on its lack of graft there are very murky corners of building and construction industry where New Zealand standards seem to be largely written to benefit local incumbents. Yes, it is true that New Zealand's combinations of seismic risk, high winds and high UV-B radiation make for unusual specifications it still appears that there are potential building solutions available in other nations which are not easily deployed in this country. Reducing these barriers would go a long way towards reducing the costs of increasing the housing stock at the margin.

Fifth, and most important, the connection between immigration and politics must be severed completely. This includes land purchases, political donations by realtors, and political donations by non citizens. There is too much scope for 'changing settings" in such a way as to expand the market and open the money hose spigot again.

Will a capital gains tax help? In my view it will help a little but it is no magic bullet. Other nations have capital gains taxes and they only smooth out bubbles, they have never prevented one. It can combat land banking when land is left effectively unused to simply collect capital gains. Personally I think a stamp duty (a sales tax on land sales) is a much simpler way to cure speculation.

Will all of this make us poorer?

In terms of straight capital definitely yes. In terms of human capital it depends on what else we do. What the New Zealand land stampede has done has put New Zealand on investors radar. Instead of simply closing the door and ignoring that interest we could revive the Development Finance Corporation concept which was started by Robert Muldoon in the 1970s. The DFC was a New Zealand owned merchant bank, much as Kiwibank is a New Zealand owned retail bank. A victim of the Rogergnomes and global capital it was actually a useful investor in New Zealand human capital, seed funding, and mezzanine funding a number of prominent businesses and certainly a lot more effective, efficient, transparent and prudent than giving Minister Shane Jones (Matua no less) a billion dollars a year to play Santa Claus (or is that Tony Sopprano) with.

Some may accuse me of wishing to return New Zealand to the 1960s. Certainly New Zealand in the 60s was a far more egalitarian, wealthy and happy place than it is now. But it was also stiflingly restricted, small minded, and dull. The revolution of the 1980s was culturally important for its renunciation of the overbearing paternalist state and that was not a bad thing.

But in a world where unfettered tax avoiding global capitalism is threatening to turn people into serfs pending their complete replacement with automation I believe it is time for the State to once again reassert the importance of the collective best interests of its citizens and tax payers. If this doesn't happen I fear a future of corporate feudalism which I suspect will make 1984 look rather tame.It is time for citizens to recognise that the financial institutions they have grown accustomed to are not necessarily acting in their best interest and need to be reevaluated, even if this may attract the derogation of those who would prefer to continue to exploit us.

To that end I think we need to look very closely at the way our monetary policy is managed. If it is only managed for the benefit of capital it is inevitable that we will become the kind of capitalist society like the US, like Russia, like the Philippines, I don't remember voting on becoming.

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Aunty Cindy, whiteness, and the future of democracy

I had long grumbled in private that the Labour Party needed to promote Jacinda Adern and Calvin Davis to leadership positions so when they did I was not in the slightest surprised that Labour's polling leaped into contention. Nor was I the slightest bit surprised when Winston Peters preferred Labour over National for a coalition partner. It was obvious his influence would be sidelined in a National led coalition and that a less stable partner would allow him more scope.

What has surprised me has been is that the Greens, whom Jacinda burned badly at election time, have crept back into positions of influence and appear, despite their electoral drubbing, to believe that they have a mandate to push their ideology. Equally I have been surprised that Simon Bridges, the new National leader, who seemed to be nothing more than a John Key lackey, has actually done a very good job in rallying the largest party in the Parliament and has already begun landing telling blows on the government.

So far Jacinda's response to this has been to double-down on her cult of freshness. She has done the Women's magazines and toured the world charming the socks off world leaders. Because she is as bright as she is astute and attractive Jacinda is an ambassador most Kiwis are probably quite comfortable to have representing them - baby bump and all.

The problem is back home where Jacinda's stodgy and far less talented colleagues are starting to inhale the heady fumes of power and already a level of plain amateurism is becoming apparent to the mandarins in Wellington.

The Minister of Broadcasting, Clare Curran's secret dealings with a Radio NZ staffer, and her blundering attempt to gag Radio NZ's Chair, Richard Griffin, revealed an appalling ignorance of her role and responsibilities. Curran acted like a power tripping school bully and was rightly skewered by the very sharp Melissa Lee giving Bridge's National Party early, easy new political points.

Next out of the gate has been Phil Twyford's policy statement on transport, a document which he appears to have cooked up with Jacinda's friend and parliament's other mum-to-be Greens Minister Julie-Anne Genter.

The big news for talk back radio was a series of petrol tax increases totaling twenty cents a litre in Auckland. This from a party which on the hustings had claimed it would not introduce new taxes - admittedly in the context of a discussion about capital gains. This was easy meat for right wing shock jocks and not surprisingly the Labour Party has already taken a major hit in the polls.

But the real story buried in the multi-billion dollar transport policy statement is far more significant than the average Gallery hack will ever turn into a three minute video segment. Transport is not just traffic congestion and pot-holes. Transport is New Zealand's whole society, and economy in action. All life involves motion - that means transport. What this transport policy is trying to do is re-align this to an ideology most of the country does not actually share.

Because Twyford and Genter are strong advocates of central government planning. They believe that people are driven by government policy. They believe that people make the transport choices they do because the Tories have brainwashed society by offering cheap petrol, easy access to motor vehicles and a market led, dog-eat-dog world, as opposed to a caring sort of University campus world where people walk, cycle and use public transport, live close to where they work and diligently avoid emitting carbon dioxide.

It isn't that Twyford or Genter are stupid, they most certainly are not. But they are very, very "white". Their ideal is a kind of Portland, Oregon in the South Pacific.Portland is famous for its walking and cycling and public transit and is extolled by left leaning, planning oriented Americans in transport conferences the world over. Of course Portland has also been trashed by right-leaning US media via the Portlandia TV show, where its political correctness has been lampooned to hell and back. But Portland does also have a less funny aspect to it. It's been designated the most racist city in America.

What is so "white" about Twyford and Genter is their willful blindness to things they don't want to see .What they don't see is people. What they don't mention in their policy, is inequality. All they see is urban space efficiency and emissions.

Taking half a billion dollars from highways all New Zealanders use to build a light rail system from the centre of Auckland to Auckland airport, and the Wellington airport to just short of Parliament is to build a service that only really helps people like them. People who live in Auckland and fly to Wellington and back a lot. Most people in New Zealand will not see any benefit from it. Working people who rely on fixing highways all around the country will see their incomes slashed by a third for the privilege.

The focus of their transport plans is mode change which pulls investment out of the regions and out of poor parts of the cities. The assumption is that poor people dependent on transport construction work in the regions can be employed building their light rail system in the cities. Census studies of Auckland clearly show that the places where public transport, walking and cycling are least useful to get to work is in the poor brown suburbs in the city's south. The plans assume the truck drivers they take off the road can find work on coastal ships. Its an assumption that life is the same regardless of class, gender, or ethnicity and that by optimising for one gender, class and ethnicity the system optimises for everyone. That is the essence of "whiteness".

Update: see also https://www.scientificamerican.com/article/the-unbearable-whiteness-of-climate-anxiety/

Labour has dumped on the poor before. The Lange-Douglas government effectively betrayed everything the Labour party stood for, sparking massive unemployment. Clark's government fell when the Greens led it into the wilderness of policies which were a bridge too far for the average Kiwi.It also gave up on innovation when it discovered Taranaki oil was pumping more money into the economy than start-ups, and immigration was a tidy little earner too. When John Key took over he simply turned both the oil and immigration spigots up to max and drowned out any problems anyone raised by yelling about a "rockstar" economy.

Adern has turned off both, What Aunty Cindy (as Jacinda's niece calls her) got right during the election was to home in on working people's concerns that the "rich seam" National's friends in real estate were mining (because of immigration) was driving up housing costs and driving down wages, making the rich (National's traditional supporters) richer and the poor poorer. This was another reason why Labour and New Zealand First fitted together so well. Jacinda was "change you can believe in".

But since the election it has seemed that Labour's varsity roots have led it back towards the Greens and away from the people who voted for them. The promise of change is off track. If this continues Labour will again collapse - not due to competition from National (which its bitchy policy hothouse seems to think is the root of its problems) but because it betrays those who turned out to vote for it last time.

The only way for Labour to win the 2020 election is to abandon the righteous 'white' varsity politics that the Simon Wilson's of the world espouse and embrace actual democracy. This means listening, not steamrolling plans through in an effort to appear decisive or to construct monuments for ribbon-cutting ceremonies. It means spending a lot more time and effort on understanding the complex dynamics of property, trade and labour markets in New Zealand and optimising them for people not policies or ideologies. It means not being embarrassed about Andrew Little's sensible but mocked (by National) efforts to understand the future of work. And it means pitching a social contract which puts people at its centre, not capital (as National did) or the environment ( as the Greens keep trying to do).

People-centric policy that recognises personal freedom to grow and innovate is a natural fit for Jacinda Adern's brand, and a natural fit with the work that Labour leaders like Andrew Little have pursued all their lives. But it must recognise that New Zealand society is a complex, constantly evolving and dynamic thing. No solution available now will necessarily still fit its purpose in 25 years time. It is about a deal, and our national values, not specific things.

If Labour fails to do this it will probably lose the next election. The questionable competence of some of its Ministers will be picked apart by a crowing National Party. It's more dubious arrangements (such as Shane Jones' billion dollar slush fund for regional enthusiasms) will probably
become a massive embarrassment.  Aunty Cindy and her baby will not have enough the cuteness appeal to overcome this apparent incompetence.

To my mind unless we gain a people-focused social contract we will end up with a capital focused social contract like the one ripping apart the United States right now. Watching the US - a nation that was once the heart of constitutional democracies - plunging into the black hole of techno corruption
should be enough to scare any politician to take evasive action.

The only question is whether Aunty Cindy has the wherewithall to emulate the tough pragmatism of leaders like Angela Merkel and put a people-first stamp on the entire coalition. It is a tall order and I must admit I doubt that even a media darling like Adern can pull it off.

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RNZAF joins military spending mania

According to Janes the RNZAF is kicking the tyres of the hugely expensive P-8A Poesidon as a replacement for the P-3K Orion. How much could that cost? Well don't expect much change from $1.5 billion.

To put that in perspective that's just shy of $1 for every $100 that changes hands every year in this country. It's a shit ton of money.
 
Along with the Navy's acquisition of a $500 million oil tanker I would argue that this shows that both the Navy and the Air Force are now keenly competing to waste as much taxpayer funding as they possibly can before someone works out that spending $20 billion on defence is an act of flagrant irresponsibility.

According to the National Assessments Bureau the greatest security risk to New Zealand comes from extremism. Extremism will almost certainly breed in conditions of poverty (as it does everywhere). Taking money from poor taxpayers to buy useless war toys can only make our security worse, not better. What New Zealand needs right now is better social housing, mental health services and police.

But what is a P-8A Poesidon anyway? Here's one here:

As you can see it's basically it's a Boeing 737-800 jetliner, which has been gutted and rejigged to be an anti submarine warfare (ASW) aircraft. It's the latest greatest technology which the US has built and the Australians bought into. They have a unit cost of $350 million each. Given that the sticker price on a new B737-800 is $137 million that shows that most of the cost of the aircraft is the weapons systems and radars.

So that will deal with our submarine problem then. Except that the Department of Prime Minister and Ministers of Cabinet National Assessments Bureau doesn't think there is a submarine problem. It certainly wasn't in the top six John Key spoke of in 2015. In fact even the Defence White Paper admits there isn't really a submarine problem. Why? Because since the demise of the Soviet Union we are out of range of almost every potential hostile submarine in the world.

So why do we need to spend $1.5 billion on ASW aircraft? The answer is quite simple. We have a squadron of ASW specialists and if they don't get new aircraft, what are they going to fly? Duh! This is what the New Zealand Defence Force calls logic. The rest of us call it empire maintenance.

Beause if we were to emulate Norway or Ireland and suddenly get all rational and European about it we wouldn't have a Navy or an Air Force. Why? Because navies are for fighting other navies and air forces are for fighting other air forces. The people who do fisheries patrol and search and rescue are called the Coast Guard.

You see Coast Guard vessels and aircraft aren't built for combat. They don't have to contend with the latest stealthy anti shipping or anti aircraft missiles. They just have to contend with criminals, and typically they don't get access to that kind of hardware. That makes a huge difference when you are outfitting your ships and aircraft. A cost difference.

So if we aren't actually going to hunt submarines any more, and our defence cooperation obligations largely come down to sending the SAS, then how about this. How about we don't buy a fleet of 737s armed to the teeth? How about we do this instead:

1. Use Rocketlabs to launch our own low earth satellites for surveillance and signals
2. Buy very long range UAVs that can fly for a week at a time for surveillance
3. Buy new transport aircraft and use them for SAR intervention.

It's cheaper, it's better, and it uses our own industry more leaving money in the kitty for the real things that matter for both society and defence. Stopping the conditions that lead to extremism.

For more detail visit www.defencecosts.nz

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John's gone, but the left still don't get it.

The resignation of New Zealand Prime Minister John Key has been greeted on the left as if the wicked witch of the west suddenly saw the error of her ways and disappeared in a puff of green smoke. The sneering and the sarcasm has reached a crescendo of vituperativeness reflecting the perceived role of John Key as chief Satan of the right wing. Now, perhaps, the left imagines it has a chance to assemble its rag tag opposition and strike back at the evil empire.

Let me suggest that that is because the left has become profoundly stupid.

Not only that, the left’s hatred of John Key is because he represents everything they are not. In a word – effective.

Don’t hide! Don’t imagine I am such National stooge here to sing the government’s praises. I’m not. The National government has extended and continued Helen Clark’s unwitting legacy of smashing the working classes by undermining wages and subsidising petty property capitalism to an appalling degree. The National government has presided over policies of rampant hypocrisy in order to subsidise farmers (e.g OSH and the ETS), and it’s management of the earthquake disasters has been bumbling, protracted and inept. The National government has plans to waste a sixth of this nation’s annual GDP on defence over the next twenty years, and it’s notions of industrial development are simply archaic, compared to our competitor nations.

But the left are so distracted by bitchery and political correctness that they have done nothing, I repeat nothing, to counter the impression that National are ‘a safe pair of hands’.

Let’s start with the most obvious issue confronting New Zealand: unaffordable property prices. What would labour or the greens do to change that? No, don’t look it up. If they were doing their jobs you would know, right now. What, apart from bluster, apart from flip-flop on capital gains taxes, specifically will the left do? Don’t know? Neither do I.

OK, what about immigration? Right now there are Indian “students” and Vanuatuan fruit pickers working in New Zealand because, according to business, “New Zealanders don’t want to work”.  What they really mean is New Zealanders don’t want to be worked in shoddy, and often unsafe conditions and be paid (if they are paid) less than the minimum wage. Immigration is the antidote to wage-price inflation the world over. So what is the left saying about this? Answer: not much because it doesn’t want to appear racist.

The only reason New Zealand does not follow suit with America and Britain in plumbing the depths of backlash is that the left has abandoned the working classes – just as it has in Britain – and there isn’t a party of the poor willing to articulate a position that resonates with the experience of poor New Zealand who would happily take wage inflation over property price inflation any day.

Instead the left’s strategy has been to attack John Key.

But while the Key government has presided over a slow moving avalanche of inequality it has also been very effective. Over the next few years billions of dollars worth of infrastructure projects will come on stream transforming our main cities. Pointy headed left wing fringe dwellers may think this is a terrible thing but the average family will simply like new stuff that makes their cities work better. The Key government has also presided over huge investment in schools, including new buildings, new broadband internet and improvements to the NCEA process which now means that 83.3% of eighteen year olds have level two NCEA qualifications thanks to better integration of trades training into the secondary school system.

Bill English has been leading a programme of big data development to reduce recidivism and crime because the benefit cost ratio of preventing children growing into criminals is enormous. Rather than treat the symptoms with armies of corrupt social workers (the recent findings of Judge Caroline Henwood, suggest a lot of children in care were abused) who profit from a fat welfare system their approach is to target much more resource at the most problematic people. Slowly but carefully the Key government has kept the economy growing while slowing reducing the debts that followed the global financial crisis, by partially selling state assets rather than fully privatising them.

Because what the left has failed to see is that the Key trick is to close down its platforms. Take gender pay inequality. Potentially it’s a goldmine for the left. Unions have taken cases to the highest courts in the land and won. A campaign for pay equality would be an easy win for stretched single female and two person households to boost their incomes but the opportunity will not arise. Why not? Because the Key government has taken it over. Expect them to water it down but make an announcement that enables them to claim the achievement that properly belongs to the Unions.

Every time the left finds a platform the Key government has snatches it from under them.

This is because the Nats are an effective political machine. The left aren’t. Key and deputy Bill English have openly talked about the day they are either kicked out by the electorate and they have been building a deep bench of experience to replace themselves. By contrast when Clark left power nearly all Labour’s experience left with her. The same is true of the greens who struggle to rise above the level of nutty amateurs. The result is factionalism and loss of coherence. The left don’t look like a government in waiting. They look like one red faced man shouting a lot, half the time at his own side to get into line.

Because the left has had such leadership problems of its own they have imagined that their task is toppling National’s leader. Now that John Key has toppled himself they are going to find out how wrong they have been.

It’s not about a leader, it’s about a team. Come next November electors will have this choice. A coherent team of a government that has brought most of them a near doubling of their net worth, or a messy cacophony of voices including Andrew Little, the greens and Winston Peters who can’t even come up with a cohesive economic strategy let alone communicate it.

The left has nobody to blame for its lack of appeal but itself. Hopefully now it will forget about John Key and get its act together as it should have started to do two years ago.

 

 

 

 

 

 

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Divisive politics and electoral reform - lessons from a small pacific nation

On the 29th of August 1981, at the age of 20, I was arrested for disorderly conduct in a public place. I was not alone. I was one of many thousands of people (my brother and father included) protesting against apartheid and the visit of the South African rugby team (the Springboks).
The 1981 Springbok tour was a crucial turning point in New Zealand politics and the more I look at political events in the United States recently, the more I am reminded of it. I am reminded of why the kind of divisive politics that has taken hold in the United States will not be a feature in my own country. It's not because New Zealanders are in any way superior to Americans. It's just we've been there, done it and have implemented systems to prevent that sort of crap happening again.

The 1981 Springbok tour was a lot more than a series of games of New Zealand's obscure but fanatically followed national sport - rugby. It was a huge political confrontation which split families, friendships and political groupings all over the country. As issue: whether or not it was acceptable to play sport with apartheid South Africa. It not only split left and right but also raised New Zealand's own history of racism and colonialism. But looked at historically it was the beginning of the end for the divisive politics of the Prime Minister of the Day, Sir Robert Muldoon.

Muldoon was a small time accountant who's rise to political power was based on exploiting the then electoral system of New Zealand. Essentially the country was divided into electorates and each electorate voted for a Member of Parliament. The political party with the most Menbers of Parliament got to form a government. In theory there were checks and balances. The elected MPs could roll the party leader. The judiciary is independent, etc. But Muldoon was a wily politician and a vicious bully and with the help of "Rob's mob" he soon reduced New Zealand's parliamentary democracy to what some such as Sir Geoffrey Palmer termed an "elected dictatorship".
Not everyone was unhappy about that. "Rob's Mob" loved Muldoon's "down to earth" style, his pugnacious 'punch em in the mouth' temperament, and his conservative support for farmers, employers and businessmen. Just like the recent turnout for Donald Trump "Rob's Mob" were largely rural, less well educated, and fairly racist. They were pretty damn misogynistic and homophobic as hell (it was 1981). The biggest difference is that New Zealand's evangelistic movement has never been united or all that large.
Robert Muldoon's political economy was based on vast subsidies (quarter of the Govt budget in 1981) for the agricultural community (not clever in a nation whose main industry is agriculture and lacks a source of industrial income to fund the subsisidy). He also borrowed from the IMF (at their suggestion) to invest in energy projects speculating (with taxpayers funds) on the historically high price of oil.
Not surprisingly economists considered him an idiot. He combined protectionism, speculation and a growing level of border controls that made New Zealand not unlike Albania. When he froze all wages in order to ban inflation The Economist magazine in london referred to his political economy as "Muldoonery".
The 1981 Springbok tour was a perfect instrument for Muldoon. It was a reward for "Rob's Mob" and a way to create division and annoy the liberals. By the end in September it had become a "law and order issue" with riot squads, protesters literally becoming rioters, and light aircraft being used to disrupt the games. Muldoon was re-elected not long after with less than 40% of the popular vote and a razor thin parliamentry majority. The politics of division had worked but people were rapidly tiring of it.
By 1984 there was a sense of crisis. Getting rid of Muldoon had become the focus of politics. Muldoon even forestalled a putsch by his own party by going on TV the night before and appealling to Rob's Mob to keep him as leader. The national cabinet backed down.
While the Labour Party had chosen the glib and charismatic David Lange there was still a danger that the 1984 election would split on party lines and Muldoon would again cheat political death. It was only when businessman Robert Jones promoted the "New Zealand Party" to split the conservative vote that Muldoon finally fell. The Labour party triumphed, the New Zealand Party vanished (although its policies were taken up by labour) and National was smashed.
Yet the most important development of this period was a deep mistrust of the political system. The story of post Muldoon electoral reform is not one of noble political champions but a web of election promises which eventually forced politicians to act. see https://en.wikipedia.org/wiki/Electoral_reform_in_New_Zealand
The result was the mixed member proportional system similar to that in Germany. It was introduced by referendum and has been tested since by referendum.
As a result there cannot be the kind of elected dictatorship of the kind Robert Muldoon specialised in again. Small parties can and do form and have a reasonable chance of being elected. Every party must strive to gain the centre because without it a party or coalition has little hope of holding power, and no government has been elected with an overall majority in its own right.
New Zealand is the only English speaking country with an MMP political system. It has taken some time for both politicians and voters to get used to it and adapt it to our political culture. But the strength of the MMP system now means that, while political disagreement remains (as it does everywhere), the results of elections tends toward stable and rational political direction.
I cannot argue that MMP improves public political discourse, or any particular appreciation of the crucial matters facing New Zealand. It does not suddenly make New Zealanders individually any more politically intelligent or insightful. Electoral systems don't do that.
But because the electorate is fully represented the wisdom of the entire electorate is often quite remarkably successful at finding a good balance between stability and responsiveness.
The result is that, if the major political parties have offerings which are credible, participation can easily top 80% for the simple reason that every vote really does count.
Any country where electoral participation is under two thirds can only marginally call itself a democracy. At 58% (2016) the US is even less of a democracy than India (66%, 2014).
Without a proper system of representation voters become apathetic. They lose faith in the system and belief in the notion of democracy. The repeatedly vote for "change" and with each candidate that does not or cannot deliver change the less they take the system seriously. From a 'sacred duty' voting becomes a case of happily fucking up a fucked system.
Can the USA reform itself electorally? I have no idea. But if it doesn't begin the journey very soon I suggest the self proclaimed home of democracy will have no more right to that title than the People's Republic of China.

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While there is Murdoch.

So the US election is over and in theory at least 'the people have spoken'. Strangely the people have spoken in the one poll that matters very, very differently to the polls that preceded them. Just like Brexit.

At the moment everyone is crapping themselves about the Donald. But what if the Donald is actually only a symptom of a deeper malaise. A malaise that takes reality and twists it beyond all recognition. What if manufacturing consent has become conjuring mandates out of thin air. What if the problem is Rupert Murdoch?

Look at it this way. Murdoch wanted a Liberal victory in his native Australia in 2013. There was a Liberal victory in Australia in 2013. Against the rational economic interests of the UK Murdoch wanted Brexit. Brexit (despite all the polls saying to the contrary) was the result of the referendum. Murdoch switched to Trump in May 2016 and again, against all the polls, Trump wins.

If Rupert Murdoch wasn't the owner of a huge media empire, which was caught in Britain using hacking techniques in order to gain leverage over politicians (in addition to the considerable media power his outlets already have), one might think this was simply coincidence. But Murdoch's whole business is peddling influence. Who does he influence? Voters and politicians.

Murdoch is big in Australia, the UK and the United States. Murdoch is not big in Canada, Ireland or New Zealand. You may have noticed the Canadians elected Justin Trudeau of the centrist Liberal party in October 2015. But you may not have noticed that Ireland elected the progressive centrist Fine Gael in February 2016. New Zealand's National Party is nominally right centrist but libertarian parties on its right have not thrived. While elections in Canada, Ireland and New Zealand are robust contests they are largely free of the xenophobia, division and conquest that has accompanied recent Australian, British and US experience.

In 2013 (from Wikipedia)"News Corp papers were accused of supporting the campaign of the Australian Liberal government and influencing public opinion during the 2013 federal election. Following the announcement of the Liberal Party victory at the polls, Murdoch tweeted 'Aust. election public sick of public sector workers and phony welfare scroungers sucking life out of economy. Other nations to follow in time.'"

Fast forward to the US in 2016. Trump didn't need to buy media. He got given it for free. Certainly he spouted headlines that would have not looked out of place in the Sun. With aggressive, unfair, dishonorable and unrelenting sound bites Trump muscled his way into the channels that fed working America's fear and resentment.The two worked together hand in glove.

Has Murdoch done anything illegal? Nobody has proved he had any direct knowledge of the phone hacking scandal in the UK but he has certainly stood by those staff who did time for it. Proving anything against a billionaire media tycoon takes some doing. Silvio Berlusconi's sole conviction was for tax fraud - he got off underage sex on appeal and his alleged links to the mafia are mere footnotes. Berlusconi conveniently remained in Italy while Murdoch's empire spans three seperate jurisdictions.
But illegality isn't the issue. Like the big banks who largely bypassed accountability because they were too large and too important to be interrupted with boring matters like prudence and fiduciary duty, (and lacking any direct evidence) it isn't the letter of the law that I raise here.

The simple fact is that Murdoch doesn't just own media like Michael Bloomberg. Murdoch weilds power. He isn't frightened to be completely partisan in distorting the public space with savage unrelenting media attacks to suit his own political ends. Like Bloomberg, Murdoch is a politician but unlike Bloomberg he's not elected nor has he ever been accountable to anyone. Indeed his method is to make the politicians accountable to him.

Obviously becoming the proxy for the people is not a new idea. Lenin as leader of the Bolsheviks was the first to act in the name of the people but without accountability to them. But it is Adolf Hitler who delighted in bitter divisions and emnity who became the manipulator of the people through vicious language and appeal to basest instincts that Murdoch most resembles. Like Hitler, Murdoch spawns hatred and remains gleefully unaccountable for his actions.

As with the big banks the solution is obvious. The tendency toward monopoly that is innate to capitalism has been allowed to develop out of control. Where the banks have run away with the money supply media moguls like Murdoch have cornered the influence market. Like the big banks which have created an environment where intervention is almost impossible so too has Murdoch created a political niche that is almost unassailable.

Murdoch himself must die in the not so distant future. The man himself, while problematic, is not the issue. What matters is the systematic subversion of the public space he has been able to pursue. Unless this is structurally denied by new forms of regulation and democratic control the institutions of democracy will whither and die.

As in the 1930s I fear we live in an era where the idea of democracy must fight if it is to survive. If this is true let us, at least, be clear who democracy's most virulent enemies really are.

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Shame and Backlash: The rise of Brexit, Trump, and the AfD

The rise of right wing politics in the US and Britain has been greeted on the left with bewilderment, derision and despair. Left wing comedians have delighted in deriding the apparent hypocrisy, contradiction and ignorance of their foes while simultaneously reminding us that the right wing in the thirties did not look significantly different.
But while the left has been mocking this significant change in the political landscape it has been too insulated by it's own innate smugness to understand what it means. Yes, the connection between right wing values and working class fortunes has long been made, but that doesn't explain what the left is doing wrong, and why the left is actually the side with the problem.
In a word the problem is shame.
For the left shame is a key emotion. People who hate illegal migrants should be ashamed of their lack of empathy. People who burn down rainforests should be ashamed of destroying our children's future. People who mistreat workers should be ashamed of their bullying. People who are racist should be ashamed of their attitudes. People who are misogynistic should be ashamed of themselves. The boundaries of political correctness are high walls of shame.
Shaming is also a key part of the left's social control reinforcement mechanisms. In communist countries political weaknesses could be exploited by political shaming exercises. Once politically shamed an office holder was toast and their office was ripe for the picking. In the west shaming involves "hard hitting" documentaries but also comedy. The butt of left wing jokes is the person who brings shame on themselves. Pointing that out is just shooting fish in a barrel. It gets a laugh, it reinforces the core values.
What the right wing have done is thrown off shame.
It's not the first time they've done it either. The shame of poverty and defeat that followed World War One was a field of opportunity for the right in the Weimar years. While some wallowed in shame the Nazis rejected it. They were proud and anyone who didn't like it could be punched in the face.
Trump too rejects shame. He has shafted a lot of people in his business career. Is he ashamed? Fuck no. He's been appallingly misogynistic and his failure to distance himself from the KKK speaks volumes but is he ashamed? No, he isn't.
The Brexiteers (Johnson, Farage et al) similarly stood on a platform rejecting shame. Poor Syrians? Fair play with Europe? Fuck them! Let's make Britain great again! Subtext: "Let's make you great! We will take away your shame". The migrants in the UK who voted anti-immigration weren't really voting against their younger selves, they were voting against the fact that their lives were not as great as they expected them to be. The Brits who voted Brexit were voting against the shame they had been made to feel for being poorer, for the sense of self disappointment they secretly harboured.
The same goes in Germany with the AfD. Merkel says "Give us your poor, your huddled masses..." and the average Osti (Eastener) says fuck off. Like the Nazis before them they reject shame. Just as the Russia's Trump, Vladimir Zhirinovsky, already tried in Russia until Putin realised he could appropriate his political appeal by 'making Russia great again".
So here's the thing. Shame is not working for the left.
I'll say that again because it's a big deal: shame is not working for the left. Why not?
Because most of the people who could do with the kind of support the left is meant to bring are not alienated Bolsheviks. They are pissed off, certainly, but they don't see a conspiracy of nobles, millionaires and billionaires. It wasn't capitalism the Russian revolution fought, it was an entrenched monarchy which has almost vanished throughout the world (though ironically not in hardline communist nations). Most people know that many of today's billionaires didn't inherit their wealth. They fought for it themselves. That doesn't make poorer people feel better, though. It makes them feel worse. The system isn't against them, so it must be their own inadequacies that let them down. They are less alienated than they are ashamed.
Letting go of shame and shaming for the left is sort of like letting go of Catholicism. You think you've done it and then you find you haven't. It isn't about letting go of ideals of social justice, sustainability or anything else but it is about letting go of a form of communication about those things. It's about not shaming others. It's about accepting humanity and it's contradictory and even animalistic nature. It's about having a party not obeying the party. It's about a kinder, looser, more relaxed left wing who forgive each other the less than pristine parts of their hearts and minds. Who accept that, yeah, stock cars have a kind of grindhouse fun to them even if they aren't that great for the environment; that making good money honestly isn't a terrible thing; that males and females really are very different in terms of sexuality, social expectations of each other, and ways of operating etc etc.
It's basically about recognising the truth that Trump and others are bringing: that political correctness is a burden to ourselves and others which is ultimately failing it's own objectives. Accept that and the right wing backlash can be abated. Ignore it and it will only get worse.

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Brexit - why the media must be regulated

The British Brexit referendum outcome was an enormous shock to the rest of the world, and the people of New Zealand in particular. Nobody outside Britain could understand why a people who had a comparatively cushy economic position inside a vast trading bloc would leap out into the cold world beyond its borders simply because there were immigration problems.

Because Britain's migration situation is not that bad. She has a population of 64.8 million. Of this 8.4 million were not born in the UK. Of these 5 million were born beyond the EU, including the former Commonwealth. The other 3 million were born in the EU. So 1:8 were born outside the UK. The NZ figure is 1:4. Britain accepted 14.5k asylum seekers in 2014 (latest figures) or 2.2 for every 1000 residents. Conservative politicians said Britain was being 'soft' on immigration. NZ is often criticised for only taking 750 per year or 1.6 per 1000 residents. NZ is now raising the intake to 1,000 which is the same as Britain's 14.5k on a per capita basis. On the face of it the UKs immigration situation was a perfectly reasonable part of EU membership. The problem really was voters had no idea what that was worth.

From outside the EU it was much easier to see. When Britain effectively abandoned its last vestages of Empire (the Commonwealth) to join the EEC in 1972 the impact on that Commonwealth was serious.In New Zealand half our trade had been based around the imperial model of selling commodities to Britain which sold processed goods back to the commonwealth. We sold meat, dairy and wool, apples and pears. The British owned the meat processing plants, the wool scours and merchant fleets. In 1960 New Zealand was on the pigs back. It was said the Kiwi Prime Minister knew the names of all the unemployed people in the country. Then Britain announced it was joining the EEC.

When Britain retreated into Festung Europa in 1973 and started raising the tariff drawbridge a lot of countries were forced to adapt. Australia, Malaysia, South Africa also faced problems but like Canada, India and Hong Kong they had close, rich neighbours and scale on their side. New Zealand was one of the smallest and it was the most vulnerable. New Zealand's initial response was a kind of collective political self deception. We kept up production subsisidies for farmers we could not afford, we tried to invest in energy assuming a continuation of OPEC prices and a global oil shortage, we simply buried our heads in the sand and tried to pretend nothing had changed. By 1984 the level of government control in the economy to maintain this self deception had reached outrageous levels. It couldn't last, and it didn't.

Remarkably it was a leftist Labour government (ushered in by a rich property developer who split the conservative vote) which enacted a right wing reform agenda (very like the rich property developers' agenda). The pain was vicious. Subsidies were stripped from farmers. Tariffs ripped away from manufacturing. Companies died left right and centre. It was even worse when the October 1986 crash smashed the overheated and over-leveraged property market. Unemployment peaked at 10% in 1992. Many Kiwis left for Australia, or the UK. Among my friends only about half of those who left ever came back.

New Zealand is one of the least protected, least distorted economies in the world. Australia has huge protections in place for its farmers (mostly against New Zealand), the US, far from being the home of a market economy subsidises farming, and uses its military as a defacto industrial policy. Where in 1960 Britain was 53% of our exports and 43% of our imports today it is less than 3% of either. Indeed New Zealand is so diversified that "other" is one of our largest categories both in terms of our exports and in terms of where they go.

New Zealand's experience of being outside Europe gave us enormous experience at negotiating entry into large protected markets. Despite being outside Europe we have fifty years experience in gaining entry to it. We are very good at it. Unlike Australia we don't bluster, unlike the US we can't strong arm, we are small and relatively insignificant so we don't annoy people. We just patiently work with trade partners to find a useful political solution for all concerned.

Britain will now find itself outside Europe and in a far worse position. First it has kicked Europe where it hurts: European unity, and the architects of European quasi federalism are mad as hell. They can't allow Britain to get away with that or there will be no EU. The British speak of 'negotiating an exit', but they can't. Under European law a Member has two years to leave and Members cannot negotiate trade on their own with the EU. If they did there wouldn't be an EU trade bloc to negotiate with. So Britain will be left with basic WTO access to all their nearest neighbours.

Almost certainly if the article 50 jump is made Scotland will cede. The EU will be happy to welcome Scottish dissenters, and Irish ones too if it comes to that. Major British companies would doubtless relocate their headquarters in Edinburgh and slow start moving critical operations north. I suspect a lot of companies will find excuses to relocate within the two year time frame.

While England has always cosied up to the US the Americans have bigger fish to fry. They have the TPPA initiative (started by New Zealand) in the Pacific including Northern Asian nations like Japan, China and Korea to ratify. That is far more important to the USA than Britain. Then there is the European equivalent, the TPPI. This is the US's other major initiative. If England has hopped off the EU bus then its not included. The Americans have two major fronts and England simply isn't big enough.

What does that leave England? Of the white countries, weirdly enough Russia and the other members of the eastern bloc struggling outside the EU. If England was worried about an influx of Romanian gypsies it has now made itself less attractive than Romania. It's on par with Moldova and Byeloruss, and Russia. Even the Ukraine will be treated better by the EU.

England will also discover what Africa has had to deal with all these years. The natural trading partner for African nations is Europe, but because of French colonialism Africa suffers at the hands of the EUs Common Agricultural Policy. Africa should be rich. The only reason African nation's aren't is the collective racist policies of trade barriers by Europe.

But the most likely allies England will find are in South America and India. Watch for a diplomatic exit from the Malvinas/ Falklands islands in order to curry favour with Argentina. England will probably also make overtures to India and we are likely to see a kind of imperial reverse take over as India asserts more influence over England than vice versa. The Brexit voters may find the upshot is more Indians and Pakistanis running their nation than ever before.

What if the Brexit can be stopped? Many hopes are pinned to this ranging from legal challenges to the original referendum to petitions for a second referendum. It is probable, though that it will come down to a general election. The Conservative Party will go to the people seeking a Brexit mandate. The hope of remainers is that Jeremy Corbyn will be replaced and that the Labour Party will win the election with a mandate to remain. Realistically this, however is unlikely. First most of those who voted to leave are working class or living outside the cities that are doing OK. They feel threatened by European migration. Corbyn knows that to dedicate labour to remain will split the party and lose all the support he personally gained from the disenfranchised who rose up against the Party intelligentsia to elect him leader. Second the wealthy who knew what was good for them traditionally vote Conservative and don't want Brexit. They will be reluctant to vote Labour. In short the political machinery has short circuited and Brexit may be the only possible outcome.

But what, if anything, does this sorry mess teach the rest of the world?

What it should scream from the rooftops is that media ownership still matters. The Brexit campaign was not waged by Farage, Johnson and Grove (who like paid assassins have now all vanished from the political scene) but by the Daily Mail and the Sun. They were the ones exaggerating immigration issues and driving xenophobia. Why? Because under a British peerage system their influence was dominant. Under a EU federalist system it was diluted. The phone hacking scandal revealed only too clearly the unhealthy relationship between media barons and politicians and it is not over. The so called fourth estate of public discourse has become a fiefdom run by a few for their advantage. The same players are at work in the US with Rupert Murdoch endorsing Donald Trump's candidacy for US President.

The fact is media is not just a market for advertising. It is a means to shape attitudes, change public discourse and influence the political agenda. The fact that 17 million Britons were convinced to vote against their own best interests by a campaign of misinformation, ommission and outright deception largely led by unaccountable media owners should be proof enough that control of the means of public discourse is too dangerous to simply leave in the hands of market regulators.

For democracy to work the public must know what is going on. They need unbiased information and they need a full context. Organisations like Polifact and Snopes are important but they are not a sufficient counter to campaigns of misinformation and propaganda. While the state is itself a source of misinformation and political manipulation perversely state funded radio has often proved - in Britain and the US, and indeed New Zealand, to be the least politically influenced by external actors of all media.

As digital media diversifies there is a role for the state to both operate and regulate the media domain. This doesn't mean censorship but it does mean balance, and limits to control. Without this any nation runs the risk of following the example of a bread and circus plebescite which counters the best interest of the people themselves.

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Dear Mr Grocer get a fair deal for embodied carbon in Paris or don't agree to anything.

New Zealand's climate change Minister Tim Grocer is currently collecting input from New Zealanders on what he should take to the Paris climate change talks in December.
One thing we should appreciate is that at least the New Zealand government is not as appallingly cynical as many. There is not a New Zealand representative competing for space in the private jet park at the climate change talks unlike 140 other attendees. Like a good boy scout Mr Grocer will be catching a regular commercial flight.
But the fact is the circus at climate change talks has become frankly disgusting. Most of the attendees demonstrate more interest in politics and making money than they do in the global environment. Some are career hypocrites with business interests in promoting climate change policies, others are politicians who simply anticipate some very good French catering. Climate change politics has become a farce.
In Copenhagen the Zimbabwean contingent were basically there to go shopping and made little secret of the fact. Once again the Chinese (the world's second largest economy) and so-called "developing nations" like Singapore (which has the best Net International Investment Position in the world) treated the occassion as an opportunity to laugh at our boy scout earnestness while offering to do practically nothing. It is no wonder that the United States has scoffed at the whole thing. True green environmentalists decry the United States but fail to see that the real politik is not about saving the world but using this issue as a means for national advancement.
And Europe's holier than thou impression in the climate change stakes is pretty questionable too. It's much vaunted carbon market is based on "UN" offsets derived from paying Indians and Indonesians to say they have swapped some coal boiler for a natural gas one - even though nobody ever checks that savings were actually made. That's why the European market became increasingly questionable because the projects it was based on were corrupt.
As for the Kyoto Protocol scam it didn't take the US five minutes to see that the Protocol with its 1990 base year was essentially a giant European rort designed to see America spending real money on Russian "hot air" because the economies and emissions of the constituents of the former Soviet Union had dropped 50% when it dissolved in 1991. Why 1990 was chosen as opposed to 1992 when the Russian Federation was established? This was a political decision with no bearing on the climate at all.
Then there is the hystrionics of the climate negotiations themselves. Representatives from around the world get packed into a hall to negotiate deals in boiler room conditions. There's tears, there's sentimental speechifying and finally cheers when the exhausted representitives finally agree a text they can take back to their governments to be ... well usually ignored. It would be dramatic if it happened once, but it happens every COP and the results are simply terrible policy.
Consider the Kyoto Protocol. Under the Protocol if you are Saudi Arabia and you pump 9.9 million of barrels of oil per year from under the ground which will emit 4.2 million new tonnes of CO2 when burned (typically within that year) you are actually only responsible for only 0.46 million tonnes of CO2 produced by pumping, venting and flaring. But if you are New Zealand and you ship 30,000 tonnes of forest products (our third largest export) which have been recycled from the atmosphere over the past thirty years you are responsible for emitting the entire 15,000 tonnes of embodied carbon which is deemed released to the atmosphere even though much of it ends up as building products or paper. It isn't even remotely fair.
Why does that happen? Well it happens because embodied carbon is too hard to think about when you've been sleep deprived in a marathon negotiation session and hardly anyone worries about sustainable forestry nations like New Zealand (NZ forest products are from replanted plantations forest). So we get a shit deal because everyone else is too busy trying to suck up to Russia or Saudi Arabia or some other vast emitting nation. If you were completely logical about it Saudi Arabia would be obliged to pay for the sequestration of all it produced. The rest of the world would pay Saudi Arabia through oil prices and Saudi Arabia could buy the cheapest sequestration it could find. But it doesn't work that way because of politics.
And when it comes to politics we get screwed. Our climate change Ministers come home looking like they fought hard being all rueful and  hairy chested but actually in reality they just took most of the world up the arse. They then have the temerity to tell taxpayers that because they failed and the "international community" has set the rules against us we taxpayers have to suck it up and play by the rules. It must make the Singaporese who don't admit or concede anything wet themselves laughing for months. Our problem is our suck up representatives don't play hard ball like Singapore and demand a reasonable deal. They want to be the good little country willing to take their medicine for the good of the whole world. Like we're rich or something.
Because we aren't rich. We are a second world economy. Most of our international income comes from selling milk products, hospitality (tourism) and forestry. Our PPP adjusted GDP per capita is in the $32,000 range which is better than most but is definitely not in the $42,000+ territory of most first world nations, including Australia (who don't play climate change ball either). It is certainly well short of "developing" Singapore's $82,000 per person per year.
So my question is why don't we stick up for ourselves for a change, because worst case, if climate change comes along in a hundred years it won't be New Zealand that suffers one helluva lot. Because climate change is not the end of the world. The highest concentration of CO2 in the last 800,000 years is still within the history of human beings. Life on earth has coped with way way worse. Even 12,000 years ago we had some pretty exciting experiences with ice ages which shook things up in a way the modern world would find pretty hard to cope with.
As for warming usually the Earth copes by producing more clouds and growing more biomass while most species cope by migrating. The problem is we have this weird idea called land parcels which we "own" and we've based the whole monetary system on it. Economically what climate change is about is the loss of land values from coastal real estate. Cities like Singapore, Amsterdam, etc who will cease to exist if sea levels rise. New Zealand (like Russia) could even benefit from climate change in a way that Australia (fires), and a number of other nations really would not.
So if all the clever clogs in Australia and Singapore really can't be bothered doing anything to reduce their energy intensity why should our people show "moral leadership" other than to strut a bit at climate change talks? Kiwi can't eat moral superiority.
Of course for some people New Zealand should be the green angel of the world. It should be 100% sustainable with the lowest energy intensity etc. Most such people are vast hypocrites who rely on other people emitting so they can enjoy their chardonnay. They're Al Gore or Prince Charles types who say do as I say not as I do. Well, really that isn't possible.
New Zealand can't participate in the global economy and be the most remote nation on earth without needing a fairly high energy intensity. Sure, you can hide behind rules excluding international shipping and air travel but fundamentally that's dishonest. The fact is the dairy industry, tourism and forestry are all energy demanding industries. Ideally our forestry carbon sink would balance our agricultural methane emissions but realistically that depends on commodity prices and that depends on a whole bunch of things which have nothing to do with carbon.
And this is the problem with carbon in the real world. Because it is effectively a tax imposed by government, and because tax consistency around the world is impossible (because nations cheat), you can't expect the carbon market to ever be any more perfect than say the highly compromised global trade in agriculture which is full of rich nation farmers like the French and Americans shitting on poor farmers in other parts of the world.
So Mr Grocer when you come back from Paris looking all rueful and hairy chested after the histrionics of the climate change negotiations I suggest you don't try and tell us any bullshit about New Zealand leading the world, or being tough but reaching final agreement, or any of the usual blather. Tell us how we were screwed over again and what the Government is going to do to try and minimise the effect of the stupid compromise it agreed to on behalf of our population.
New Zealanders do care about climate change and the environment. We are proud our electricity is 80% renewable, our forests are a potential sink for Saudi's oil carbon and a potential source of biofuel as well. But none of it works if we are subsidising politicking backsliders who are bigger and richer than we are. We can't carry China. We can't carry Australia. We can't even carry Singapore.
If you can't bring back a fair deal don't bring back anything at all.
And a fair deal means a fair deal for embodied carbon. One that treats it exactly the same way as oil. New Zealand like Brazil, like Indonesia, like Malaysia can grow trees for the world and should be paid to grow trees for the world. Ultimately only sequestering CO2 in biomass can compensate for digging the stuff out of the ground and burning it in the first place. The price of carbon added to energy should be the marginal global cost of sequestering it. Growing states should be paid and extracting states should pay them. Swapping coal for gas should simply change how much you pay, not provide an offset. If we can't get a system which recognises this simple reality we are just boy scouts in a room full of shysters.

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Change the flag debate highlights left wing malaise

There appears to be a movement afoot in left wing circles to piss on the Prime Minister John Key's plan to change the New Zealand flag. The argument goes that the $26 million to be spent consulting the whole country could be better spent on child poverty.

To my mind this highlights everything that is wrong with the left wing in New Zealand. Namely:
1) It is driven by vitriol not anything constructive
2) It is petty given that $26 million would do very little to change child poverty
3) It is contradictory in that it supports a symbol of British imperialism which is antithetical to left wing values
4) There is no useful alternative.

Let's expand these specific criticisms to broader observations.

1. Vitriol
The entire left wing campaign during the last election was subverted by left wing and media fascination with the attacking the Minister in charge of the GCSB and SIS, the Prime Minister, John Key. The idea was that John was sending his spooks to spy on "ordinary New Zealanders". The fear and loathing was palpable.
And John Key was completely right. New Zealanders shrugged and wondered what all the fuss was about. What the fuss really was really about was that various left wing leaders have been spied on in the past and they were worried that any incumbant might use the power of military spy agencies to remain in power. But that wasn't communicated probably because it's a paranoid delusion, and everyone would recognise it as such. So they talked up "ordinary New Zealanders" who generally have very little of interest to spy agencies, and very little reciprocal interest in our nation's spies.
The effect of this paranoid hysteria was to completely alienate the electorate and Labour got the biggest drubbing in its history as a result. It was completely deserved. Labour had failed to communicate what it was for.
The only time Labour has won in the past has been it has been able to clearly communicate a decisive policy difference between itself and National. In 1984 it was (perversely) about liberalism over the National incumbent's outrageous state control. In 2001 it was about a vision of a creative, egalitarian, society over a divisive, privitised, and class dominated one. Vitriol is an ugly, and weak emotion. It doesn't inspire confidence. It anything it inspires dread for the vitriol poured on a common enemy today could be poured on one's own head tomorrow. 

2. Pettiness is about not only not being able to tell the difference between the big stuff and the small stuff, it's about actively favouring the small stuff over the big stuff. In the flag case $26 million is small stuff. By contrast the $3 billion per anum being spent on Defence is big stuff. Just to put that in perspective $3 billion is the same amount as spent on all state highway contruction and maintenance, half of all local road construction and maintenance, all public transport and all road policing. $26 million is slighty more than they spend on road safety ads. Right now the Ministry of Defence has a defence white paper out for consultation, looking at the future of the defence force that costs all this public money. Does the left have a view? No. It's the usual claptrap. Why? Because they have no vision.
Pettiness is putting big focus on small things for small reasons. Focus on John Key is pettiness. John Key grew up dirt poor, studied, screwed people over and fought tooth and nail to get rich, and then worked his butt off to become Prime Minister. He's been a prick. He's been a dickhead. He lies and he backstabs. Welcome to success! That's what it takes. The idea that anyone will be elevated to high office through their shiny halo and holy persona is ridiculous. But fixating on one person's negative traits is to completely miss those traits which have made him one of New Zealand's most successful Prime Ministers and it looks suspiciously like jealousy.
David Lange had the 1984 election won when he told Robert Muldoon that he respected Muldoon's abilities. It was a put down but it wasn't a petty one. We haven't seen that from the left for a long long long time.
The more the left focuses on small things the more it seems to everyone else the less it is focused on big things. That means the things that effect the electorate. That means pettiness will inevitably attract nobody.  What people want to see is a future where they will do better. They don't care about John Key, politics or anyone else.

3. Contradictory
The left quite often seems incapable of seeing the contradictions of its own policy positions. More often than not it adopts policies because they seem trendy rather than because they are helpful. This is where the effect of Green policy is at its most subversive.
The problem is that most left wing politicians fall into the Green target demographic. They are wealthy urban dwellers from well-off middle class homes. Huge numbers of labour followers are school teachers now into their late fifties who were hippies in the 70s. Greens do not target farmers or farm workers, or the urban poor for the simple reason they know instinctively that Green agricultural and industrial policies are often ill-thought out nonsense. Green voters are well-off urbanites whose incomes typically come from taxpayers or providing business services so abstracted from industry as to be on a different planet. The Green delusion is built on that inter-generational arrogance that parents are all thick and there are better ways of doing things. That and large amounts of hypocrisy (and don't imagine we haven't all been there). It is an ideal which suits idealists and those who rebel against their parents but rarely has any deep thought put into it.
At core the Green ideology is built on the German folk movement of the 1920s which was a Luddite reaction to industry. It holds that there was some kind of idyllic past time of peace and plenty when people worked the land in harmony with one another and nature. It envisages horse power, sail boats and planting cow horns by the light of the moon ( a requirement of biodynamic organic agriculture).
This has translated into a twenty first century "custodians of the earth" notion which holds that humankind has a duty to look after the planet. While there is nothing wrong with the concept of sustainability but there is a rather infantile notion embedded in some strains of popular environmentalism that humankind is at the centre of the cosmos and that our planet is weak and defenceless like a puppy. This is total crap but it results in policy based on sentimental notions of what would help the planet which can easily be manipulated by the cunning.
For example the Greens hate cars. They pretend they don't but really they do. They even hate electric cars. Cars are seen as the enemies of this idyl and the world would be so much better if everyone used bicycles and trains instead. Of course bicycles and trains work really well if you live in the city centre and your city was built around dray deliveries. But most cities these days are built around cars.
Cars carry babies, groceries, children, dogs, and other stuff without physical effort over long distances very quickly. They have liberated women like no other tool (it is no coincidence that the world's most patriachal nations won't let women drive). Cars expand the options of a worker seeking work. Cars provide freedom and they are massively popular demonstrated by the fact the global automotive industry is still growing.
The Greens hatred of cars means they propose "smart cities" which are built around (guess what) trains and bicycles. But to make that work they need to concentrate cities into apartments and rail networks. So "sprawl" is a dirty word and "smart cities" are "sustainable" and make up a million and one tedious arguments to justify that outcome.
This is where the manipulation comes in. Who owns the land those apartments are built on? In  most countries its a rich landlord. Does that landlord want competition from people owning their own land and building on it? Not really. The less competition the more they control prices. So suddenly rich landlords really like the Green ideal. Making them rich is "smart" and "sustainable".
But what about the workers? For many workers the best way to save is to pay a mortgage not a rent. That way they pay towards equity in an asset rather than simply meeting a cost. Even better the asset tends to appreciate. If they buy an apartment there is very little preventing a developer from building a new apartment next door and their asset can not only stop appreciating but start depreciating. Land on the other hand is always in demand as human populations grow. Therefore it is less risky to borrow in order to buy land, and there are international banking rules recognising this.
Now if you try and concentrate workers into "smart cities" eventually demand for housing will outstrip supply and prices will start rising. Then workers won't be able to buy land and save. And this is exactly what is happening in Auckland right now because the city itself has adopted a Green policy of restricting growth so it can become a "smart city".
The Greens support this because they are wealthy inner city dwellers or their children. It benefits them. Weirdly the National party which has more rich land owners in it opposes it and demands Auckland city should start releasing more land, which the city has refused to do. But Labour, who you would think would support poorer workers, supports the Greens and that makes no sense.
Poorer workers do not live in tenements and go to work in factories by tram or train anymore. Poorer workers work all over the city. They need mobility more than anyone. Check it out. Who rides $1000 bicycles to work? Rich mostly male office workers. Who takes the bus or train? Middle class office workers. Who drives a $1000 clapped out van or car? The poor. Which does Labour party policy help the most: themselves, the green demographic.
What's worse is that Labour party see this as the poor being out of touch! They regard a guy who works in a panel beaters (a terrifically polluting industry) and races cars at night (unsafe) as a troglodyte, not a potential member. 
Does this matter? Fuck yeah! It means the poor see their nominal representatives as shiny arsed sell outs who have no idea what they need. Labour might bump up their benefit a few bucks and pay for an army of welfare people to ask them about their needs but when it comes to creating more jobs, reducing costs and making their lives better they have no ideas.

4. No alternative vision
The Labour party has no vision. It's fiddling while the country builds. It can't decide what it stands for so at the moment all it stands for is pissing on John Key.
John Key is actually a good prime minister. He has a vision, he communicates it, he gets elected by huge margins. Labour should be better not bitter.
How could Labour be better? By not doing the three things above for a start. Then what it needs is the following:
1. A housing policy which is not captured by Green thinking and looks to expand supply.
2. A local government funding policy which works.
3. Changing the RMA so that it doesn't try to apply the same rules to pristine National park as everyone's backyard.
4. Changing the tax base away from GST to a capital transaction tax. GST is doomed anyway.
5. Reform the IRDs outrageously grasping role in split families and create a just system. This affects a lot of people.
6. Making the bureaucracy more intelligent and more targeted to need and not just larger and stupider.
7. Reform the tertiary education system which is a runaway paper producing nonsense industry doomed by global change.
8. Reform the primary and secondary education systems to create citizens not students.
9. Reducing business income tax and business income tax loopholes. It works.
10. Cut the defence force to a reasonable size, its ridiculous.
11.Transition the health system to an insurance based one like Canada or Germany. This improves health outcomes and provides investment capital that Government spending doesn't.
12. Tighten the rules on foreign land speculation in New Zealand and change welfare rules so that our policies mirror those of Australia.
That may seem like a loose bunch of ideas but to be blunt Roger Douglas's "There's Got to be a better way" (which everyone heard of and nobody read) wasn't much better and that at least started a debate.

Ultimately I personally don't care who runs New Zealand as long as they do it well. No market (including for politicians) works well when choices are constricted by poor quality. If the Labour party doesn't step up it will die. In a country of this size we need at least two reasonable alternatives. At the moment Labour has proved itself incapable. That doesn't leave any choice. For the country's sake the left needs to pull finger and get to work.

Oh, and change the flag. I like the one Rocket Labs uses. You can recognise it instantly whether its 10 pixels across or in a sea of flags or both. And that is what a flag is for, rallying to.

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