Category Archives: Ending Neoliberalism

The Opportunities Party Campaign Launch – Gareth Morgan. 

New Zealand was founded on the idea of a fair deal, the concept that peoples from different backgrounds could come together and work out their differences without resorting to warfare and hatred.

The idea of that deal was to allow everyone in this country the opportunity to pursue their dreams.

That deal hasn’t always been honoured, but it is at the very core of what we as a nation are all about, fairness and opportunity.

This land of egalitarianism and opportunities has seen Kiwis achieve some remarkable things in the past century and a half….

A scientist from Nelson became the first person to split the atom

A beekeeper from Auckland conquered the highest mountain in the world

A girl from a tough background in Rotorua became the greatest opera diva of her generation

Writers, artists, sportspeople, thinkers, inventors people from every walk of life in New Zealand have proved time and time again that given the opportunity Kiwis can be the best in the world.

We have led the way in woman’s rights, social welfare, anti-nuclear activism and gay rights……..we have much to be proud of.

The opportunities that allowed us to do that were also based on the notion that each generation would pass on to the next a better country than they were born into.

A country with better education, healthcare and economic openings.

A country that was fairer, more egalitarian more civilised……in short, a country that offered ever greater opportunity.

But something has gone terribly wrong with that idea… the current generation…..the baby boomers ….. may be the first to leave behind a New Zealand of shrinking opportunities, less fairness and more inequality than they were born into.

We are in the process of flicking an intergenerational hospital pass to our children and grandchildren

We’re leaving them loaded with debt for their education, while we ask them to pay for our retirement.

We’re pricing them out of the housing market so we can make tax free capital gains.

We’re importing cheap unskilled labour to cut them out of entering the job market..and turning the country into a low wage, treadmill economy.

And when they don’t conquer the massive hurdles we put in their way we make them jump through hoops for welfare payments while calling them lazy dope heads.

We’re screwing the environment they will have to live in, by tolerating farming practices that degrade our waterways…..paying lip service only to the idea of climate change and the solutions needed to overcome or adapt to it, while pandering to industry sector groups without regard to the sustainability of their businesses.

We are criminalising and locking up ever growing numbers of men and women who don’t even get a chance in this shrinking world of opportunity, and we are standing by as the gap between the haves and the have nots widens.

You don’t need me to tell you how wrong all this is, you hear about it every day when you read our suicide statistics, homeless numbers, real estate ads, and crime stories.

And what is our political establishment doing…..pretty well nothing. Stuck in outdated left versus right political ideology with a tax & targeted welfare regime that is obsolete, they trade insults and argue at the margins as New Zealand, the land of opportunity, slips away.

They fight, not to restore the fairness of our society but to perpetuate their own political power in some vain belief that an ideology is what’s needed to get this country back on track.

Let’s be very clear TOP doesn’t care who leads the next government.

Those who campaign to change from blue to red or right to left are like a bunch of kids screaming “DAD’s burnt the dinner…let’s get the dog to cook”.

What New Zealand desperately needs are ideas to restore opportunities…..policies that aren’t designed to get a party into power but to fix the problems we have, reduce inequality, and take us forward into a world where our children again have more opportunity than we did.

If we don’t, we’ll end up with a select few owning million dollar houses in a ten-cent economy.

We know what those policies are.

Fair tax reform to close the 11 billion dollar property loophole, and deliver income tax cuts to every worker.

A UBI to end witch hunt welfare, underwrite human dignity, and ensure that when any of us are at our most vulnerable, our society is backing us.

Tenancy reform to give renters real rights so they can build secure homes without the mission Impossible of property ownership.

Real action on cleaning up our waterways, and having polluters pay, while encouraging best environmental practice from all industries.

A democracy reset to give us all clear constitutional rights, curb the power of cabinet and recognise the Treaty of Waitangi.

Real commitment to confront and deal with the challenges of climate change and make the country resilient to its inevitable assault.

A justice policy that wages war on prisons not prisoners

Education reform that recognises schools should lie at the centre of communities, and that the role of education is to prepare New Zealanders for a world of ever-increasing automation and diminishing income from mundane work.

And health policies that stop us literally killing ourselves, be it through suicide, or the ever increasing consumption of deadly foodstuffs.

None of these policies are rocket science, they are based on expert, evidence-based analysis of what New Zealand needs and can achieve with the resources we have available right now.

The only thing lacking has been a political establishment with the will to see, and courage to embrace the way forward.

We are all here today as part of the TOP movement to make a change……… not a change of government, but a real change of direction and focus…to make a real change in the lives of all New Zealanders to restore opportunities for future generations.

We’ve come a hell of a long way since November, thousands have put up their hands to join TOP, hundreds have volunteered, and we have awesome candidates standing across the country.

It hasn’t been easy – we’re the new kids on the block, so we don’t get the sort of coverage or funding the old establishment parties have access to.

But we have one huge advantage, we are free of the hatred of old tribal politics, we know what we stand for, and we can work with anyone who is genuinely prepared to implement policies that restore opportunities to New Zealanders.

I want to thank all of you for putting your hands up and having the courage to be part of a real change for good in New Zealand.

For having the courage to leave behind the class warfare and name-calling that has dominated politics for so long.

For having the brains to know that more of the same-old-same-old isn’t going to cut it for future generations

And most of all, believing that good ideas and genuine dialogue will beat self-interest and political game playing any day of the week.

We have already moved the policy debate in this country without a single vote being cast for TOP.

Acceptance of the need for cannabis reform is now widespread, our tenancy reforms have been lauded for their foresight, the UBI is now an accepted part of this country’s welfare debate.

But there is a long way to go.

I know we will be in Parliament after September the 23rd……just how much we can change the direction of this country will be up to voters.

You are the people that will help them make the right decision, to restore the values this country was founded on, and give equal and growing opportunities for everyone no matter what their gender, age, social status or ethnicity.

You can do that by sharing our ideas, reaching out to the good in every Kiwi’s heart, and making sure every New Zealander makes the decision to

CARE, THINK, VOTE and TICK TOP

The Opportunities Party

Housing Affordability, The Opportunities Party.

The Opportunities Party has a bold new plan to address the major problems confronting New Zealand, housing affordability.

While TOP’s ground-breaking Fair Tax System will stop residential properties being misused as tax free investment vehicles for the wealthy and suppress rampant house price inflation, TOP believes structural reform of the rental and social housing markets is also needed to solve the country’s most pressing social issue.

TOP will adopt a German type model to vastly improve the rights of private market tenants while demanding minimum standards for all homes and gifting current state housing stocks to non-profit social housing organisations.

The Opportunities Party intends to develop a deep market for long term rental accommodation so that families can be secure knowing that investing in home ownership is not the only way that security is achievable.

Party Founder and Leader Dr Gareth Morgan says, “Homes not Houses will alter the profile of New Zealand home ownership so the modest and low incomed no longer need to climb the mountain of home ownership in order to create a stable long-term home for themselves and their families.”

The ability to evict tenants will be greatly reduced and rental properties will need to be sold with existing tenants in residence. While market rents will still apply there will be regulations to prevent existing tenants being priced out of their homes.

The benefits of this policy package do not accrue to tenants alone. Reducing the social disruption of constantly moving home will result in less stress on families, higher educational achievement and reduced spending on social services to address the problems caused by that disruption.

“Solving the housing crisis isn’t just about increased building or decreased prices” says Dr Morgan, “It’s about the way a civilised society should regard residential property as a social asset for an entire nation rather than a financial asset for a select few”.


How to Use Fiscal and Monetary Policy to Make Us Rich Again – Tom Streithorst. 

The easiest way to return to Golden Age tranquility and equality is to empower fiscal policy.

During the post war Golden Age, from 1950 to 1973, US median real wages more than doubled. Today, they are lower than they were when Jimmy Carter was president. If you want an explanation why Americans are pessimistic about their future, that is as good a reason as any. In a recent article, Noah Smith examines the various causes of the slide in labor’s share of national income and finds most explanations wanting. With a blind spot common amongst economists he doesn’t even investigate the most obvious: politics.

Take a look at this chart. From the end of World War II, productivity rose steadily. Until the 1972 recession wages went up alongside it. Both dipped, both recovered and then, right around the time Ronald Reagan became President, productivity continued its upward trajectory but wages stopped following. If wages had continued to track productivity increases, the average American would earn twice as much as he does today and America would undoubtedly be a calmer and happier nation.

Collectively we are richer than we were 40 years ago, as we should be, considering the incredible advances in technology since them, but today the benefits of productivity increases no longer go to workers but rather to owners of stocks, bonds, and real estate. Wages don’t go up, but asset prices do. Rising productivity, that is to say the ability to make more goods and services with fewer inputs of labor and capital should make us all more prosperous. That it hasn’t can only be a distributional issue.

The timing suggests Ronald Reagan had something to do stagnating wages. That makes sense. Reagan cut taxes on the rich, deregulated the economy, eviscerated the labor unions and created the neoliberal order that still rules today. But perhaps an even more significant change is the tiny, technical and tedious shift from fiscal to monetary policy.

Government has two ways of affecting the economy: monetary and fiscal policy. The first involves the setting of interest rates, the other government tax and spending policy. Both fiscal and monetary policy work by putting money in people’s pockets so they will spend and thereby stimulate the economy but fiscal focuses on workers while monetary mostly benefits the already rich. Since Ronald Reagan, even under Democratic presidents, monetary has been the policy of choice. No wonder wages stopped going up but real estate, stock and bond prices have gone through the roof. During the Golden Age we shared the benefits of technological progress through wages gains. Since Reagan, we have allocated them through asset price inflation.

Fiscal policy, by increasing government spending, creates jobs and so raises wages even in the private sector. Monetary policy works mostly through the wealth effect. Lower interest rates almost automatically raise the value of stocks, bonds, and other real assets. Fiscal policy makes workers richer, monetary policy makes rich people richer. This, I suspect, explains better than anything else why monetary policy, even extreme monetary policy remains more respectable than even conventional monetary policy.

During the Golden Age, fiscal was king. Wages rose steadily and everybody was richer than their parents. Recessions were short and shallow. Economic policy makers’ primary task was insuring full unemployment. Anytime unemployment rose over a certain level, a government spending boost or tax cut would get the economy going again. And since firms were confident the government would never allow a steep downturn, they were ready and willing to invest in new technology and increased productive capacity. The economy grew faster (and more equitably) than it ever has before or since.

During the 1960s, Keynesian economists thought they could “fine tune” the economy, using Philips curve trade offs between inflation and unemployment. Stagflation in the 1970s shattered that optimism. Inflation went up but so did unemployment. New Classical economists decided in the long run, Keynesian stimulus couldn’t increase GDP, it could only accelerate inflation. Keynesianism stopped being cool. According to Robert Lucas, graduate students, would “snicker” whenever Keynesian concepts were mentioned.

In policy circles, Keynesians were replaced by monetarists, acolytes of Milton “Inflation is always and everywhere a monetary phenomenon” Friedman. Volcker in America and Thatcher in Britain decided the only way to stomp out inflationary expectations was to cut the money supply. This, despite their best efforts, they were unable to do. Controlling the money supply proved almost impossible but monetarism gave Volcker and Thatcher the cover to manufacture the deepest recession since the Great Depression.

By raising interest rates until the economy screamed Volcker and Thatcher crushed investment and allowed unemployment to rise to levels unthinkable just a few years before. Businessmen, union leaders, and politicians pleaded for a rate cut but the central bankers were implacable. Ending inflationary expectations was worth the cost, they insisted. Volcker and Thatcher succeed in crushing inflation, not by cutting the money supply, but rather with an old fashioned Phillips curve trade off. Workers who fear for their jobs don’t ask for cost of living increases. Inflation was history.

The Federal Funds Rate hit 20% in 1980. Now even after a few hikes, it is barely over 1%. The story of the past 30 years is of the most stimulative monetary policy in history. Anytime the economy stumbled, interest rate cuts were the automatic response. Other than military Keynesianism and tax cuts, fiscal policy was relegated to the ash heap of history. Reagan of course combined tax cuts with increased military spending but traditional peacetime infrastructure stimulus was tainted by the 1970s stagflation and for policymakers remained beyond the pale.

Fiscal stimulus came back, momentarily, at the peak of the financial crisis. China’s investment binge combined with Obama’s stimulus package probably stopped the Great Recession from being as catastrophic as the Great Depression but by 2010, fiscal stimulus was replaced by its opposite, austerity. According to elementary macroeconomics, when the private sector is cutting back its spending, as it was still doing in the wake of the financial crisis, government should increase its spending to take up the slack. But Obama in America, Cameron in Britain and Merkel in the EU insisted that government cut spending, even as the private sector continued to retrench.

It is rather shocking, for anyone who has taken Econ 101 that in 2010, when the global economy had barely recovered from the worst recession since the Great Depression, politicians and pundits were calling for lower deficits, higher taxes and less government spending even as monetary policy was maxed out. Rates were already close to zero so central banks had no more room to cut.

So, instead of going to the tool box and taking out their tried and tested fiscal kit, which would have created jobs and had the added benefit of improving infrastructure, policymakers instead invented Quantitative Easing, which in essence is monetary policy on steroids. Central Banks promised to buy bonds from the private sector, increasing their price, thereby shoveling money towards bond owners. The idea was that by buying safe assets they would push the private sector to buy riskier assets and by increasing bank reserves they would stimulate lending but the consequence of all the Quantitative Easings is that all of the benefits of growth since the financial crisis have gone to the top 5% and most of that to the top 0.1%.

A feature or a bug? The men who rule the planet are happy that most of us think economics is boring, that we would much rather read about R Kelly’s sexual predilections than about the difference between fiscal and monetary policy but were we to remember that spending money on infrastructure or health care or education would create jobs, raise wages, and create demand which the economy craves, we would have a much more equitable world.

One cogent objection to stimulative fiscal policy is that it has the potential to be inflationary. Indeed the fundamental goal of macroeconomic policy is to match the economy’s demand to its ability to supply. If fiscal policy gets out of hand (as arguably it did in the 1960s when Lyndon Johnson tried to fund both his Great Society and the Vietnam war without raising taxes), demand could outstrip supply, creating inflation. But should that happen, we have the monetary tools to cure any inflationary pressure. Rates today are still barely above zero. Should inflation threaten, central banks can raise interest rates and nip it in the bud.

Fiscal and monetary policy both have a place in policymakers’ toolkits. Perhaps the ideal combination would be to use fiscal to stimulate the economy and monetary to cool it down. Both Brexit and Trump should have told elites that unless they share the benefits of growth, a populist onslaught could threaten all our prosperity. The easiest way to return to Golden Age tranquility and equality is to empower fiscal policy to invest in our future and create jobs today.

2017 August 6

Evonomics.com

Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America – Nancy Maclean. 

In 1955 the U.S. Supreme Court issued its second Brown v. Board of Education ruling, calling for the dismantling of segregation in public schools with “all deliberate speed.”

Thirty-seven-year-old James McGill Buchanan liked to call himself a Tennessee country boy. No less a figure than Milton Friedman had extolled Buchanan’s potential. As Colgate Whitehead Darden Jr., the president of the University of Virginia reviewed the document, he might have wondered if the newly hired economist had read his mind. For without mentioning the crisis at hand, Buchanan’s proposal put in writing what Darden was thinking: Virginia needed to find a better way to deal with the incursion on states’ rights represented by Brown.

States’ rights, in effect, were yielding in preeminence to individual rights. It was not difficult for either Darden or Buchanan to imagine how a court might now rule if presented with evidence of the state of Virginia’s archaic labor relations, its measures to suppress voting, or its efforts to buttress the power of reactionary rural whites by underrepresenting the moderate voters of the cities and suburbs of Northern Virginia. Federal meddling could rise to levels once unimaginable.

What the court ruling represented to Buchanan was personal. Northern liberals—the very people who looked down upon southern whites like him, he was sure—were now going to tell his people how to run their society. And to add insult to injury, he and people like him with property were no doubt going to be taxed more to pay for all the improvements that were now deemed necessary and proper for the state to make.

Find the resources, he proposed to Darden, for me to create a new center on the campus of the University of Virginia, and I will use this center to create a new school of political economy and social philosophy. It would be an academic center, rigorously so, but one with a quiet political agenda: to defeat the “perverted form” of liberalism that sought to destroy their way of life, “a social order,” as he described it, “built on individual liberty,” a term with its own coded meaning but one that Darden surely understood. The center, Buchanan promised, would train “a line of new thinkers” in how to argue against those seeking to impose an “increasing role of government in economic and social life.”

Buchanan fully understood the scale of the challenge he was undertaking and promised no immediate results. But he made clear that he would devote himself passionately to this cause.

Buchanan’s team had no discernible success in decreasing the federal government’s pressure on the South all the way through the 1960s and ’70s. But take a longer view—follow the story forward to the second decade of the twenty-first century—and a different picture emerges, one that is both a testament to Buchanan’s intellectual powers and, at the same time, the utterly chilling story of the ideological origins of the single most powerful and least understood threat to democracy today: the attempt by the billionaire-backed radical right to undo democratic governance.

A quest that began as a quiet attempt to prevent the state of Virginia from having to meet national democratic standards of fair treatment and equal protection under the law would, some sixty years later, become the veritable opposite of itself: a stealth bid to reverse-engineer all of America, at both the state and the national levels, back to the political economy and oligarchic governance of midcentury Virginia, minus the segregation.

The goal of all these actions was to destroy our institutions, or at least change them so radically that they became shadows of their former selves?

This, then, is the true origin story of today’s well-heeled radical right, told through the intellectual arguments, goals, and actions of the man without whom this movement would represent yet another dead-end fantasy of the far right, incapable of doing serious damage to American society.

When I entered Buchanan’s personal office, part of a stately second-floor suite, I felt overwhelmed. There were papers stacked everywhere, in no discernible order. Not knowing where to begin, I decided to proceed clockwise, starting with a pile of correspondence that was resting, helter-skelter, on a chair to the left of the door. I picked it up and began to read. It contained confidential letters from 1997 and 1998 concerning Charles Koch’s investment of millions of dollars in Buchanan’s Center for Study of Public Choice and a flare-up that followed.

Catching my breath, I pulled up an empty chair and set to work. It took me time—a great deal of time—to piece together what these documents were telling me. They revealed how the program Buchanan had first established at the University of Virginia in 1956 and later relocated to George Mason University, the one meant to train a new generation of thinkers to push back against Brown and the changes in constitutional thought and federal policy that had enabled it, had become the research-and-design center for a much more audacious project, one that was national in scope. This project was no longer simply about training intellectuals for a battle of ideas; it was training operatives to staff the far-flung and purportedly separate, yet intricately connected, institutions funded by the Koch brothers and their now large network of fellow wealthy donors. These included the Cato Institute, the Heritage Foundation, Citizens for a Sound Economy, Americans for Prosperity, FreedomWorks, the Club for Growth, the State Policy Network, the Competitive Enterprise Institute, the Tax Foundation, the Reason Foundation, the Leadership Institute, and more, to say nothing of the Charles Koch Foundation and Koch Industries itself.

I learned how and why Charles Koch first became interested in Buchanan’s work in the early 1970s, called on his help with what became the Cato Institute, and worked with his team in various organizations. What became clear is that by the late 1990s, Koch had concluded that he’d finally found the set of ideas he had been seeking for at least a quarter century by then—ideas so groundbreaking, so thoroughly thought-out, so rigorously tight, that once put into operation, they could secure the transformation in American governance he wanted. From then on, Koch contributed generously to turning those ideas into his personal operational strategy to, as the team saw it, save capitalism from democracy—permanently.

In his first big gift to Buchanan’s program, Charles Koch signaled his desire for the work he funded to be conducted behind the backs of the majority. “Since we are greatly outnumbered,” Koch conceded to the assembled team, the movement could not win simply by persuasion. Instead, the cause’s insiders had to use their knowledge of “the rules of the game”—that game being how modern democratic governance works—“to create winning strategies.” A brilliant engineer with three degrees from MIT, Koch warned, “The failure to use our superior technology ensures failure.” Translation: the American people would not support their plans, so to win they had to work behind the scenes, using a covert strategy instead of open declaration of what they really wanted.

Future-oriented, Koch’s men (and they are, overwhelmingly, men) gave no thought to the fate of the historical trail they left unguarded. And thus, a movement that prided itself, even congratulated itself, on its ability to carry out a revolution below the radar of prying eyes (especially those of reporters) had failed to lock one crucial door: the front door to a house that let an academic archive rat like me, operating on a vague hunch, into the mind of the man who started it all.

What animated Buchanan, what became the laser focus of his deeply analytic mind, was the seemingly unfettered ability of an increasingly more powerful federal government to force individuals with wealth to pay for an increasing number of public goods and social programs they had had no personal say in approving. Better schools, newer textbooks, and more courses for black students might help the children, for example, but whose responsibility was it to pay for these improvements? The parents of these students? Others who wished voluntarily to help out? Or people like himself, compelled through increasing taxation to contribute to projects they did not wish to support? To Buchanan, what others described as taxation to advance social justice or the common good was nothing more than a modern version of mob attempts to take by force what the takers had no moral right to: the fruits of another person’s efforts. In his mind, to protect wealth was to protect the individual against a form of legally sanctioned gangsterism. Where did this gangsterism begin? Not in the way we might have expected him to explain it to Darden: with do-good politicians, aspiring attorneys seeking to make a name for themselves in constitutional law, or even activist judges. It began before that: with individuals, powerless on their own, who had figured out that if they joined together to form social movements, they could use their strength in numbers to move government officials to hear their concerns and act upon them.

The only fact that registered in his mind was the “collective” source of their power—and that, once formed, such movements tended to stick around, keeping tabs on government officials and sometimes using their numbers to vote out those who stopped responding to their needs. How was this fair to other individuals? How was this American?

Even when conservatives later gained the upper hand in American politics, Buchanan saw his idea of economic liberty pushed aside. Richard Nixon expanded government more than his predecessors had, with costly new agencies and regulations, among them a vast new Environmental Protection Agency. George Wallace, a candidate strongly identified with the South and with the right, nonetheless supported public spending that helped white people. Ronald Reagan talked the talk of small government, but in the end, the deficit ballooned during his eight years in office.

Had there not been someone else as deeply frustrated as Buchanan, as determined to fight the uphill fight, but in his case with much keener organizational acumen, the story this book tells would no doubt have been very different. But there was. His name was Charles Koch. An entrepreneurial genius who had multiplied the earnings of the corporation he inherited by a factor of at least one thousand, he, too, had an unrealized dream of liberty, of a capitalism all but free of governmental interference and, at least in his mind, thus able to achieve the prosperity and peace that only this form of capitalism could produce. The puzzle that preoccupied him was how to achieve this in a democracy where most people did not want what he did.

Ordinary electoral politics would never get Koch what he wanted. Passionate about ideas to the point of obsession, Charles Koch had worked for three decades to identify and groom the most promising libertarian thinkers in hopes of somehow finding a way to break the impasse. He subsidized and at one point even ran an obscure academic outfit called the Institute for Humane Studies in that quest. “I have supported so many hundreds of scholars” over the years, he once explained, “because, to me, this is an experimental process to find the best people and strategies.”

The goal of the cause, Buchanan announced to his associates, should no longer be to influence who makes the rules, to vest hopes in one party or candidate. The focus must shift from who rules to changing the rules. For liberty to thrive, Buchanan now argued, the cause must figure out how to put legal—indeed, constitutional shackles on public officials, shackles so powerful that no matter how sympathetic these officials might be to the will of majorities, no matter how concerned they were with their own reelections, they would no longer have the ability to respond to those who used their numbers to get government to do their bidding. There was a second, more diabolical aspect to the solution Buchanan proposed, one that we can now see influenced Koch’s own thinking. Once these shackles were put in place, they had to be binding and permanent. The only way to ensure that the will of the majority could no longer influence representative government on core matters of political economy was through what he called “constitutional revolution.”

By the late 1990s, Charles Koch realized that the thinker he was looking for, the one who understood how government became so powerful in the first place and how to take it down in order to free up capitalism—the one who grasped the need for stealth because only piecemeal, yet mutually reinforcing, assaults on the system would survive the prying eyes of the media, was James Buchanan.

The Koch team’s most important stealth move, and the one that proved most critical to success, was to wrest control over the machinery of the Republican Party, beginning in the late 1990s and with sharply escalating determination after 2008. From there it was just a short step to lay claim to being the true representatives of the party, declaring all others RINOS—Republicans in name only. But while these radicals of the right operate within the Republican Party and use that party as a delivery vehicle, make no mistake about it: the cadre’s loyalty is not to the Grand Old Party or its traditions or standard-bearers. Their loyalty is to their revolutionary cause.

Our trouble in grasping what has happened comes, in part, from our inherited way of seeing the political divide. Americans have been told for so long, from so many quarters, that political debate can be broken down into conservative versus liberal, pro-market versus pro-government, Republican versus Democrat, that it is hard to recognize that something more confounding is afoot, a shrewd long game blocked from our sight by these stale classifications.

The Republican Party is now in the control of a group of true believers for whom compromise is a dirty word. Their cause, they say, is liberty. But by that they mean the insulation of private property rights from the reach of government, and the takeover of what was long public (schools, prisons, western lands, and much more) by corporations, a system that would radically reduce the freedom of the many. In a nutshell, they aim to hollow out democratic resistance. And by its own lights, the cause is nearing success.

The 2016 election looked likely to bring a big presidential win with across-the-board benefits. The donor network had so much money and power at its disposal as the primary season began that every single Republican presidential front-runner was bowing to its agenda. Not a one would admit that climate change was a real problem or that guns weren’t good, and the more widely distributed, the better. Every one of them attacked public education and teachers’ unions and advocated more charter schools and even tax subsidies for religious schools. All called for radical changes in taxation and government spending. Each one claimed that Social Security and Medicare were in mortal crisis and that individual retirement and health savings accounts, presumably to be invested with Wall Street firms, were the best solution.

Although Trump himself may not fully understand what his victory signaled, it put him between two fundamentally different, and opposed, approaches to political economy, with real-life consequences for us all. One was in its heyday when Buchanan set to work. In economics, its standard-bearer was John Maynard Keynes, who believed that for a modern capitalist democracy to flourish, all must have a share in the economy’s benefits and in its governance. Markets had great virtues, Keynes knew—but also significant built-in flaws that only government had the capacity to correct.

As a historian, I know that his way of thinking, as implemented by elected officials during the Great Depression, saved liberal democracy in the United States from the rival challenges of fascism and Communism in the face of capitalism’s most cataclysmic collapse. And that it went on to shape a postwar order whose operating framework yielded ever more universal hope that, by acting together and levying taxes to support shared goals, life could be made better for all.

The most starkly opposed vision is that of Buchanan’s Virginia school. It teaches that all such talk of the common good has been a smoke screen for “takers” to exploit “makers,” in the language now current, using political coalitions to “vote themselves a living” instead of earning it by the sweat of their brows. Where Milton Friedman and F. A. Hayek allowed that public officials were earnestly trying to do right by the citizenry, even as they disputed the methods, Buchanan believed that government failed because of bad faith: because activists, voters, and officials alike used talk of the public interest to mask the pursuit of their own personal self-interest at others’ expense. His was a cynicism so toxic that, if widely believed, it could eat like acid at the foundations of civic life. And he went further by the 1970s, insisting that the people and their representatives must be permanently prevented from using public power as they had for so long. Manacles, as it were, must be put on their grasping hands.

Is what we are dealing with merely a social movement of the right whose radical ideas must eventually face public scrutiny and rise or fall on their merits? Or is this the story of something quite different, something never before seen in American history? Could it be—and I use these words quite hesitantly and carefully—a fifth-column assault on American democratic governance?

The term “fifth column” has been applied to stealth supporters of an enemy who assist by engaging in propaganda and even sabotage to prepare the way for its conquest.

This cause is different. Pushed by relatively small numbers of radical-right billionaires and millionaires who have become profoundly hostile to America’s modern system of government, an apparatus decades in the making, funded by those same billionaires and millionaires, has been working to undermine the normal governance of our democracy. Indeed, one such manifesto calls for a “hostile takeover” of Washington, D.C. That hostile takeover maneuvers very much like a fifth column, operating in a highly calculated fashion, more akin to an occupying force than to an open group engaged in the usual give-and-take of politics. The size of this force is enormous. The social scientists who have led scholars in researching the Koch network write that it “operates on the scale of a national U.S. political party” and employs more than three times as many people as the Republican committees had on their payrolls in 2015.

For all its fine phrases, what this cause really seeks is a return to oligarchy, to a world in which both economic and effective political power are to be concentrated in the hands of a few. It would like to reinstate the kind of political economy that prevailed in America at the opening of the twentieth century, when the mass disfranchisement of voters and the legal treatment of labor unions as illegitimate enabled large corporations and wealthy individuals to dominate Congress and most state governments alike, and to feel secure that the nation’s courts would not interfere with their reign. The first step toward understanding what this cause actually wants is to identify the deep lineage of its core ideas. And although its spokespersons would like you to believe they are disciples of James Madison, the leading architect of the U.S. Constitution, it is not true.

Their intellectual lodestar is John C. Calhoun. He developed his radical critique of democracy a generation after the nation’s founding, as the brutal economy of chattel slavery became entrenched in the South, and his vision horrified Madison.

***

Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America 

by Nancy Maclean

Nancy K. MacLean is an American historian. She is the William H. Chafe Professor of History and Public Policy at Duke University and the author of numerous books and articles on various aspects of twentieth-century United States history.

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Noticing Neoliberalism’s Nakedness – Chris Trotter. 

If the 2017 general election turns into a messy boil-over, it will be the fault of New Zealand’s most successful people. For the best part of 30 years, the high achievers of New Zealand society have aligned themselves with an ideology that has produced consistently negative outcomes. Not for themselves. In fact, they have done extremely well out of the economic and social changes of the past 30 years. For the majority of their fellow citizens, however, the Neoliberal Revolution has been a disaster.

The real puzzle of the past 30 years is, therefore, why a political system intended to empower the majority has not consigned neoliberalism to the dustbin of history. Why have those on the receiving end of economic and social policies designed to benefit only a minority of the population not simply elected a party, or parties, committed to eliminating them?

A large part of the answer is supplied in Hans Christian Andersen’s famous fable, The Emperor’s New Clothes. Those who know the story will recall that the crucial element of the swindlers’ con was their insistence that the Emperor’s magnificent attire could only be seen by the wise. To “anyone who was unfit for his office, or who was unusually stupid”, the Emperor would appear to be wearing nothing at all.

The interesting thing about Andersen’s fable is that it’s actually supported by a critical element of scientific fact. If people whose judgement we have no reason to doubt inform us that black is white, most of us will, in an astonishingly short period of time, start disregarding the evidence of our own eyes. Even worse, if an authority figure instructs us to administer punishments to people “for their own good” most of us will do so. Even when the punishment appears to be causing the recipients intense, even fatal, pain, we will be continue flicking the switch for as long as the authority figure insists that the pain is necessary and that we have no alternative except to proceed. (If you doubt this, just google “Stanley Milgram”.)

For 30 years, then, New Zealand’s best and brightest business leaders, academics, journalists and politicians have been telling the rest of us that the only reason neoliberalism appears to be promoting a nakedly brutal and inequitable economic and social system is because we are too stupid to perceive the true beneficence of the free market. In language ominously reminiscent of Professor Milgram’s terrible experiment, we have been told by those in authority that there can be “no long-term gain without short-term pain”, and, God forgive us, we have believed them – and continued flicking the switch.

Nowhere has this readiness to discount the evidence before one’s own eyes been more pronounced than in our politicians. How many of them, when confronted with the social and environmental wreckage of neoliberalism, have responded like the “honest old minister” in Andersen’s fable, who, upon being ushered into the swindlers’ workshop, and seeing nothing, thought: “Heaven have mercy! Can it be that I’m a fool? I’d have never guessed it, and not a soul must know. Am I unfit to be the minister? It would never do to let on that I can’t see the cloth.”

How else are we to explain the unwillingness of the Labour Party and the Greens to break decisively with the neoliberal swindle? Or, the repeated declarations from National and Act praising the beauty and enchantment of its effects: “Such a pattern, what colours!”

Even as the evidence of its malignity mounted before them. Even as the numbers harmed by its poisonous remedies increased. The notion that the best and the brightest might perceive them as being unusually stupid and unfit for office led the opposition parties to concentrate all their criticism on the symptoms of neoliberalism. Or, in the spirit of Andersen’s tale, critiquing the cut of the Emperor’s new clothes instead of their non-existence.

Eventually, of course, the consequences of neoliberalism are felt by too many people to be ignored. Children who cannot afford to buy their own home. Grandchildren who cannot access mental health care. The spectacle of people living in their cars. Of homeless men freezing to death in the streets. Eventually someone – a politician unafraid of being thought unusually stupid, or unfit for office – breaks the swindlers’ spell.

“‘But he hasn’t got anything on,’ a little child said.

‘Did you ever hear such innocent prattle?’ said its father. And one person whispered to another what the child had said, ‘He hasn’t anything on. A child says he hasn’t anything on.’

‘But he hasn’t got anything on!’ the whole town cried out at last.”

Now, the whole New Zealand electorate may not be calling “Time!” on neoliberalism – and certainly not its best and its brightest – but Winston Peters is.

And the town is whispering.

Bowalley Road

NZ Labour leaves genuine Social policy to others. The Greens make a moral decision. – Bryan Bruce. 

Good on them. The Green party’s Social Justice proposals released today are moral and just.

Those who are struggling and say they don’t have a choice this election need to think again.

Reducing  the bottom tax rate from 10.5 per cent to 9 per cent for anyone earning less than $14,000, while raising the tax rate to 40% for anyone earning more than $150,000 per year is a well overdue move to close the gap between the haves and have nots.

We have to lift around 179,000 Kiwi kids out of poverty. Their tomorrow, and ours, depends on what we do today

THE PREDICTED OUTCOMES

– A sole parent on a benefit, with two school-aged children and no paid employment: $179.62 better off each week.

– A sole parent receiving the Student Allowance, with two children, and part time work on just above minimum wage: $176.15 more each week.

– A single person on jobseeker support: $42.20 more each week.

– A two-parent family, with one working parent on the median income, with three children: $104.52  more each week.

– Two parents, both on jobseeker support, with three children: $207.46 more per week.

– A two-parent family, both earning the median income of $48,000 with three children: $130.19 more each week.

– Two parents, one in paid work earning $70,000 a year, two children: $87.85 more a week.

‘These problems will not be fixed by the market’ – Bruce Plested. 

Over the years I’ve had a variety of bosses. In seeking to recognise a good boss from one not so good, I asked this question: ‘Would they make a good foreman?

  • Could they ask the workers to do a difficult or unpleasant job and expect them to do it?
  • Could they do the job themselves?
  • Could they take their people with them?
  • Did they get the job done every day, week and year?

With 2017 being an election year in New Zealand it is worth asking these questions of our politicians.  Too many of them fail the test and are lost in platitudes, jokes, jibes, foxy words and sheer procrastination.

Housing

Our houses, through most parts of New Zealand, cost some ten times the net annual income of the family seeking to buy them.

These high prices (three times annual income was normal for many years prior to the early 2000s) have been progressively increasing for the past 15 years, and all governments have been aware of the problem. No government or local government has taken any meaningful action against this rising tide.

As the New Zealand Initiative has stated, “There are not enough homes being built to meet the demand.”

Why?

  • Planning restrictions make it difficult to increase population directly within the city boundaries.
  • Cities are prevented from growing outwards because of rural and urban boundaries.
  • New developments require infrastructure investment from local councils, which can only pay for such investment by rates increases.

Politicians, both local and national, must take action on this very fixable social disgrace. “The market” cannot sort out this problem. Real leadership and intestinal fortitude is needed now.

Education

Measured by some standards, our education is at satisfactory levels on a global average scale. However only 30% of children from lower decile school areas are reaching the New Zealand average for level 3 NCEA.

This low level of success continues the establishment of a permanent socio-economic group of under-achievers in education, and it is our Māori and Pacific Island people who make up most of this group.

This group of under-achievers are more displaced than ever by rising housing and rent prices. Without educational success they will continue to make a lesser contribution to society.

Business can play a bigger role in attempting to sustain and assist educational development. If businesses and schools, particularly in lower decile areas, get together in a meaningful way, benefits will evolve. The more children understand how a business (from a farm, to a fruit shop, to an engineering factory, to a quarry) works and interacts, the more they can understand the possibilities. Business people may be able to inspire children and parents to strive for success, and may be able to contribute to financing school wish lists, from computers to sports equipment, books to bus trips.

Can electorate and local politicians help make this happen?

Environment

Pollution and degradation of our environment is another area requiring strong political will.

Most cities provide bins for rubbish and bins for recycling. There is however no education, or ongoing exhortation, on how to recycle, why to recycle and whether it works. Is an unwashed bottle or can recyclable, or does it go into landfill? Should we recycle bottles with the lid left on? Should wine bottles have the lead seal removed? What happens to polystyrene, what happens to plastic bottles with pumps attached, what about empty aerosol cans? Much of this stuff is going to landfill because our local authorities don’t tell us what is required. If recycling is just a myth, let us know, otherwise teach us to recycle for the benefit of the planet.

Our lack of respect for water and water quality is an indictment of governments going back decades. Various businesses and pressure groups have been allowed to pour chemical waste, animal entrails, milk, and human and animal effluent into our streams, rivers and sea. Freshwater rights for irrigation have been given, to the extent that some rivers run dry most years. And now we are giving water rights to export freshwater in plastic bottles.

Regulators could have stood against many of these past and present excesses, but chose to do nothing and leave the problems to our children and grandchildren.

A couple of years ago I heard a European billionaire being interviewed. When the slightly irritable reporter asked “Well, how much money do you want?” the billionaire answered “Just a wee bit more.”

And it is the “wee bit more” that has done so much to damage our environment – just a few more cows per acre, just a wee bit more water for irrigation, just another water bore in case it doesn’t rain, just a wee bit more sewerage mixed with a wee bit more storm water, just a few more years hitting our already depleted fish stocks.

The problems mentioned here are not fixed by the market. They are like law and order – the local and national politicians should be dealing with them and committing to solutions before the next elections.

***

Bruce Plested, Mainfreight founder. 

The Spinoff