Expedient ‘Government’: Build the Slag Heaps of Tomorrow for New Zealand

Ruins of Lindisfarne_Priory_1797

Lindisfarne Monastery

Is our whole New Zealand economy a bubble built on speculation, the Christchurch rebuild, the Viking-raid exploitation of society and place for short-term gain, financing expenditure out of debt, the promotion of extractive big business over local enterprise, immigration to create demand, and the hope that undifferentiated price-taking commodity prices will rise?  This is an economy living on the short term buzz of crack cocaine.  People eventually sell their furniture, their homes, and their future to fuel the habit.

I want to confront an idea that keeps New Zealanders from seeing where we are going.

That idea – supported by the corporate media – is that this current National government is somehow a good economic manager. The idea is delusional, and it is a collective delusion for many of our people.  What we are creating is the wreck of a ruin.  The hollowing out of a people and a place for the pillage of short-term gain.  A Viking raid on a monastery.

The mythology is made up of these components. Each is a mirror of the opposite reality, and yet it is the delusion that is trumpeted as the ‘truth’.

Myth: ‘John Key knows how to run an economy because he is a financier.’ Truth: Financiers as a set neither understand the functions of what makes an economy tick, nor do they understand society, nor the environment that both underpin our economy.   Nor do they tend to care.  They are on a different planet. They see the world through a spreadsheet and short-term commissions. Transparent accountingJohn Key has no capacity to think strategically (other than how to jolly the public to get himself reelected), only fiddle at the edges of his ideology – an asset sale here, a deregulation to allow more exploitation there, a tax cut over the horizon. We have never – I would argue – had a more disconnected PM with less concern for our nation, our people, or our future..

Myth: ‘The economy is doing well coming out of the Global Financial Crisis and the Christchurch earthquake.’ Truth 1: this government has borrowed
to ‘balance the books’. We had c. $17Billion of public debt in 2008 because Finance Minister Michael Cullen paid down debt over Labour’s previous term in government, and resisted the then National Opposition’s call for tax cuts at the top.  By the last election in 2014, National had increased government debt to over $60B. It has doubled in the two years since. Anyone can borrow to ‘balance’ a cashflow account.

Truth 2: The earthquake was a crisis gift (allowing
the classic Neoliberal ‘Shock Doctrine‘) to argue for more privatisations and centralisations, as well as the rise of the large at the expense of the small.

A comparison with Napier in 1931 would Corporate worldbe a very useful exercise. Large Corporates were given the rebuild of Christchurch, with small firms and public agents marginalised. They even have gagging clauses in their small firm contracts so they cannot speak their grievances about Fletcher Building shenanigans to the media.   One said to me that eventually all the small firms will be little more than contracted labour.  This process of gutting our small & medium enterprises (SMEs) to make a corporate even wealthier is just what happened to Iraq post the last invasion with Dick Cheney’s Halliburton et al. ‘rebuilding’ Iraq and subcontracting all the local – and highly competent (after all, they built the original infrastructure) – Iraqi SMEs.  Christchurch has become an exercise in corporate welfare once again.  The earthquake gave a boost to GDP, because rebuilding destruction does that.  GDP is a measure of money flows that takes no account of the loss of an asset – an environmental asset, social capital, or built infrastructure.  And so it is illusory for the National Party to claim GDP ‘success’ when that was always going to be a consequence of the quake. Half truths galore.

Housing bubble

Is our whole economy a bubble built on speculation, the Christchurch rebuild, the Viking-raid exploitation of society and place for short-term gain, financing expenditure out of debt, and the hope that undifferentiated price-taking commodity prices will rise?

Myth: The government does not print money as they did with quantitative easing in the US & Europe.

Truth: Yes they do – through the growing real estate bubble. As house prices rise, people use the book value equity to spend & consume more, and to invest in housing speculation. A drop in house values would have a negative effect on spending in the economy relative to the degree of the inevitable drop. This government is propping up a Ponzi scheme asset bubble for short-term political and economic ends – whatever the long-run consequences; whatever the effects on removing investment from productive investment to conspicuous consumption and property speculation ….. because the alternative is a horror story waiting to happen. Our crisis in available and affordable housing that affects our least well off is directly related to this economic mismanagement. The longer they delay dealing with the underlying drivers, the bigger the negative consequences and the slag heaps will be in the future.

That speculative bubble is supported by both very high levels of immigration and access by overseas investors in our property market.  Neither of those policies are likely to continue in the long term.  Buyers beware.

Myth: The government keeps taxes where they need to be. Truth: Any mayor can get elected by promising to hold or reduce rates. The easiest way to do that is not to invest in infrastructure maintenance – physical, environmental or social. The problems then come after they have gone. They mine the wider asset base, the slag heaps happen on the next watch, and then they will blame the new government for those slag heaps of their own creation.  This government is doing exactly that. It gave unaffordable tax cuts to the least deserving top, in the next breath scapegoated the poor and now turns a blind eye to mega-corporate rip-offs and domination of our own SMEs whose health is vital to a local economy.  And then in pursuit of ‘balancing the books’ with productive assets sold and taxes cut to the rich, it grinds down the social, environmental and local economies of regions. Yes, you can ‘balance the books’ that way, but you are destroying the bedrock of what makes a country perform in the future.

: This government cares about regional economies. Truth: The provinces have suffered greatly relative to the large cities since the emergence of Neoliberalism in the mid-80s. The provinces were the traditional preserve of the ‘compassionate conservative’ side of the National Party.  The other side of the National Party is now dominant – the big city-slicker wide boys, financiers, greedy commission salesmen, deal makers, nouveau riche wannabes. They do not give a toss for the regions.  They are more interested in concentrating power in the centre and for the 1%, and are motivated by the thrill of dealing with those rich and famous who benefit from the mess.  This is who and where they want to be.  Amongst the entitled.  Many National Party regional electorates are now held by the city-slicker corporate types trying to act like community-minded farmers and small local business owners.  They are not.

Myth: This government is strategic in its thinking. Truth: nothing could be further from the truth. Their economic approach is to sell on price, not on quality, to produce more and to cut costs.  A colonial commodity approach World Ag Commodity graphwith declining real prices.  They do not understand value or market position.  They do not understand resilience or diversity and continuing differentiation.  They do not understand that ‘leaving it to the market’ alone (where power *does* truly exist, though the Neoliberal priests assume otherwise), is tantamount to leaving it all to the powerful.  That does not mean locally owned, batch-processed, long, high value differentiated value chains; it means the opposite.  It does not mean that we create value, multiply value locally, retain value in a place, and then attract value because we build a vibrant cultural life; it means the opposite: a latter-day version of extractive colonisation by corporations.  What culture?

This government support policies that suit the large corporates who deal at the low-cost, large-scale end of the business spectrum.  Their focus is on maintaining short, low-value commodity, increasing outside-ownership with centrally-processed supply chains where less value is created, multiplied and retained locally.  They extract rather than create.  As such, they are the new agents of colonisation where we ‘colonies’ provide the cheap raw material and the cheap labour for their overseas profits.  But deal makers are not history buffs.

Colonisation is a great strategy if you are a mega-corporate, but simply appalling if you care about New Zealand as a nation or your region. And that is why the corporate giants back this government.

This Government’s focus on increasing exports by extracting more, producing more undifferentiated dross (National have resorted to calling it “high value commodities” – an oxymoron), irrigating more, polluting more, degrading both environmental and social standards, concentrating ownership away from local economies, is a Viking raider approach to economic management.

They are riding on the Pure New Zealand market position while seriously and very quickly degrading that essential narrative. That is either economic stupidity or economic sabotage or both, without any concern for long-term consequences.  Strategic?  Or simply expedient?

Once again, you can see the short-term expedience of getting a vote and feeling the glow of a new ‘big irrigation dam’ loaded with promises of “jobs and GDP” for the unthinking and the desperately hopeful.

It’s a deal to make, a corporate whiskey to share, a clap on the back for good old Sir Michael, a message to spin, a perception to manage, a game, a con, next month’s opinion poll.  It certainly isn’t motivated by our future.

And the slag heaps of tomorrow are none of their concern because they live in the now, and won’t be there tomorrow.  They’ll be in a metaphorical and tasteless mansion in Honolulu.Tar sands before & after

My personal belief is that this government is setting us up for failure; an overdose of the drug ‘short-term expedience’ that will occur in the future and that they will attempt to blame on others.  If the corporate media are on their side, they may well get away with it.  The whole Neoliberal Age has eroded the things that both matter and are the essential underpinnings of a decent economy – a functioning environment and a strong adaptive society without autocratic institutions and fear.  A society with an Ethos of Care for others and for our place.

I think we are raiding the cathedrals for the gilt, and building tacky houses on the Honolulu hills with the proceeds, with the slums at the bottom.

All ideas are contestable.  Anyone want to dialogue. Have I got anything wrong?  Have I forgotten anything?

Chris Perley

Chris Perley is an affiliated researcher at Otago University’s Centre for Sustainability with a governance, research, management and policy background in provincial economies, rural sociology and land use strategy. 

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15 Responses to Expedient ‘Government’: Build the Slag Heaps of Tomorrow for New Zealand

  1. Mieke Spiers says:

    Brilliant and so true

  2. Geoff Walker says:

    Sounds about right!!!

  3. SARAH RUSSELL says:

    Thank you for putting this into words and joining it all together. The big picture is beginning to emerge and a lot more NZers are beginning to see. I wonder if any will have the balls to cry out “enough” any day soon.

    • cjkperley says:

      I so hope so Sarah. It comes down to us realising that what is most important is not what politicians say, but whether they care about our future. We’ve let the least caring ‘lead’ us in my view.

  4. Maria says:

    Wow! You’ve done a spectacular job of explaining what is going on in New Zealand. I have been watching and suffering under some of this in Christchurch for years. I’m frustrated that the rest of the country haven’t yet noticed the particular disaster capitalism that is being inflicted on Christchurch by Brownlee and his cronies. All the small tradesmen have been pushed out of the rebuild.
    The trickle down of poverty is spreading and presently Auckland is getting most of the attention, but this is happening all around the country.
    Thank you for this – what you have written needs to be spread far and wide

    • dave says:

      FYI Maria, as an Auckland inhabitant, NOTHING is being built up here. Sure land is bought and divided and retained and road access is put in……then everyone goes home or builds the worlds slowest home in the middle of giant empty acres. Ive watch entire shopping centres be built faster than a single home in Auckland. And god knows we need a giant shopping centre every 50 metres right…..
      NZ developers either dont own the land anymore (large parts of Auckland belong to China)…or they have no will to build on it. I know the media portrays insane building and development but reality is very different. Its blatant landbanking but something else is making the developers walk away. Potential disaster when the bubble bursts very soon? Thats the only real answer now. Theyre running and hoping theyve tidied up enough lose ends to get away with it.

      • Yes, decades ago and until the leaky housing fiasco Auckland was a city of Builders and allied tradies. Last few times I have been there its been a city of road builders and a scattering of renovations. Most of the work force is busy in traffic.

  5. Tom Hunsdale says:

    Excellent summation.

  6. The whole western world (at least) has been working towards this for decades. As with Global Emissions etc I feel that a huge chunk of our population have watched these giant wrecking balls of our own creation coming, swinging madly. And all manners of resistances have been futile. So what the hell, at this point in time what more can we do but stand back and let them hit. The Globalist Free Traders have tied very loose thread they can find, the black whole of economic collapse is on its way with endless debt. Endless Wars Against Everything seems to be the only forces playing and getting in the way. The environment sludge is seeping out of all the cracks. Mankind has long begged for a final fightdown with Nature. Let the games begin. Its only life and death; its not like its the end of the world. Is it?

  7. dave says:

    Outstanding and pretty mush nails it. I’ll be sharing this everywhere.

  8. FHW says:

    To add my name to your small band of followers; YES I am listening, it is the picture, it is true. We live in a national paranoia. Grand delusions in which what IS, is not and what is not, IS. It is all false narratives and veils of pretence.
    It is not a NZ problem but the ideological bankruptcy of Western democracy. In term of visionary alternatives and listening to Julian Assange the other day, he puts it pessimistically as a choice between ISIS and Silicon Valley. Where to next?

    To respond to the Q., have you forgotten anything….I am sure not, but would like to add that the comparison with Lindisfarne is intriguing me. It was the centre of faith and the spiritual heart of the land. Do we have faith? Do we have a spirit? Because if the Vikings were to attack tomorrow, it would have to be at the shopping mall.

    If Governance has slid downwards and backwards to the level of managerial tinkering ….and we would have it climb back out again, towards full bodied wisdom and statesman like leadership, then I feel that faith in some form or other has to be part of the picture.
    It is not likely to be monks on an off shore island, but it does need to be the preserver of beauty and truth and a bench mark for compassion and altruism. Lindisfarne anchored the higher cultural aspirations of the people – and that was the issue. (In this neck of the woods we have car-park-churches which look confusingly identical to corporate headquarters).

    Thank you for writing Chris. Thank you for your articulation of important ideas and the courage to keep shouting them out. If it feels like a void out there on the other side of cyberspace…just a few responses are enough.

  9. cjkperley says:

    Reblogged this on Chris Perley's Blog and commented:

    John Key has resigned. Some of the media is trumpeting the myth that New Zealanders has been well looked after under his term. This rankles. Just because a deal maker and spin doctor in a suit tells us that we are healthy doesn’t make it so. For heaven’s sake look a little deeper than a man who can load more than four clichés in a single sentence …. “At the end of the day, the people know that going forward this is the best thing for New Zealand.” Seriously. Take a look.

  10. Pingback: Neoliberalism Kills Strategic Thought – and that is Killing our Future | Chris Perley's Blog

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